Business, Marketing, News, Sales, TV

How Ditching Cable TV Advertising for CTV Can Improve ROI

Kids sitting between various screens displaying content

When it comes to advertising, the return on investment, or ROI for short, matters most. Choose your advertising medium wisely, artfully craft a convincing message and you will maximize the ROI of your ads. 

Let’s shift our attention to the platform and context for advertising. Conventional wisdom states that tried and true cable TV advertising is highly effective simply because cable reaches the masses. However, there is also a good case to be made for advertising on connected TV, or CTV for short.

Recognize the Ongoing Shift Toward CTV

Though there are certainly merits to advertising on cable TV, savvy business owners and managers will also advertise on other platforms including online streaming video services. As time progresses, more people are shifting away from traditional cable TV to streaming services. Such “cord-cutting” provides businesses with a golden opportunity to connect with new customers through CTV ads.

eMarketer reports that the cord-cutting crowd referenced above will continue to expand beyond the 40 million mark. It is interesting to note all age demographics watching cable TV will decline except for those aged 55 and up. Continue crunching the numbers and you’ll find that about half of all adults between the ages of 22 and 45 no longer watch conventional TV content at all. 

Those who use connected TV typically invest about six hours more watching their selected content than those who do not watch connected content. In other words, CTV viewership is increasing and the engagement rate is also spiking at the same time. These trends are music to the ears of business owners, business managers and those in charge of advertising on behalf of businesses as CTV facilitates connections with new customers.  

Tailored CTV Ads Produce a Better ROI

In the end, the only thing that matters in the context of advertising is ROI. Choose the right medium, deliver the right message and your ROI will be significantly higher than it would have been had you taken a wrong turn in the context of advertising or simply not advertised at all. The beauty of CTV is that it zooms in on the target audience through tailored digital ads. 

The personalization of ads through CTV makes the message that much more meaningful to the viewing audience. This tailoring of the marketing message is quite nuanced especially when juxtaposed with the broad strokes painted with conventional commercials on cable TV. The customization of marketing messages presented in CTV ads that suit specific customer personas most likely to be viewing the content ultimately hikes engagement. The heightened engagement boosts sales all the more, ultimately bolstering ROI.

Ads placed on CTV have become complex and nuanced to the point that they can be personalized according to the viewing audience. Spend some time defining your target viewer personas, identifying the CTV content they are most likely to engage with, determining the specific CTV services they are most likely to use, then personalize the ads with that information to make a meaningful impact on your bottom line. CTV presents a golden opportunity to target specific customer personas based on a litany of factors ranging from lifestyle to behavioral specifications, device type, DMA, IP address for geographic purposes and plenty more.

CTV Consumer Behavior is Dynamic

Though CTV is still in its relative infancy, the industry as a whole is quite dynamic. In other words, CTV will continue to change rather than stagnate as time progresses. The same holds true for CTV customers in terms of their tastes, options and willingness to pay for streaming services. The cost of streaming services has crept higher in recent years, partially due to inflation yet also as a result of expanded service options. 

The industry’s economics have reached the point where the cost of piping several CTV streaming subscriptions into a house can add up quickly, potentially rivaling the monthly price of cable TV in some instances. As a result, many more CTV viewers will be open to the idea of viewing commercials and other advertisements within content in exchange for a lower monthly cost and possibly even fewer interruptions during the streaming experience. 

Add in the fact that a growing number of viewers looking to keep streaming costs low are willing to view ads tailored to their idiosyncratic preferences and there is even more potential for personalized ads on CTV to catalyze revenue well above and beyond the growth rate of traditional ads on cable TV.


More on this topic:

How the Evolving Internet Is Beating Monopolistic Giants of TV Advertising Industry

How the Evolving Internet Is Beating Monopolistic Giants of TV Advertising Industry

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