Internet Cable TV and the Rise in Online Marketing
Where to spend your marketing dollars is an important decision. With the number of people who now watch cable TV online, dollars are shifting mediums more than ever. Internet cable TV and the rise of online marketing is starting to show. In the US, not only are more companies placing more marketing value to online advertising, some cable companies themselves are reducing the number of advertising slots per commercial break in order to keep viewers. And, with more and more households cutting the cord, it looks like more and more viewers are online streaming vs. watching cable TV. According to an eMarketer study last year, in 2015, “4.9 million US households that once paid for TV services but no longer do, a jump of 10.9% over last year”, and, “with the number of cord-cutting households jumping another 12.5% in 2016”.
In Canada, our situation is a bit different.
- Our internet plans are more expensive, especially for unlimited plans, but so are our cable plans (In November 2015 new basic cable offerings at a lower price point came into effect, but these skinny packages offer few viewing options).
- Our internet service offerings are also more stringent due to broadcasting standards and Canadian content requirements.
As unlimited internet plans lower (mainly through third-party companies at the moment), Canadians are likely to follow the US trend towards streaming cable TV.
So, what does that mean for the traditional advertising model? TV advertising is likely to continue to go down. US Cable companies are starting to see anywhere from 2% to 15% down year-over-year in 2015. That trend is likely to continue. Online advertising, on the other hand, not only continues to grow, it actually can be much more effective.
Benefits of online video advertising:
- Most paid online advertising requires a minimum viewing time before skipping the ad (no DV fast forwarding here).
- Online video can be extremely targeted.
- For companies with smaller budgets, it is easier to get into the advertising game.
- Content is more relevant for the audience and therefore, more likely to be effective.
- Digital advertising is measurable more so than traditional mediums. You can measure the impressions, click-through-rate (CTR), cost-per-click (CTC), and even track the journey through to purchase for companies with e-commerce.
Online advertising may not always get the high numbers that TV advertising used to, but you also don’t pay to advertise to people outside of your target audience as much.
Not all streaming services offer traditional advertising methods. Netflix, for example, does not show commercials during and in between shows like Hulu in the US does or watching cable streaming from stations like CTV etc. Netflix is the number one streaming service in the US, but numbers do continue to grow for other Streaming Video On Demand (SVOD) services that do offer some commercials.
Keep in mind, though, that these channels are not the only type of streaming video. YouTube is another major source of online video viewing. Google, who acquired YouTube in 2006, through their chief business office, Omid Kordestani, says that “YouTube reaches more 18- to 49-year-olds in America than any U.S. cable network”. And as of you have all experienced, you can’t avoid ads on YouTube, at least not for the first 5 seconds.
How heavily skewed is your budget when it comes to media spend? Do you mainly invest in digital, or do you still invest heavily in TV or maybe another medium?