In July, Disney+ announced it would add an ad-supported subscription tier in December. The move followed a similar proclamation by Netflix, which said a few weeks earlier that its own ad-supported tier would debut in early 2023.
Coupled with the rise of well-subscribed, ad-included options from Hulu, HBO Max and Paramount+, the pivots by the streaming world’s two biggest players represent a significant shift in the streaming-TV market. As it turns out, consumers have no problem watching ads if it means paying less for content.
According to Comscore’s 2022 State of Streaming analysis, 2022 has seen a 29% boost in U.S. households streaming advertising-based video on demand, compared to a 21% increase for subscription-based video on demand. Most of this content is watched via connected TV (CTV) — on smart TVs, streaming devices (Roku, Chromecast), mobile phones, computers and any other device that streams video content over the internet.
Meanwhile, the numbers are on streaming’s side: According to eMarketer, there are 87 million streaming households in the U.S., versus 70 million pay-TV homes.
While CTV offers viewers more flexibility in what and when they watch, it is also trackable in a way that traditional TV is not. Most smart TVs have built-in automatic content recognition, a technology that anonymously tracks all viewed content. This potentially gives marketers unprecedented insight into where and how their ads are seen.
“This proprietary data creates a more robust and vibrant picture of connected consumers and the things they care about — ultimately empowering you to thoughtfully target, optimize and efficiently deliver campaigns across platforms,” said Samsung Ads director, health/pharma Ryan Wilson in response to emailed questions. “What this means for advertisers is that Samsung Ads is able to run campaigns across its entire ecosystem, to reach unique viewers at scale and expand the reach of traditional linear spending, effectively bridging the gap between linear and streaming.”
Meanwhile, many streaming services and devices allow for individual user profiles. This largely does away with the clunky “household” identifier and lets services (and their marketing partners) drill deeper down on personalization.
CTV thus offers healthcare marketers myriad ways to target consumers on a one-to-one level and more precisely measure campaign impacts — that is, if they collect this data methodically and use it thoughtfully and responsibly. The question then becomes: Is the marketing community up to the task?
Many experts are bullish, though they believe more channel-specific education is needed.
“A lot of people don’t realize that CTV is as measurable as anything done on digital,” notes John Mangano, SVP of analytics at DeepIntent. “It has a level of precision that I would argue is a little better … CTV is usually tied to an individual’s device, and those devices have a more durable identity graph.”
A report released by DeepIntent in collaboration with LG Ads compared programmatic CTV to traditional, or linear, TV buys. It noted that the latter relies on demographics such as age, gender and geography, while the former allows for the creation of campaign-specific audiences. Those audiences are based on “propensity models that can leverage anonymized data” from sources such as medical and pharmacy claims and health surveys.
“CTV helps you understand the degree to which you’ve reached your target patient group and helps the brand better plan for how to reach them, as well as quantify the impact it could have,” Mangano explains.
DeepIntent capitalizes on the granularity of CTV data by using machine learning to process various scenarios and make decisions at a much quicker rate — and on a much more individual level — than what has traditionally been possible with linear TV.
“Instead of looking at the whole population of who’s watching an individual buy, we’re able to look at the individual that we reach in each offering or bid that we set,” Mangano continues. “AI allows us to learn where we’re having the most success and then automatically adjust for those successes in less than a second.”
When CTV data is used for this kind of precise targeting, it’s much more cost-effective than linear TV. This, in turn, creates opportunities for smaller brands to maximize their advertising spend.
“We have clients who have been able to find unique reach within CTV that makes it more cost-effective for them to reach the exact same audiences they were trying to reach in linear,” says Publicis Health Media chief digital officer Ray Rosti. “That’s how they can compete, because they’re targeting the same audiences that their more competitive brands are targeting, but in a connected TV space versus linear.”
Mangano agrees, adding, “Smaller campaigns need the efficiencies that digital and CTV can give them for them to be worth it, so CTV truly does offer the opportunity for smaller brands to benefit from television.”
As digital advertising shifts away from third-party data (such as cookies) and toward more privacy-friendly first-party data, it will be critical for pharma marketers to invest in sources of first-party data. In other words: Hello, CTV.
“One thing we’re watching closely is, ‘How are all these streaming services moving toward an identity-based solution?’” Rosti notes. By way of example, he points to NBCUniversal’s launch of the NBCUniversal ID earlier this year, which incorporates consumer data across the company’s family of content providers.
However, pharma marketers still have to figure out how to capitalize on first-party data in a way that makes sense for the industry. Much of the discussion around first-party data, after all, remains focused on driving incrementality.
“If I’m Uber, I want people to take two rides instead of one. But in pharma, there is no incrementality, because I can’t have someone take two pills instead of one,” Rosti explains. “What I’ve been saying is that adherence is incrementality: We want to make sure we don’t have people dropping off scripts.”
Given that it is owned by data-hoovering behemoth Google, YouTube can access one of the world’s deepest troves of first-party data. That said, a company spokesperson reports that CTV is the platform’s fastest growing consumer surface, accounting for more than 50% of ad-supported streaming watch time on CTV among people 18 and over.
What can hold brands back from using first-party data effectively? A lack of coordinated planning about which specific data to collect and how to analyze and activate it.
“Health marketers can overcome these challenges by establishing clear customer experience goals and aligning them to business objectives,” the spokesperson adds. “From there, they can create a plan with measurable goals to guide which data you collect and invest in.”
Jo Ann Saitta, a global chief executive in healthcare business/digital transformation and operations at Ernst & Young, similarly emphasizes that medical marketers should focus on this type of “zero- and first-party consumer data.”
“Especially with the upcoming deprecation of third-party cookies and impact on the use of third-party data, marketers need to focus on how they are going to own and protect the relationship they have with consumers through data,” she says.
However, Saitta warns that, in order to achieve success with any kind of consumer data, marketers need to think through the lens of the audience they’re seeking, rather than simply chase the latest technology.
“The key is to test, learn and measure,” she continues. “Marketers should begin with an understanding of their audience and the segmentation, and a level of forecasting to understand if this channel will have a role and return in the marketing mix. While ad-streaming services are often perceived as a ‘cool’ channel, they need to contribute to a relevant and customized marketing engagement plan for customers.”
Rosti also reminds marketers never to forget that content is king and that it’s crucial to understand audiences in relation to what they’re watching, rather than how they’re watching it.
“We’ve historically bought on streams or network lenses, and those lines are now blurred,” he says. “People say they’re watching Grey’s Anatomy; they don’t say they’re watching ABC.”
With so many platforms and so much content, it’s no surprise that there’s been a surge in streamer drama. Witness the implosion of CNN+ a month after its high-profile (and costly) launch, or the hailing of Netflix’s loss of 1 million subscribers as good news.
That’s why health-side media execs are increasingly considering questions such as “Who is going to be a loser?” This, in a nutshell, is what prompts Rosti and team to “think about this idea of content over screen, or even content over platform …. It’s really about keeping a pulse on content and content-viewing behaviors, and what is gaining at the moment.” Gen Z discovering Friends and The Office via streaming platforms certainly qualifies.
As for what’s next, Mangano expects further consolidation in the streaming space. But he’s not all that concerned, nor does he believe marketers or data wonks should be.
“The nice thing about the programmatic environment is we can expand to as many apps and channels that can exist and deliver content,” he notes.
Not surprisingly, Wilson is similarly bullish: “Success in this new television landscape is possible when driven by data. For brands yet to embrace the growing CTV ecosystem, now is the time to examine their spending across all formats to rebalance budgets and reach consumers where they’re watching.”