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The Evolution of DRTV

By Bree Roe & Christine Reed in Direct Marketing on December 30th, 2014

With the rise of time-shifted TV viewing, the consumption of shows online, and the adoption of second screen behavior, TV consumption habits are evolving quickly. On top of this, major demographic shifts are happening in the US. All of these factors mean marketers must evolve their advertising strategies to align with the changing landscape.

 evolution of drtv

 

Between the evolution of TV consumption habits plus US demographics shifts amongst Senior and Hispanic populations, advertisers need to evaluate if their DRTV strategy aligns with the changing landscape. Let’s take a look at the two trends:

Evolution of TV Consumption Habits

When a consumer wants to view content, they now have more options than ever. Outside of linear TV, consumers can access much of their preferred content online.

43% of US households also own Connected TV (CTV) devices — that is, devices that connect their TV to the Internet. Consumers use CTV to access premium content (Netflix, Amazon Prime, movies, news segments), while brands use CTV to generate brand awareness and engagement/action. The targeting capabilities for CTV have improved immensely, even within the past year. It’s now possible to target specific demographics and geographies to make commercials more relevant to viewers. You can also retarget a CTV viewer based on their interactions with your digital ads. This type of multi-device targeting will become increasingly mainstream as the average household number of internet-connected devices increases.

Second screen behavior has also become commonplace, with 79% of consumers using a digital device such as a laptop or smartphone while watching TV.

Another trend is “cord cutting”; however, it’s occurring at a slow pace, with less than 7% of US households having gotten rid of paid TV subscriptions in favor of other sources for program consumption.

Changes to US Demographics

There are currently two major demographic shifts happening in the US:

Seniors

  • As a result of longer life spans and lower birth rates, a record share of the population is growing gray.
  • 10,000 Baby Boomers a day turn 65 – and will continue to do so every single day between now and the year 2030.

Hispanic Population

  • The Hispanic population is growing significantly and quickly.
  • In 2010, 15% of Americans identified themselves as Hispanic.
  • By 2025, this number will have risen to 22%.  
  • By 2060, Hispanics are forecast to comprise 31% of the US population.

When considering the senior audience, TV is still the #1 mass medium reaching 90% of adults 65+. TV’s reach is even higher when one considers adults with a HHI of $100k.

The Hispanic population in the US commands immense purchasing power. Economists have observed that if the US Hispanic population were a country, it would rank as the twelfth largest economy in the world, commanding more than $1 trillion in purchasing power. While this demographic tends to watch slightly less television than the average viewer, it can more easily be targeted via Spanish-language stations. Hispanics are 15% more likely than the online average to be found watching online TV, which offers a great opportunity to test online video. Don’t forget that you’ll need Spanish-language creative. Data from Nielsen’s “State of the Hispanic Consumer” indicates that Hispanic viewers like TV ads 51% more if viewed in Spanish rather than English.

To reach both the senior and Hispanic audiences with DRTV ads, advertisers should consider addressable TV. This technology allows brands to selectively target specific audiences according to geographic, demographic and behavioral segmentation. When considering addressable TV, however, advertisers must weigh the higher CPM that comes with granular targeting, versus the lower CPM and greater reach of a standard DRTV buy.

While TV still remains a highly effective advertising tactic and the medium with the highest reach, changes in consumer behavior will necessitate adjustments to DRTV strategy. Ultimately, an engaging :60 or :120 “traditional” DRTV spot will remain a reliable vehicle for a advertisers. For most advertisers that run DRTV only, however, BKV typically recommends shifting a portion of DRTV budgets to test digital tactics. Such a test ensures that the advertisers’ message is available wherever a consumer is accessing content.

Thinking longer-term (3+ years), a larger percentage of budgets will need to be shifted to digital channels and emerging TV tactics as new technology gains traction and media targeting capabilities improve. This evolution will only help improve campaign ROI, as brands are able to become more targeted and strategic with their on- and offline media buys.

The landscape is evolving. Make sure your advertising strategy evolves with it so you don’t get left behind.