The Rise of Cord Cutters

By: Nick Kelly

In a new ad-free world of Netflix and Amazon Prime, advertisers can reach cord-cutters in a more targeted way. 

For almost 80 years, TV has allowed brands to enter a consumer’s home, engage with them and position their products in the best light. Today, cable television is on the decline, viewers are rapidly adapting ad-avoidant practices and video streaming has officially surpassed cable subscriptions. Over the last five years, pay-TV providers lost more than 7 million subscribers, while online video subscribers have grown by more than 100 million. Perhaps more importantly, consumers are turning to strictly advertising-free providers like Netflix and Amazon Prime. It’s not all bad news, though. With this change and new refined strategies, advertisers can reach consumers in a more targeted way than ever.

Here are a few strategies that advertisers can leverage to reach the cord-cutters, cord-shavers, and cord-nevers of the world:

  • Targeting the cord cutting audience digitally: Data providers and cable providers are able to access cable subscription data to ensure your ads are not seen by consumers still watching on broadcast television. Serving video messaging to audiences built with this mindset is a great way to ensure your ads are seen by tech-savvy consumers or those who are on the cutting edge of technology. This is also a great strategy for advertisers looking to complement a linear TV activation with supplementary reach to non-traditional watchers.
  • Leveraging 3rd party smart TV data providers to serve ads on a second screen: According to Nielsen, 45% of consumers are using a second screen “very often” or “always” while watching TV. Additionally, companies like Samsung and SambaTV possess technology that digests video content on a TV like a unique fingerprint. This offers a unique opportunity for advertisers to reach consumers while they are watching the content that may be too expensive or not available to run messaging in. Whether it is an adult beverage brand looking to align with football watchers during the Super Bowl or a brand whose consumers index highest with Game of Thrones, this tactic can help any advertiser reach their consumers effectively.
  • Move commercial spots to full episode players or on over-the-top (OTT) devices: Consumers are still watching on their flat screens, but with smart devices or OTT players (Roku, Apple TV, PlayStation Vue, etc.). Advertisers need to ditch the demographic buying mindset and leverage programmatic technology to reach their consumers in their living room. By aligning with these channels, either via a PMP deal on a self-served tool like theTradeDesk or a direct buy with a brand like Hulu, advertisers can now tailor who exactly is viewing their ads. Consequently, marketing budgets go much further and more importantly, are getting more efficient.
  • Reach the linear TV audience when they ARE watching: Consumers still are watching linear TV. If an advertiser is looking to build out a strategy involving broadcast advertising, they should focus their budgets on must-watch content such as live reality shows, sporting events, and the news. Even with a traditional TV-buy, they should consider augmenting it with some sort of digital video strategy.

No matter what, there are a few best practices to keep in mind:

  • Viewership is extremely fragmented: With more streaming providers, OTT devices and video services being offered, advertisers should consider diversifying their channel mix to ensure they have a unique reach for each campaign.
  • Measure and Learn: The shift towards digital video means more data and reporting. This can be great – if you use it. Push your media partners to inform you as to who you targeted, when you reached them, what they were consuming and what screen was it on. It’s important to work with an agency or an internal team that can build out intricate attribution models or has some way of reliably measuring the success of the campaign.
  • Content is now digested across multiple devices: Streaming occurs across multiple device types – TVs, phones, tablets, laptops, etc. – and consequently, advertisers need to ensure they have the proper formats and content for each channel. It’s important to ensure your creative strategy is right-sized for the media channel (and your media channel mix is right for the creative that is available).
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