How to formulate streaming media marketing strategies for overseas CMOs

The rapid development of CTV advertising has also attracted many brands to invest in the market. So for brands, which streaming media platforms are the best choices for advertisers? How to choose?

The U.S. television advertising market may be the most mature and competitive advertising field in the world. Since Kennedy ran a large number of campaign ads on television in 1960 and won the election in the same year, television advertising has always been the main battlefield for political advertising. According to eMarket data, until this year, American politicians' campaign teams still allocated nearly 57.3% of their advertising budgets to television advertising. During the 2018 U.S. midterm elections, this figure even reached 75.2%.

But it is undeniable that with the passage of time, this "fertile crescent" of traditional commercial advertising is ushering in its own moment of change, especially since 2019, when a large number of streaming media platforms began to emerge, with lower fees and richer programs. This coincided with the suspension of a large number of sports events caused by the 19 epidemic, which caused cable TV to lose its most important ratings pillar.

What's more, compared with the elderly living in the Rust Belt in the "center" of the United States, the new generation of young Americans are more inclined to watch the programs they want to watch through the Internet rather than follow the program list of cable TV. Therefore, after July 2023, overseas streaming media has surpassed cable TV and accounted for 38.7% of the total TV usage time of American consumers.

For this reason, advertisers began to redefine and divide traditional TV and CTV (online TV is similar to the concept of OTT in China) into two completely different channels, and redistribute advertising budgets. As a result, the CTV advertising market has been booming, and even political advertising, which used to be the most important advertiser of TV advertising, has begun to turn to CTV advertising.

1. CTV advertising is still accelerating rapidly

As early as 2022, Morketing wrote an article titled "CTV Advertising is Growing Rapidly Overseas". At that time, we could already see that a large number of overseas media focusing on reporting on digital advertising were updating CTV advertising-related content in succession. The growth rate of CTV advertising was enough to make most practitioners in the CTV advertising industry cheer.

This growth rate has continued to this day. To a certain extent, American consumers in 2021 have replicated the "cord-cutting" movement in the United States in 2010, which has further accelerated the development of CTV. More and more traditional media and content producers have begun to try to enter streaming media and enter the CTV track of confidence.

As competition intensifies, reducing subscription fees has become an inevitable option for competition. Therefore, we see that Netflix, once famous for its subscription services, has also begun to try to cooperate with Microsoft to jointly develop new advertising services in order to launch lower-priced subscription plans to attract more new users. This reduction in fees coincides with the high fees of American TV platforms for consumers. Moreover, compared with traditional TV programs with only average clarity day after day, the rich content of Internet streaming media and the change in experience brought by 4K high-definition video are obviously more attractive.

With the increasing abundance of streaming content, it has driven the growth and innovation of streaming platforms and, to a certain extent, has also allowed TV manufacturers to join the competition. Both domestic Internet TVs and traditional TV giants like Samsung are trying to launch more low-cost smart TV models.

The mutual achievement of these three factors has obviously greatly expanded the audience range of smart TVs and further increased the usage time of smart TVs in the United States.

What follows is naturally the high-growth US CTV advertising market. Starting from 2023, overseas streaming platforms have begun to become an important marketing channel in the eyes of many CMOs. Disney reported that the number of advertisers using Disney+ has increased tenfold since the service launched its advertising tiers at the end of 2022. In March, the number of advertisers for NBC Universal's Peacock increased by 40% year-on-year.

Even political advertisers, who were once the big moneymakers of TV ads, have begun to turn to CTV. According to estimates by overseas media, as an election year, advertisers will spend $1.56 billion on CTV political ads this year, accounting for nearly half of all digital political ad spending in the United States. At the same time, from the specific data, from 2020 to 2024, the growth rate of political ads on CTV will reach 506.3%, making it the fastest growing form of advertising media. In contrast, as two representatives of digital advertising in the United States, Google's growth rate is only 215%, and META's growth rate is 86%.

So for brands, which streaming platforms are the best choices for advertisers?

