James Arnold, Chief Digital Officer, Rooster Strategic Solutions
Connected TV (CTV) is on the rise. According to the Interactive Advertising Bureau (IAB), 60 percent of U.S. advertisers will shift dollars from linear TV to CTV in 2021, hoping to take advantage of better targeting and reach. But is CTV a viable tactic for ag companies? In my opinion, not yet – but it’s probably worth dipping your toe in the water to get some experience.
What’s the difference between CTV, ITV, and OTT? First, some definitions: Over the Top (OTT) is an umbrella term for any content that is published via the internet, whether it’s viewed on a smart TV, desktop computer, tablet, or a mobile phone. CTV and Interactive TV (ITV) are often used interchangeably to describe the tools and devices that allow you to view OTT content on your different screens. This includes streaming services, such as Netflix, Hulu, Amazon Prime, or Tubi, as well as multichannel distributors, such as Sling, YouTube TV, or AT&T Now.
There are four main types of OTT content that consumers can view today: Live-stream content, such as sporting events viewed through ESPN+; full-episode players, which are the commercials embedded into a program on an app like Peacock, the NBC digital service; video on demand, such as Netflix or Amazon Prime; and generic on-demand video, which is a catch-all term referring to video entertainment that targets a specific audience but doesn’t fit into the first three categories, such as YouTube videos. The most common way for advertisers to use OTT content to promote their messages is the in-stream video ad, typically a 15- to 30-second spot that runs before or during a program. Interactive pre-roll ads are less common. They’re similar to in-stream video ads but allow viewers to click through to a landing page.
As television viewing moves rapidly toward digital platforms, knowing these definitions and the available advertising options is increasingly important. According to the Leichtman Research Group, 80 percent of U.S. households have at least one internet-connected TV device, and 40 percent of adults watch video through a connected device daily. And these numbers are growing as more and more consumers “cut the cord.”
CTV offers advertisers a number of advantages compared to traditional linear TV advertising. First and foremost is cost-effective targeting. For example, truck manufacturers and beer companies are mainstays of the sports programming world, lured by the prospect of reaching the coveted 25- to 40-year-old male demographic. Rather than running a traditional spot on a network, CTV allows advertisers to specifically target this demographic, using programmatic buys to ensure that every advertising dollar is spent against the chosen audience.
Real-time metrics are another plus. CTV ads generate a wealth of usable information that advertisers can measure and optimize in real-time. Common metrics include: impressions, which are the total number of views, your ad receives; reach, the number of individual viewers who see your ad; and frequency, the average number of times a specific individual will view your ad. Moreover, using interactive ads allows you to identify valuable insights on conversion, such as whether a specific demographic or geography is more likely to click on your ad or visit a webpage to get more information.
The challenges for ag companies: Bandwidth and vendor choices. The main challenge for ag has always been reach. While it may be true that 80 percent of Americans have a connected device, the farm audience has traditionally been 10 to 20 points lower because of bandwidth issues. And even if they have Smart TVs, are they using the apps in these TVs? A lot of farmers are still using cable. So, they may have access, but not the bandwidth to fully utilize this access. And the more detailed you get with your targeting, the more you limit the number of impressions. For instance, if you want to use a full-episode spot to reach 500-plus-acre corn growers on Hulu, you can; but at best you’re only going to reach 60 percent of the intended audience, and only those who have Hulu. It might be easier to call them on the phone.
The other limiting factor for ag companies is that the vendors who are able to target farmers have traditionally packaged and sold their services differently, making it difficult – if not impossible – to measure effectiveness. Not too long ago I asked four different CTV vendors to give me 100,000 impressions against farmers. They all said they could, and they all came back with radically different proposals, because they have different preferred partners and differing ways of measuring the audience.
Based on this experience, I recommend that companies ask the following questions when comparing CTV vendors:
- Do you have that audience?
- What is the reach into that audience?
- Do you have inventory across all of the CTV types?
- Can you single out Smart TVs vs streaming, etc.?
- Do you sell inventory across all the content types?
- Can you single out certain inventory, such as FEP ads?
- What are the tradeoffs for customizing against an already finite audience?
- What kind of measurement is available up front and on the back end?
Asking these questions won’t necessarily even out the playing field, because each vendor will still try to convince you that their approach is best. But it will give you some insight as to how each vendor approaches your audience, and help you determine which of the vendors has the highest chance for success.
The bottom line: As I reported in a recent Rooster Cast, CTV is just as revolutionary to broadcast as programmatic was to digital 10 years ago. So, dipping your toe in the water is a good idea; jumping overboard, not so much. We’re advising our clients who have broadcast elements to test the CTV waters. While it’s true that until the bandwidth issues are solved, CTV is operating at a disadvantage, it’s not as much of a risk as it was a few years ago when only 30 percent of farmers had access. And this discrepancy is narrowing. And while it’s also true that vendors package and sell very different offerings, with a little due diligence you can find a partner who can help you achieve your goals.
In short, it pays to look at CTV in the same way you might have looked at the worldwide web in 1993 or social media in 2008 – it’s going to be a big deal someday. You might as well start learning how to use it effectively, but don’t sink a bunch of your marketing dollars into it just yet.
If you have any questions about CTV or want to talk through some strategies to see if it’s a good fit for your company, I’d love to have a conversation.