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Is There a Future In Connected TV Marketing?

By Wright Hilsman in Direct Marketing on February 27th, 2015

Connected Television growth in the United States is expected to continue in an upward trend for the foreseeable future. What does this mean for your brand?

connected tv marketing

Increases in adoption can be linked to growing usage of Video on Demand (VOD) services such as Netflix, Hulu and YouTube. In addition to this, the proliferation of Over The Top devices such as Roku and Apple TV has lessened the cost of entering into the Connected Television marketplace while also forcing price drops for Smart TV’s. Connected Television is defined as any television capable of being integrated with the internet either through built in linkage or third party devices. This growth is real and represents a marked change in the way video will be consumed. The real question is how will this affect advertisers?

connected television

Connected Television Marketing Will Take Some Work 

Consumers’ demand for video services and programming lies at the heart in the shift from linear services to connected services. The Connected Television library of shows represents a great opportunity for consumers to access shows on their own time, as well as view shows not necessarily available through linear television services. While limits currently exist with what can be viewed, look no further than MLB TVs’ blackout restrictions for local markets, due to pressure from pre-existing contracts between service and content providers. It is apparent that winter might be coming shortly for these service providers.  It is worth mentioning again that one of the great drivers of growth of connected television has been the proliferation of third party devices enabling those without SmartTVs access to streaming services.

Smart Television

Where Should Advertisers Put Their Dollars?

The future is in streaming, but when the majority of viewing switches over to Connected Television consumption depends largely on where content will be available going forward. A shift is certainly starting to occur though.  With more consumers demanding Connected Television viewing methods, providers are responding by offering ancillary viewing services for their content.  Sports is still one of the main content genre consumed through linear television.  However, by observing the most recent collegiate football playoff it is easy to see that ESPN offers more than just one way of watching through linear television. In order to have access to ESPN3 or Watch ESPN you need a subscription service with a cable/ satellite provider, but the Connected Television experience is still being offered as a way of providing more value than what would normally be expected from just a linear experience. In the end, the owner of the content is king. Where that content will be distributed in the future will largely impact the prevalence of Connected Television ownership.

Is Connected TV Bad for Advertisers?

How this will affect advertisers depends on the time frame that you are looking at. In the short term Connected Television won’t replace linear, but rather act as a complimentary factor where service providers and advertisers alike can benefit by making TV more engaging. What advertisers can learn from the engagement is where the real exciting opportunities currently exist. Of course you can say that this type of experience isn’t currently being offered - ads don’t exist on streaming services. Well…there’s always Crackle… bucking the trend of subscription services this little pony offers feature length Hollywood movies and shows, but at the cost of watching advertisements. Crackle‘s value proposition rests squarely on the understanding that people are willing to accept advertising in order to watch television at their own leisure – without a fee. The marriage which can occur between a service provider like this on Connected Television and programmatic advertising is where the true possibilities exist of revolutionizing advertising on television. Still, several large roadblocks remain.

Will Regular Television Be Obsolete?

While still early in its development cycle, it is entirely possible that this new service will recreate the same media buying upheaval caused when television overtook radio as the advertising medium with the most reach. This same change could occur with Connected Television in regards to television, but only time will tell. 

We hope that this post served as a way of sparking your interest in the emerging media of Connected Television.  What do you think lies ahead for the future of this new medium?  Want some perspective? Break out your reading glasses for this paper on Radio Vs. Television: History

 

BKV can help you react to the growth of connected TV! Contact our experts today to learn more.