Marketing

What are the Advantages of Shifting from TV to Online Ads?

June 24, 2024
CTV
Nandini Agarwal
Written by

Nandini Agarwal

Content Marketer

Table of Contents

The Golden Age of the Living Room Pitch

How often do you watch cable TV nowadays? I haven't watched it for years, but my parents occasionally do. Some of you might have similar answers, while others might still be hooked to the TV. But what does the majority say?

According to Statista, U.S. households subscribing to cable TV have been declining over the past decade. Despite this trend, cable TV persists. Older individuals, especially those 65 and older, are most likely to subscribe, with half currently subscribed. Conversely, those aged 35 to 44 are the most likely to have canceled their subscriptions.

These statistics show TV is becoming a relic. As viewers move to online platforms like Netflix, Prime Video, and YouTube, advertisers follow suit.

Imagine a time before social media. Families gathered around the TV not just for entertainment but for commercials. This was the era of traditional TV advertising, shaping brands' roles in popular culture.

Commercials were events, not just interruptions. The Super Bowl was famous for its ad campaigns, creating memorable moments. Jingles stuck in our heads. Do you remember any famous ad jingles?

TV offered a captive audience, a guaranteed way to broadcast your message to millions. Ads reached everyone within the signal's range, relying on broad appeal. It was a reliable formula for brand awareness. But the landscape is shifting. Online advertising is challenging TV's dominance. With internet usage rising, consumers spend more time on smartphones and laptops, and advertisers are adapting.

The Call to Adventure: A New Frontier Emerges

Just as humans evolve, so does advertising. Today, several online platforms offer a golden route for advertisers.

Let’s discuss YouTube, LinkedIn, and Instagram. These platforms offer targeted advertising unimaginable in the TV era. Brands can now tailor their messages to specific demographics and interests, creating personalized experiences. Interactive features and trackable metrics provide valuable data for constant refinement. This digital frontier is a call to adventure, challenging the norm and pushing the advertising industry forward.

The Refusal of the Call: Not So Fast...

Change is hard. The allure of a massive TV audience still holds weight. TV advertising has been effective for businesses to stand out, connect locally, establish credibility, and increase brand awareness. TV isn't dead yet, particularly for the older generation.

This hesitation is valid. TV has been the hero of brand storytelling. But TV is evolving too. Enter Connected TV (CTV).

Enter Your Guide: Connected TV Bridges the Gap

Think of CTV as a mentor. It bridges traditional and digital advertising. CTV allows access to live TV and streaming services on smart TVs and gaming consoles. Services like Netflix, Hulu, Apple TV+, and Disney+ offer affordable, flexible content viewing.

The rise of CTV has led to "cord-cutting," where viewers cancel cable or satellite subscriptions in favor of internet-delivered TV. Research shows CTV is on the rise, offering the targeting benefits of online ads with the reach of traditional TV. In 2023, households cutting the cord (68.7 million) surpassed those with pay TV subscriptions (62.8 million).

CTV solves the problem of wasted impressions and poor performance measurement in traditional TV. Advertisers now focus on CTV, reallocating budgets from linear channels. CTV uses automated systems for optimal ad placement, ensuring high view completion rates and effective cost-per-completed-view metrics.

Crossing the Threshold: YouTube Takes Center Stage

With streaming services capturing viewers' attention, which one is the most viewed? The answer is YouTube, the second most visited website globally, with over 122 million daily active users and more than 2.5 billion total users.

Brands can create engaging, long-form content on YouTube, resonating with specific audiences. In 2022, 60% of advertisers used YouTube exclusively, up from 44% in 2021. This growth offers new advertising opportunities.

WBR Insights found that 48% of respondents receive the best ROAS from YouTube, while 35% prefer Instagram. In 2023, 79% planned to increase YouTube ad spending. YouTube emerged as the top digital advertising channel for B2C companies.

Why YouTube? It’s all about engagement. People actively seek content, making them more receptive to ads. This is the transformation where brands shift from interrupting viewers to creating content they want to watch. YouTube’s various ad formats and wide reach make it ideal for advertisers.

Trials and Allies: Navigating the New Landscape

TV and online ads each have strengths and weaknesses. Here's a breakdown:

  1. Targeting Capabilities:some text
    • TV: Traditional TV advertising reaches a broad audience with limited targeting. Ads are shown to everyone watching a particular program, regardless of their demographics or interests.
    • CTV: CTV advertising offers precise targeting based on viewer data, such as interests, location, and viewing habits. Advertisers can tailor ads to specific audiences, enhancing relevance and effectiveness.
  2. Ad Skipping:some text
    • TV: Viewers cannot skip ads on traditional TV. They are compelled to watch the commercials as part of the broadcast.
    • CTV: Many CTV platforms allow viewers to skip ads after a few seconds, although some platforms or premium accounts may limit this feature to ensure ads are watched in full.
  3. Measurement and Analytics:some text
    • TV: Measuring the impact of TV ads is challenging and often relies on indirect methods, such as surveys or sales data, to gauge effectiveness.
    • CTV: CTV provides detailed analytics and real-time data, enabling advertisers to track metrics like view completion rates, engagement, and conversion rates. This data allows for more precise measurement of ad performance.
  4. Interactivity:some text
    • TV: Traditional TV ads are passive and do not offer interactive features.
    • CTV: CTV ads can be interactive, allowing viewers to engage with the ad, such as clicking for more information or making a purchase directly through the ad interface.
  5. Cost Structure:some text
    • TV: TV advertising typically involves higher costs due to the broad reach and production expenses. Advertisers pay for airtime based on the expected viewership of a program.
    • CTV: CTV advertising can be more cost-effective, especially for targeted campaigns. Advertisers often pay based on specific metrics, such as cost per completed view (CPCV) or cost per impression (CPM).
  6. Flexibility and Ad Formats:some text
    • TV: Ad formats on traditional TV are generally standardized, with typical durations being 15, 30, or 60 seconds.
    • CTV: CTV offers a variety of ad formats, including shorter and longer videos, interactive ads, and dynamic ad insertion, providing greater flexibility for creative approaches.
  7. Viewer Behavior and Preferences:some text
    • TV: TV viewers are often passive, consuming content as it is broadcast without much control over what and when they watch.
    • CTV: CTV viewers have more control over their viewing experience, often choosing what to watch and when. This on-demand nature can influence how receptive they are to ads, potentially increasing engagement.

What's Next?

Evolution means gradual development. As we evolve, so do our communication methods. Today’s digital world makes understanding consumer behavior easier, setting the stage for advertisers to adapt.

The lessons from this digital adventure are invaluable. Advertising will keep changing, and we must adapt to reap rewards in this evolving media landscape.

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