Back in the early 2000s, many were predicting that TiVo and other types of DVRs would kill TV advertising. That didn’t happen, but now Netflix and Hulu seem to be making a go of it.
While Netflix has always been ad-free, recently Hulu announced an ad-free version.
What’s interesting about the announcement are its implicit assumptions. In particular, Hulu assumes that consumers will pay extra to avoid seeing ads. That might be true when looking at the traditional TV model, but in today’s free Internet, ads behave differently.
As any TV exec will tell you, younger viewers are tuning out traditional TV. Rather than sit around the tube, Gen Yers prefer to stream on their laptops, smartphones and tablets.
Since consuming TV content is no longer a lean-back experience, consumers are in a different frame of mind. Laptops, smartphones and tablets are interactive devices, designed for search and discovery.
For one thing, they are in less of a zoned out mode. Wendy Clark, president of sparkling brands and strategic marketing at Coca-Cola, has said that brand awareness for interactive spots are 130% higher than for noninteractive TV spots.
In this environment, viewers might actually want to view ads and even share them with friends, provided they either promote something they’re interested and/or are entertaining in their own right.
As Alan Wolk, senior analyst at TDG noted in a recent column in The Guardian, 30-second ads “had their heyday in the 1960s when people had a surplus of time, particularly in the evenings after work. There were no emails, text messages or social networks to keep up with.”
Now, “they are 30 seconds of sell, when all we really want is to sit back and watch our show.”
Despite this reality, many marketers still reconstitute their :30 or :15 for the Web as if those specified times were somehow deemed the gold standard for advertising.
The reality is that, unconstrained by such limitations, marketers can create some compelling advertising.
TV advertising has been predicated on the notion that you have no idea who is watching your ads. No matter how big your campaign, you don’t know if the viewer is watching a particular ad for the first or the seventh time.
Thanks to online metrics though, you do know who has viewed your ads and you can tailor them accordingly. Rather than show the same ad over and over again, you can tell a serialized story.
That’s what Mercedes did in March with four ads for its AMG GT S. The four ads showed the car accelerating from zero to 100 kilometers per hour to 310 kph (about 193 mph) in the final ad. The campaign ran on German TV, but it would have been even more effective if hit consumers online, where Mercedes could be sure that viewers weren’t jumping in on the second or fourth ad.
In addition to conveying a narrative, video ads can also be sequenced to drive a consumer through the purchase funnel all the way from awareness to purchase. A recent Facebook study showed that a Refinery 29 ad that used this technique experienced an 87% rise in overall view-throughs and a 56% conversion lift.
The other holdover from the TV era is the assumption that all video should be served up in a horizontal fashion. However, the default position for a smartphone or tablet is vertical.
Savvy marketers like AT&T, Macy’s and Taco Bell have recently started to release ads in a vertical format. So far, the results are very encouraging. An Audi campaign run in vertical video recently boasted a 36% video completion rate, which is 80% higher than average for the auto segment, according to Celtra.
The upshot is that treating online as merely another distribution channel for TV ads is misguided. That’s like thinking a billboard ad will work in a magazine. Digital offers a much better targeting mechanism than TV. The creative should reflect this.
The primary difference between TV and digital can be summed up in one sentence: Online is about finding your spot, while TV is about buying your spot.