Connecting with the cordless

Editor's note: Jason Wiese is senior vice president, director of strategic insights, Video Advertising Bureau.

According to findings from a recent Video Advertising Bureau (VAB) report, Reaching “Corded” and “Cordless” Audiences Through Video Streaming, the collective number of cord-cutters and cord-nevers has nearly doubled over the last three years – with cordless audiences now accounting for 44% of adults vs. 23% in 2018. 

While this shift began pre-pandemic, COVID-19 served as an accelerator, with 92% of cord-cutters and 86% of cord-nevers now actively streaming. In addition, 60% of cordless audiences have added a new streaming service over the last year.

Within this landscape, there is a growing incremental reach opportunity for marketers, particularly in their efforts to engage those consumers previously deemed hard-to-reach.

Watch what they want 

Cord-cutters and cord-nevers do not distinguish between linear or streaming. To them, all TV is TV, since viewers now habitually watch high-quality, TV-like programming across a variety of platforms and devices via different connections. People watch what they want, whenever they want.

Therefore, it’s no surprise that cordless audiences are attracted to streaming services that offer professionally produced programming featuring enriched storytelling and character development. People are gravitating towards platforms that provide a diverse, high-quality library of content of TV shows and movies, representing the classics and the new as well as exclusive originals. 

As connected-TV household penetration grows while services continue to proliferate, viewers are increasing their use of ad-supported streaming platforms – whether through TV network apps, Hulu or YouTube TV, or through a free ad-supported streaming (FAST) TV like Pluto or Tubi.

In fact, over one-third of cord-cutters and cord-nevers use a FAST service, reflecting increases of 38% and 48% over the last three years, respectively.

Willing to accept advertising 

Viewers understand that it costs money for content producers and distributors to develop a consistent pipeline of premium programming so they are willing to accept advertising as part of their viewing experience. Further, data shows that 62% of adult video streamers prefer watching free content with ads rather than paying for a commercial-free subscription service.

In addition, viewers appreciate the ability of these digital-native platforms to specifically target them with ads based on their behaviors, buying habits and viewing history. These advanced targeting methods deliver more relevant and memorable ads, resulting in a greater likelihood of sparking consumer action.

In recent years, those previously hard-to-reach cord-nevers – who are now prevalent across ad-based services – have shown to be an especially engaged audience for advertisers to reach through streaming, as they are more likely than traditional corded audiences to believe that the ads they see are relevant and memorable.

Eight best practices for marketers

The growth of streaming is driving business results through expanded incremental reach opportunities in ad-supported services, greater engagement fostered through premium programming in brand-safe environments and more precise, data-driven targeting that delivers relevant creative with the right message at the right time to the right person.

At the VAB, we have assessed in-depth how today’s most innovative brands are using streaming to drive results within their multiscreen video campaigns. From this assessment, we have found that there are eight best practices that marketers are implementing in their streaming campaigns to drive KPIs. These strategies are:

• Leverage first- and third-party data and viewership behaviors to create custom target(s) and discover new audiences.
• Execute an audience-based buying approach that segments viewers beyond traditional demographics like age and gender by targeting consumers based on behavioral, attitudinal, lifestyle or purchasing data.
• Embrace over-the-top (OTT) across platforms and devices – connected TV (CTV), desktop, mobile – to maximize reach.
• Tailor creative to deliver the right message to the right audiences and consider tactics such as frequency-capping and sequencing multiple messages to further increase engagement.
• Utilize geotargeting to reach best prospects whether you’re a local, regional or national advertiser with priority-focused markets.
• Partner with trusted measurement companies to evaluate campaign performance across your desired metrics.
• Understand which outcomes are most important to your objectives; if you’re a first-time streaming advertiser, consider running a test-and-learn campaign to gauge which metrics and platforms are performing best.
• Analyze results and optimize to your desired outcomes for both current and future campaigns.

