Episode Transcript
00:00:05 Hello, and welcome to The Loop Marketing Podcast. I'm your host Elise Stieferman, Director of Marketing at Coegi. Today, we're joined by Coegi’s president, Sean Cotton and Vice President of Marketing Ryan Green. Let's get started.
00:00:19 All right. So today we are talking about one of my favorite subjects and a popular one for Coegi, connected TV. Coegi was an early emerger into the space, we saw a lot of potential with CTV for brands, especially those who maybe weren't able to tap into linear because it was cost prohibitive or you know, whatever reason. So how do you see television in general evolving over the next five years, knowing that cord cutters are becoming more prevalent and just the way people are consuming television.
Sure. Well, technology is going to continue to drive cord cutting in that for the last several years now, internet connected televisions are flooding the market. That's the only thing that manufacturers even produce at this point. So those who may still be watching in a linear environment, they may buy their internet connected television and still have their cable subscription or tune in to their network stations. But as they become more familiar with this technology, pretty much all generations now realize, hey, I can watch what I want when I want and if I'm a home and garden enthusiast, I'm going to subscribe to HGTV or Discovery+. Or if I'm a Marvel fan, Disney+. People are realizing that they can choose the content that they want and watch it when they want across all generations. And so this streaming adoption on the TV is just going to continue to grow. Now, the flip side is that all of these streaming options are available. There's a tipping point as to what people are willing to tolerate in terms of their wallet that are willing to dedicate towards that. So there's only going to be certain services that they want to monthly pay a subscription too. And so we will see the rise of advertising-funded streaming television, premium content, television shows and movies, I believe, even more so over the next few years.
You’d be hard pressed to see the amount of change that we saw the past five years over the next five years. Everything that really changed with both the pandemic, the availability of internet connected televisions as a primary television resource. I think to your point, Sean, we're certainly going to see more advertising supported streaming services as there's more of a proliferation of options. Even Netflix is likely going to go to some type of ad supported model. You saw that with HBO for the first time, which, from the advertising side, is very exciting.
And now Disney+, too.
Disney+. So with that, publishers are also going to get more savvy about releasing more inventory programmatically. And I think one of the faults that we've seen from streaming currently, although that’s quickly changing, was very high frequency of when there was, they were tied to the upfronts. A lot of times upfronts were overestimating viewership. And we're having to jam a lot of impressions in front of a smaller audience than expected. But as we see a lot more private marketplace inventory coming through, I think we're going to see a lot of the advantages that advertisers can use to control frequency, to be more targeted from an addressability standpoint and a lot of the hopes and dreams that we had five years ago for television actually coming to life. And you're already seeing that with IMB TV through Amazon, and being able to see that in Hulu and a variety of really great inventory sources that we're able to align contextually and with addressability for our brands and advertisers.
00:04:46 Why do you think some brands have been hesitant to divide their budget away from linear, if they've historically used that, and begin to dip their toes into CTV? Obviously there's the reach component. I mean, you know, it's familiar.
I think linear's still an easier thing to understand and buy against. It's what they're used to. You still have generations of media buyers that speak in GRP that understand the upfronts. Publishers, too, still want to transact in that legacy model. So I think there's a hesitancy from a lot of the larger agencies that are incentivized to do it the old way. There's also for a long time been hesitancy from publishers and certainly from the cable providers that would allow, do have the technology to allow for addressable advertising that just haven't had a financial means to do so. What we've seen over the pandemic though, and the control that users have on when, where and how they're going to consume video content across their cell phones from seeing the proliferation of TikTok and increase in YouTube as well, there's a lot more competition for eyeballs even on the TV perspective. So I think because of that, there needs to be more flexibility and nimbleness that publishers are starting to be able to lean into, to make that inventory available programmatically so that smaller budgets do have a chance to be able to show their ads in the same place that national advertisers are able to as well.
And from the buy side, linear TV has typically been measured much differently than the way you can measure connected television and you cannot measure connected television the way you do linear TV, which is based on modeling of groups of people in a one-to-many delivery format. Whereas connected television is really one-to-one per household. So because the measurement models are so different there's just been this temptation to keep them separated and to put the CTV in that digital bucket in that digital environment. But what savvy marketers have started to see is that as the proliferation of streaming television takes place as a part of the overall pie of all television viewing, is that the only way you can accomplish those traditional goals of reaching an appropriate frequency is having the right mix of connected television and linear, because otherwise what's going to happen is you still can't build reach faster than linear at this point. That's the fastest way to reach large groups of people quickly, but that point of diminishing returns comes much sooner than what it used to, to where it doesn't make sense for you to invest more dollars in that channel because the incremental reach that you're obtaining doesn't justify that cost. But what savvy marketers are realizing is that when they reach that point, they can now apply their connected television buy in a way that provides profitable, incremental reach. But they have to measure it differently. It can't be the standard GRP and TRPs, it has to be more based upon a CPM basis, a unique reach basis. As people become more accustomed to measuring their TV in that way, I think we'll see more of a convergence of those channels in the same budget pool.
When we started Coegi eight years ago, we were on TV for a long time. And it used to be that we were promoting that fifth quintile as something that you could have more efficient reach for on digital. Now you'd be hard pressed to get to that third quintile of adults 18+ by just buying on linear TV, you have to mix in connected TV and other video formats if you're really going to get to 80, 90% reach, it's impossible to do. Now that kind of easy button of linear with that first 50% is still very attractive. It really is, but it's not a complete mix. And just like so many things in marketing, you have to be able to take a look at all of the tools that are available to you. There are very few brands that are going to be able to build and generate new demand and new awareness of their brand through one channel anymore. Maybe with the exception of class action lawsuit lawyers on billboards. You have to be able to take a multipronged, multi-channel approach whether it's on video or with digital or social or other traditional channels. It's very few that are gonna be one trick ponies anymore. It makes it more challenging to buy media but it does give you a lot more prescriptive tools that are available to really reach your audience in impactful ways.
