Michelle Abdow is the president and founder of Market Mentors, a full-service marketing and advertising agency.
The year of the pandemic could very well be called the year of media consumption. With more time spent at home, more media was inevitably consumed across linear TV, terrestrial radio and emerging subscription services. OTT (over the top) — that is, streaming media above and beyond an existing internet service — is arguably the up-and-comer in your media mix, if you haven’t already delved in.
Consider that nearly 70 million U.S. households — almost half of all homes in the U.S. — use OTT video, and the figure is growing. Six million homes made the leap to streaming media between 2019 and 2020, and it stands to reason that this upward trajectory will continue. Likewise, the number of streaming services continues to increase — between 2014 and 2019, the number of offerings jumped 140%, and between 2019 and 2020, another 70 options were added, bringing the total above 300.
With figures this substantial, you may incorrectly assume that all these OTT households have cut the cord and stopped linear TV access. Not so. According to Nielsen estimates, there were more than 120 million TV homes in the U.S. last year. And, what’s more, television is still the most-used electronic medium, narrowly beating smartphone daily use, according to Q4 2019 data of U.S. adults.
With so many potential customers consuming media, where is the best medium to place your company’s advertisements?
First Thing’s First: Understanding Targeting
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First, you need to understand the difference between linear TV advertising and OTT. Linear TV follows a “reach and frequency” buying model. This allows advertisers the opportunity to home in on their primary demographic audience and run advertisements on specific stations or programs that will reach them. When making media placements on linear TV, one should consider a combination of quantitative (the ratings) and qualitative (lifestyle) research. If done successfully, a commercial from an advertiser targeting women ages 25–54 is more likely to be run during a program like Ellen or The Bachelor as opposed to during a live sports broadcast. Linear TV can be fantastic in achieving desired reach and frequency.
OTT advertising, on the other hand, is bought programmatically — that is, through an exchange, or more simply put, through software and priced by Cost per Thousand (CPM). Advertisers can target specific audiences, increasing the likelihood that the ads will be relevant to the viewer. In fact, advancements in AI technology can ascertain who is watching. Despite this refined focus of the placements, streaming (OTT) advertising can come at a fraction of the cost per ad than traditional (linear) TV, and the results of the placements can be viewed more readily. That being said, OTT does not have the local reach that advertisers can enjoy with local TV advertising.
Shifting Funds: You Down With OTT?
Before you stop all traditional TV advertising and devote your resources entirely to OTT, review the goals of your messaging and your target consumer. The trend of cord-cutting is more readily embraced by a younger demographic, specifically Gen Y and millennials. In terms of TV consumption, individuals in these groups watch just over 1.5 hours of television programming a day, while those 65+ watch seven times that amount. Suffice it to say there is a generational gap.
Other Channels Available
Let’s not lose sight of other mediums available. Terrestrial and streaming radio are very viable options, as are digital display ads, paid search, paid social and outdoor advertisements. All can be mediums to complement your other efforts, depending on your overall goals. Some things to consider:
Radio, both terrestrial and streaming, continues to be a powerful media, reaching more than 90% of members of each age demographic each day. The reason for this is three-fold: radio is portable, free and adaptable; accessible in cars; and available through computers, phones and smart speakers. Because radio is a genre-specific medium, advertisements aired on radio may reach a more focused audience. People tend to listen to channels that play their favorite genre, such as pop, classic rock or country music; news/talk; sports; or even podcasts.
Digital advertisements can be drilled down very granularly to reach the screen of someone looking for something similar to what you are offering. With thoughtful keyword research, compelling copy and impactful imagery, engagements can be achieved with instantaneous updates allowed if the results aren’t being reaped as readily as you had hoped. And, with improvements to digital contextual targeting, your ad can appear before a prospect at a time when they are seeking precisely what you are able to offer them. Moreover, with over 2.14 billion digital buyers in the world, digital advertising should not be discredited. Another benefit of this type of placement is the reporting and ability to buy on a cost per thousand (CPM) or a cost per click (CPC) basis.
Your Media Mix: Properly Slicing Your Pie
So how do you divide your advertising budget?
• Determine who your target audience is and define their demographics — age, income, location.
• Then research where they are, what they are watching and what they are listening to.
• Decide if your end goal is brand recognition or increased sales. If the former, a targeted and longer, consistent approach is recommended. For the latter, consider targeted ads served frequently.
• Determine when you want to go to market. And time your messaging with viewership, market or media trend data and placement availability to make strategic buys.
• Set your budget and success metrics, and adjust your mix, as necessary, to achieve them.
With all this said, the case for a healthy media mix is stronger now perhaps more than ever. While your pie may have more slices than in the past, given the growing number of advertising options available to you, the premise is the same. For the greatest ROI, you need to find the right media mix. And while it may seem easy to do, media buying is a science. If you aren’t sure how to formulate the right mixture, seek a media buying agency that knows how to buy both traditional and digital media.
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Author: Michelle Abdow, Forbes Councils Member