Ask themselves important questions

Further, in the implementation of those strategies and depending on their brand objectives, successful marketers will ask themselves important questions that help inform and guide their campaigns. Those questions include: 

• How do we use streaming to extend the reach of our video campaign beyond linear TV? 
• How do we use video streaming to boost sales?
• How do we use streaming to increase our share of voice?
• How do we use streaming to reach new audiences?
• How can we make an impact at a local level with streaming?
• How can we use streaming to build brand love? 
• How can we drive in-store traffic with streaming?
• How can we use interactive ad units to motivate consumer action? 

Below are case studies, which are among the examples highlighted in our report, Stream On, which explores how video streaming drives brand success. 

Automotive case study (platform: Tubi)

A luxury automotive advertiser wanted to extend the reach of its video campaign beyond linear TV. Tubi partnered with measurement and attribution platform TVSquared, which combined automatic content recognition and digital measurement to understand the incremental reach that Tubi offered. The brand began embracing OTT to maximize reach while also partnering with trusted measurement companies to evaluate campaign performance. The advertiser also made sure to have a comprehensive understanding of what outcomes were most important to its overall objectives. All of this resulted in Tubi and TVSquared identifying that 89% of the auto advertiser’s audience was incremental to linear investments, while only 3% of media volume overlapped between Tubi and linear campaigns. 

Tax services case study (platform: NBCUniversal)

A leading tax services provider wanted to improve its conversion for its services online and in retail locations. Using addressable advertising, an audience-targeted campaign launched aiming to reach a custom competitor target modeled from the client’s first-party data across NBCU. Targeted impressions were delivered dynamically as viewers watched NBCU’s full-episode player content across their owned-and-operated CTV apps, set-top box video on demand and Hulu. The tax services provider found a drastic lift for tax filings. Comparing numbers from 2019 to 2020, this campaign was +66% more efficient in cost per conversion and had a +2.5% higher tax filing conversion rate. The brand achieved success by implementing audience-based buying, embracing OTT and utilizing geotargeting.  

Quick-service restaurant case study (platform: Hulu)

A quick-service restaurant brand aimed to drive sales through personalized messages prompting user engagement. Hulu delivered selected audiences GatewayGo ads that allowed this goal to be accomplished by prompting users to open a push notification, open an e-mail or scan a QR code. The brand found that audiences exposed to the interactive ad units saw a 3x lift in purchase rate. The best practices implemented in this cross-screen campaign were: creativity in messaging to the right audiences; partnering with trusted measurement companies; and optimizing the outcomes for current and future TV buys. 

Expansive opportunities 

Throughout today’s video ecosystem – which consists of companies including Hulu, Tubi, Effectv, Ampersand, NBCUniversal, ViacomCBS, Spectrum Reach, Xperi and TiVo – there are expansive opportunities for marketers to work with these programmers and distributors, alongside data, analytics and measurement companies, to assess challenges, identify solutions and ultimately achieve results. 

The year ahead presents a number of exciting and significant trends making an impact on marketers, including: a greater emphasis on modern media measurement; continued growth of converged TV and video streaming; and multiscreen TV driving business results. These trends are setting the stage for a 2022 (and beyond) that marketers can take advantage of.

In our analysis, the VAB has found that brands will be better equipped for success in their marketing plans by understanding these key points: 

• Video streaming is universal among all “cord” groups. The shift in viewer behavior to streaming means that marketers can engage with passionate and attentive audiences within premium OTT environments to inspire consumer action. 
• Leverage the popularity of advertising-based video on demand (AVOD) to resonate with all audiences. With a consumer preference towards free, ad-supported streaming, marketers can leverage the rising popularity of premium AVOD to ensure their multiscreen video campaigns resonate across all audiences.
• Streaming campaigns drive business success. Marketers are achieving greater results across KPIs due to the increasing scale and engagement of video streaming as the incremental reach opportunity grows across all groups, especially non-corded people.

Connect with the cordless

As the streaming landscape advances, brands that follow these practices will increase their ability to drive KPIs including incremental campaign reach and increased ad recall, brand favorability, consideration, website visits, in-store traffic and sales. By making smart investments and strategic decisions, today’s marketers are well-positioned to successfully connect with the cordless and drive business success in both the short term and long term as streaming continues evolving.