Research shows why media advertisers need to invest in video
Advertising Initiative Blog | 20 April 2022
While it’s not a revelation to say that video is increasingly important in news media, two representatives of Adtaxi dug into some statistics to explain why that is during Wednesday’s INMA members-only Webinar.
Murry Woronoff, Adtaxi’s director of marketing research, shared survey results that paint a clear picture of today’s digital environment:
- Today, there are an average of 25 connected devices in the home.
- Roughly 96% of households have a television and are connected to the Internet.
- The amount of time people spend daily consuming the news via digital instead of traditional platforms has been growing steadily, with digital platforms outpacing traditional platforms since about 2018.
- And if you look at time spent consuming TV compared to digital video, although TV had a two-to-one advantage in 2019, digital video is poised to overtake it in the next year or two.
Adoption of things like connected TV (CTV) and consuming digital video on other devices is higher among the younger generations (97% of 18-to 24-year-olds). But even 50% of those 65 and older use digital video, and those numbers will just continue to rise. In 2021, roughly 106 million homes had CTV, and by 2023 it’s projected to be 110 million.
“The reliance on all things digital today just smacks you in the face” when you see these numbers, Woronoff said.
Unfortunately, TV ads don’t have very favourable ratings among viewers. Woronoff shared the results of a U.S. survey done about eight years ago that asked people what media had the most annoying ads. “TV always ranks No. 1,” he said, outranking everything else by a landslide. At the time the survey was done, there were about 10 minutes of commercials per hour on TV. Today, there are about 18 minutes per hour.
“It’s almost double what it was, even though surveys consistently tell us that people try to purposely avoid TV ads,” Woronoff said. “This is a problem.”
This issue is made even worse when you look at the ad response rates for streaming as compared to TV, cable, and satellite ad response rates combined. When asked what type of ads they responded to in the past 30 days, both Gen Z and Millennial respondents responded more to streaming (it was almost even with Gen X respondents).
Woronoff then broke down numbers for the news publishing industry specifically, identifying how readers access the news:
- For digital platforms like a newspaper’s Web site or their digital newspaper, the reach was 98%-99%.
- Among households who have CTV, 90%-91% of those people access the newspaper’s digital platforms “frequently.”
- When asked whether they stream anything on any device, 91% of digital news consumers said yes as compared to 75% of the print consumers.
He emphasised that digital video allows advertisers to extend their reach into all types of readers more affordably than TV does. While TV charges, on average, US$7 on a CPM basis, that number immediately jumps when really trying to reach a specific demographic. “If you want to reach only men in the 18-49 age group, who are only 16% of the viewing audience, now you’re not paying US$7 — you’re paying US$44.”
Video on the Internet “eliminates waste,” Woronoff said. “It rakes together all your dollars and puts them on top of the people you really want to reach.”
With all of this information in mind, Lindsy O’Connor, Adtaxi’s senior digital sales director, talked about the tactics of today’s marketplace and strategies for maximising ROI.
“Digital video is unique in its ability to tell a complete story by combining the three key components of sight, sound, and motion to convey an emotional and lasting message,” O’Connor said.
Video is where media’s audience already is, she said, with 79% of people reporting they watch video online every week and nearly half watching every day. It also allows you to appear on the largest screen in the house (the TV) as well as across all other connected devices.
O’Connor advised thinking about digital marketing from a “video everywhere” approach, making sure customised and consistent video messaging appears on all connected devices. This doesn’t have to be an expensive proposition, either, as “only 15% of people say a video must be professionally produced” today. “People are looking for more authenticity now.”
There are two platforms to consider, but O’Connor said it’s not an either/or question:
- There are “walled gardens” like YouTube and social media, which can only be accessed through their platforms.
- On the other hand, there’s the “open Internet,” including all CTV streaming and all Web sites.
The latter lets you “reach people wherever they are.” A combined approach that reaches across both of these is the best way, she said, the find out what performs best. This increases your reach, CPMs, cost-per-view, and activity on your site.
The objective is to increase ROI for both media and their advertisers, O’Connor said, and to do this, it’s incredibly important to help advertisers define their goals: “We ask every single client, big or small, three questions: Who do you want to reach? What do you want to tell them? What would you like them to do?”
O’Connor outlined the different methods for identifying your audience, from using first-party data to creating lookalike modeling to third-party targeting services. She talked about the importance of making sure the message aligns with what the advertiser wants to tell that audience. If they want to raise brand awareness, for instance, educational videos about the brand will be more effective than an upsell or cross-sell video. Those are better suited to people who have already made a purchase decision.
There’s a similar need to “make sure the right message is going on the right platform.” To raise brand awareness, CTV can be effective, whereas social platforms are great for driving engagement such as likes or product views. It’s key to manage ad frequency, as well. Studies show “you want to make sure you’re only serving an ad to a person of interest two to five times,” O’Connor said, as more frequency actually results in consumers being less likely to respond.
For advertisers to grow their business and continue advertising, she emphasised, you need to be able to measure and analyse the right data. Metrics like impressions might be useful to measure an ad’s effectiveness at increasing brand awareness, but it won’t give you accurate information about how many people actually made a purchase decision. For that, you’ll need more advanced conversion reporting.
While video is everywhere consumers are and where advertisers should be, it’s important to manage the frequency with which they see your ads O’Connor said. “Advertisers don’t have unlimited budgets, so we need to manage that effectively.”
INMA members can view the entire Webinar here.