00:10:42 You know, thinking about CTV from a digital perspective, something we talk about on digital in terms of creative is how do we stop the scroll with an ad. CTV and even linear, what can marketers do to stop the mute? How can we keep them engaged in those 15 or 30 seconds that is perhaps feeling, if it's a poor creative, interruptive of their experience?
Well, one simple way to do that is take a look at your creative length. The standard 30 seconds is not necessarily the best solution for every brand in the CTV environment. Perhaps a 15 second spot is all you need to communicate your brand message and have that call to action for the consumer. I think taking it off of the big screen, short form video in the terms of like even 6 second videos are something to look at. With some ad formats, such as interactive ad units, there's limited scale for that. But I know in one campaign that we ran and it had the QR code on it, before the infamous Coinbase commercial, we actually did that on CTV, and we actually did see a lot of engagement from that QR code on the website.There wasn't enough scale there for that to accomplish all of our campaign objectives. But it did give us a really strong signal as to where we were driving engagement in that channel and things that we could learn from. I think the other thing to think of in terms engaging with our creative is getting to the point quickly, having our brand up front in the first few seconds, and engaging that viewer as soon as possible. And then in the CTV environment, addressability is also very important because if it's relevant to the person that's viewing the ad, they are going to lean in a little bit more versus, just like you said, walk away or go make a sandwich or something like that.
Well, automation is going to give a lot more data to the creatives when you're doing testing. So,if you take a look at maybe running something on YouTube, you would be able to see when people mute and when people skip. And if you're running some petri dishes there before making larger commitments to either connected TV or to linear, you're gonna have a pretty good idea of which audiences are responding already. You almost have a pretty optimized creative campaign that way. So because you get a lot more metadata on each iteration of creative and the addressability to understand the audiences that interplay with that creative, it's actually pretty straightforward to make some of those comparisons. I would say it is becoming more of a prerequisite for the creative and media teams to find those opportunities, to think about what our communication strategy is going to be? What microtargeting are we able to execute through connected TV? What messages may resonate with each of those audiences in those environments? And how can we test some hypotheses? If you're not doing that, I'd say that you're behind.
00:14:22 So when we think about addressability and personalization on CTV, is there any impact you all predict with the cookieless future on how it impacts that particular channel in the efficacy and the scale?
Well, it may impact it less than the majority of others, because there are no cookies that are associated with connected TV. Now there's still cookies that are underwriting some of the data underneath that, that may still have some effect. You may not have as much metadata associated with a connected TV device as you may have for cross device…mapping that will have some befurcation, but you're still going to have a fairly rich data set to be able to understand the households that you're talking to, the programs that they're watching. There is still ACR technology that's able to listen in on and be able to do competitive conquesting. These will still provide a lot of signals in a privacy compliant way that should be attractive to brands and advertisers. Would you agree, Sean?
Yeah, I think we'll see a growth in CTV as a result of the cookie deprecation, especially when it's tied to campaigns that are measuring actual business results and goals. And we've seen this over and over again: when we adjust our mix to a higher funnel execution such as CTV, that it lifts all other campaign performance metrics: search, website engagement and so forth. And the reason why a lot of advertisers haven't done that to date is because it's not trackable to the typical online digital metrics for conversion.
Because It's not trackable to clicks.
To clicks, right. But when we change that lens through which we're viewing performance, we realize that it's that mix of targeted views on the big screen, along with the ad recall messages through our display, through social and search for conversion. These all work together to drive the best business results.
00:16:50 I think the deprecation of cookies really helps CTV as a channel because it's going to increase the volume of incremental measurement, of media mix modeling, and those two models generally produce better results for the non-clickable environments. American Express was able to show predictive growth from audio to credit card signups about three weeks later. So they were able to understand their lifecycle from top of funnel all the way down to conversion by doing some of the things that may be old school, like a medium mix modeling that are more directional, that aren't slaves to the clicks, that are able to show the full picture. So being able to do similar things with connected TV to do that without out of home and traditional, I think are gonna be really powerful for really having a more accurate source of truth for CMOs to take a look at when they're evaluating how their media is performing in-market.
00:18:04 So to, to wrap up what, are three key advantages for brands to lean into CTV now, or begin testing that channel if they haven't already?
Well, the measurement, right. Measure what matters. So if you are a marketer that does a lot with video, with CTV or otherwise, if you're able to put in some medium mix modeling and start to learn adjustments that you can make from an incremental approach, you're lightyears ahead of a number of those other brands. Lean into addressability, too. That's still very powerful and is an advantage that you're gonna have over some of your sister brands that may be only on linear or buying on GDP or on index. And then really start to understand the context in which your ads are appearing.There's more publisher data that's gonna be available from sign in data within app environments that are also going to be powerful and will start to allow you to get more granular on the programming that you select as well. Having those publisher-direct relationships, whether you're an agency or a brand, are important things to be able to leverage as we move into the cookieless future.
Great. Thank you both for being here.
Thank you. Thanks Elise.
00:19:44 Thank you for listening. Coegi is an industry leading performance marketing agency based in the Midwest. We've learned a lot since our founding in 2014 and started The Loop Marketing Podcast to share some of our hot takes on marketing trends we're following, best practices we’ve discovered, and actionable tips for improving your digital strategy. We'll see you next time.