2. How do overseas CMOs choose delivery platforms?

According to overseas media AdAge's survey of 174 brands and agents, a preliminary conclusion can be drawn.

First of all, at present, YouTube is still the most popular streaming platform for advertisers overseas. As the platform with the widest audience coverage among all platforms, it has successfully become the most popular platform among these respondents and the one that receives the most budget allocation. 75% of brands and agencies said that they currently advertise on YouTube. Although this is lower than 83% in the first quarter of 2023, the overall budget allocation has not changed much. 60% of respondents said that YouTube is the platform with the highest proportion of advertising in 2022 and 2023.

In general, the reason why YouTube has gained such widespread popularity is closely related to its huge number of users and wide coverage. According to data released by YouTube itself, YouTube currently has nearly 2 billion monthly active users. Nielsen's data also proves this to a certain extent. It shows that YouTube has maintained its leading position in the number of viewers of streaming platforms for 12 consecutive months.

In addition to the difference in user scale, YouTube is different from other media platforms that provide movies, TV series and TV programs. As a platform that mainly provides UGC (user-generated content), YouTube has a considerable advantage in content richness compared to other platforms. The wide range of content types can provide suitable advertising content scenarios for diversified advertisers, and even further consider combining advertising with the content of Internet celebrities on the YouTube platform to further amplify brand energy.

In this regard, Albert, a YouTube staff member, said in an interview that in the past three years, they have invested nearly $70 billion in YouTube, paying nearly 3 million creators who upload large amounts of content, thereby ensuring a rich content inventory and, in turn, attracting all kinds of users interested in different content, so that everyone can find content that interests them.

In addition to the front-end advantages, on the back-end, since Google is the publisher of YouTube, this means that YouTube can connect to Google's DSP (Display & Video 360) and open Google's user login data to YouTube as first-party data, enabling YouTube to use Google's first-party search and browsing history data. Now that third-party cookies are about to be phased out, Google's first-party data will obviously be more attractive to advertisers.

Next, Amazon's ad-supported subscription version of Prime Video is tied for second place with Hulu, owned by Walt Disney Co. According to the survey, more than a third of brands and agencies (36%) said they placed ads on Hulu and Prime Video, respectively, as of the first quarter of 2024. Hulu also ranks second after YouTube in terms of advertising budget allocation. 13% of brands and agencies said they allocated the largest portion of their ad-supported streaming budget to Hulu in 2023 (60% said the same about YouTube).

It is worth noting that the ad-supported subscription version of Prime Video is a new service that was just launched in January 2024. Overall, although both Prime Video and Hule are not as popular as YouTube in terms of audience coverage, both have their own unique data advantages.

On the one hand, as the largest e-commerce giant in the United States, Amazon directly provides Prime Video streaming membership services with ads to its users who subscribe to Amazon Prime (prime members of Amazon's e-commerce platform), which has led to a very rapid growth in its user base. In addition, as a retail platform closer to conversion, Amazon has a large amount of consumer data, which enables Amazon to provide additional data to organizations and brands, thereby helping its streaming platform gain additional advantages to a certain extent.

Similarly, in terms of audience size, Hulu has announced that it has 115 million users subscribed to advertising-supported memberships. Furthermore, as a subsidiary of Disney, Hulu also has the corresponding authority to access all of Disney's first-party consumer data. Through the company's Disney Select platform, it can also provide Hulu with a large amount of first-party data reserves. Obviously, this is very similar to Amazon's advantage.

Conclusion

Overall, overseas CTV advertising is unsurprisingly heading towards the data-driven, programmatic digital advertising fast lane. Coupled with the large number of mergers and acquisitions in the field of AdTech by CTV advertising giants in recent years, the poor advertising experience faced by CTV in the past is being continuously improved. Coupled with the data advantages brought by major Internet and giant companies, CTV advertising is becoming completely different from the past. Perhaps in the next few years, we will see the further accelerated growth of streaming platforms and CTV advertising.

Author: Innocent Roland

Source: WeChat public account: "Morketing (ID: Morketing)"