Last year was historic for the television industry. Why, you ask? In 2022, every streaming service backed by a major U.S. network embraced an ad-supported subscription option. While this feels just as momentous as the first TV ad’s debut in 1941, it shouldn’t be surprising. According to Samba TV, ad-supported subscriptions (AVOD) are the fastest growing category in Connected Television (CTV), and they’re closely followed by free ad-supported television (FAST), which one in three U.S. consumers subscribe to.1 Despite this explosion in ad-supported streaming, the advertising dollars still haven’t caught up.
Although recalibrating a media strategy can appear daunting, it represents a massive opportunity for pharmaceutical advertisers. In a field driven by data and transparency, why wouldn’t you want that same data-driven decision-making in your TV buy? So, whether you’re new to streaming or ready to double down, consider these four things in your CTV strategy:
- CTV offers premium inventory that can often give marketers a better return on their media investment.
- Targeting and measurement capabilities make CTV the most efficient channel for ad dollars.
- The logged-in nature of CTV makes it a durable platform as cookie deprecation looms.
- CTV and programmatic are playing an increasingly important role at the TV upfronts.
By capitalizing on the offerings of CTV, marketers can build data-driven campaigns, tie business outcomes to TV ad exposure, and optimize performance in-flight to the key performance indicators (KPIs) that matter most.
Is It Worth the Investment?
Before diving into all streaming has to offer, let’s address the elephant in the room: cost. Often, brands point to higher costs per thousand (CPMs) as a barrier to going all-in on CTV. However, if you take a step back and think about the real purpose of advertising—how it delivers on business goals such as audience penetration, sales, and conversion, then the value speaks for itself.
For example, say you’re a brand trying to reach multiple sclerosis patients, for which there are one million sufferers in the U.S., and you’re buying national linear based on low CPMs for scale. The result? Most of the consumers you reach are unqualified, and you’ve wasted ad dollars by delivering your campaign to the wrong audience. With CTV, you can work towards minimizing that waste through targeted reach—getting in front of those who are likely most qualified to go on script.
When it comes to content, streaming is unquestionably home to premium programming. Look at some of the most popular shows this year, The Bear, The Bachelor, or The Last of Us, and notice that these are all streaming on ad-supported platforms. On top of that, CTV keeps expanding in the programming opportunities where pharma marketing spend is growing such as live sports and prime-time events.
Brand-conscious advertisers are hypervigilant about the placement of their advertisements—no news there. So, for companies looking to run their ads in high-quality contexts, they should look to work with partners who can give them robust content signals. How many ad breaks are there? When in the content did the ad appear? What device was the content streaming on? The ability to answer these questions is proof CTV is more than linear feeds converted to a new device or platform, but really a space for ad innovation. The opportunities in streaming come at a time in the industry when advertisers need to be more data driven than ever.
With all the macroeconomic volatility this year, marketers have had to do more with lower budgets. The insights available from CTV campaigns can lead to more informed planning, real-time optimization, higher return on advertising spend (ROAS), and ultimately stronger business outcomes.
More Detailed—And Cookieless—Targeting
Consented first-party data, third-party data providers, retail data, and more can be leveraged in CTV for incremental reach against linear campaigns, as well as retargeting consumers based on linear ads they’ve been exposed to. If you leverage buying platforms with advanced identity graphs, you can get a holistic view of your CTV campaign in an omnichannel context and have better control of overreach and frequency against your target audience. That control can minimize oversaturation to help maximize your spend.
Streaming TV can provide granular measurement that marketers need to validate their media investments. Traditional age and demo reporting is too broad to identify how successful you are at reaching potential sufferers, or a percentage of a target population. CTV’s ability to tie ad exposure to outcomes and optimize performance in real time underscores why traditional budgets will continue to shift to digital. In addition, pharmaceutical marketers can measure a consumer or professional’s path to script across different online touchpoints by using device graphs and digital identity solutions within their tech stack.
Thanks to internet connectivity, a campaign can start by engaging users on CTV devices for upper funnel awareness and utilize sequential messaging to reengage them across their computers, phones, or tablets to move them down funnel towards conversion or high-value actions. The feedback loop is much shorter compared to the lag time required for linear TV results, and it’s much more difficult to recognize a user or track their journey from linear TV exposure to exposure across other environments. Upcoming privacy-related changes will only exacerbate the challenge. While third-party cookie deprecation is an issue hanging over the heads of all advertisers, the identity strategy you build in CTV can serve as a template for the post-cookie world.
Streaming is inherently cookieless—it always has been. Instead, it is an authenticated, logged-in environment primed for leading identity solutions such as Unified ID 2.0 (UID2) or RampID. These durable, omnichannel solutions can take advertisers into the next chapter of digital advertising—and have already.
For example, consumer-packaged goods (CPG) giant Unilever used UID2 in its ad buys and was able to find its target audience 12 times more effectively with UID2 than with traditional identifiers.2 These kinds of results show not only the benefits in building a stronger framework within CTV, but also a clear path forward for all cookieless environments when third-party cookies finally go away.
Shaking Up the Upfronts
It should be clear at this point that CTV is completely changing the game in television, which is also why it’s shaking up a pillar of television advertising—the TV upfronts.
During the TV upfronts this year, CTV and programmatic buying became a major factor in commitments. When Paramount closed their negotiations, they attributed all of their growth to interest in its streaming and advanced advertising products.3 Last year, Disney saw $3.6 billion in upfront commitments allotted for ads on Hulu, ESPN+, and Disney+, and it made up 40% of their upfront commitments.4 Given the flexibility and control available in programmatic, advertisers can better utilize data, understand publisher overlap, and implement strict frequency controls to aim to maximize reach against their target audience.
Publishers are also making premium inventory like live sports, primetime programming, and other key events accessible to programmatic demand for the first time. Progressive TV buyers are taking more control and requesting that specific portions of their network guarantees are run on the associated streaming services. So, as you navigate through 2024 planning, make sure to factor in this new approach to achieve the benefits of CTV in upfront commitments, in addition to scatter buys or broader digital video initiatives.
At the same time, it’s important to note that the rise in streaming doesn’t render linear TV obsolete or ineffective. On the contrary, linear TV continues to be an efficient reach vehicle, and that doesn’t look likely to change in the immediate future. If media buyers made a complete shift from linear today, they’d be missing out on a still sizable population that hasn’t cut the cord.
Practically speaking, pharmaceutical marketers need to discover incremental audiences to find new patients. Statistically, there isn’t significant overlap between audiences primarily consuming content on cable versus those consuming content via AVOD channels. TV planning should include a complementary mix of linear and CTV, and planning tools are available that use data to find the optimal allocation, based on the audience and objective.
From transparency and data to flexibility and control, the promise of CTV provides a path for pharma marketers to innovate how they engage with users and ultimately, how they measure results. As an industry, we’ve seen advertising budgets shift from traditional TV to streaming, due to consumer habits, and adoption trends show their migration is accelerating. While linear TV will continue to have a place in the marketing mix, it will be more important to adjust marketing plans to account for the changing landscape.
References:
1. https://www.samba.tv/resources/h1-2023-us-state-of-viewership-report.
2. https://www.thecurrent.com/uid2-unilever-audience-disney.
3. https://www.nexttv.com/news/paramounts-bob-bakish-touts-digital-advertising-growth.
4. https://www.reuters.com/business/media-telecom/disney-secures-9-billion-upfront-ad-sales-2022-07-18.
