07-02-2023

YouTube and Connected TV: Why and how TV advertising needs to be rethought

Kevin Haab

Senior Specialist Media Strategy

For decades, the TV market was considered a safe bank for advertisers. The medium, with its high reach and communication power, enabled companies to reach a broad audience. But with streaming-on-demand and connected TV, media consumption behavior has changed. 

Online video has evolved from a pure lean-forward format to a hybrid-use medium watched both on the go via smartphone and at home on the couch. This shift offers new opportunities for targeted and moving image campaigns.

Advantages of Connected TV

Linear television has suffered a steady loss of reach in recent years, especially in the young target group. At the same time, the popularity of streaming-on-demand continues to rise. Connected TV is benefiting from this. CTV is a combination of television and Internet access, enabling users to access online content on the screen of their smart TVs. This makes it possible to reach groups of people who do not consume linear television. A study by Goldbach in 2022 showed that 75% of respondents in the DACH region already use a smart TV. According to the IGEM Digimonitor 2022, the proportion of people receiving "internet content" via their TV set has increased by 71% since 2020 to almost 2.5 million people in German- and French-speaking Switzerland. CTV thus benefits not only from a broad reach, but also from the digital strengths of targeting.
 

Lean-back and lean-forward channels

For a long time, commercials on linear TV were considered superior to online video campaigns, despite declining usage, because they generated high-quality advertising exposure. After all, TV advertising is consumed from the comfort of the sofa. Viewers are in a "lean-back" position: relaxed and more willing to focus their attention on the advertising being played on their TV screen.

This contrasts with “lean-forward” channels like social media, where users are much more active and consciously looking for specific content, such as a quick explanation or a brief distraction. Advertising acceptance decreases significantly in this context. 

However, this does not mean that lean-back media are automatically better than lean-forward formats, but that both offer users different incentives. Advertisers should therefore adapt their strategy to the expectations, mood, and behavior of consumers on the respective channel to achieve the greatest possible impact for their campaigns.

 

Online videos as a hybrid between lean-back and lean-forward

Online video is often viewed by advertisers as fast-moving and highly dependent on the short attention span of consumers. But the increasingly hybrid use on different devices also influences the way of reception. The clear categorization into lean-back and lean-forward no longer exists for online videos.

A prime example of this is the YouTube platform, which around 3.5 million Swiss people use regularly according to the MACH Strategy Study of 2022. YouTube videos can be consumed via smartphone and desktop as well as via CTV in the same way as traditional television. With CTV, YouTube is thus consumed in lean-back mode, with the additional advantage of a significantly lower advertising load than on linear TV. In addition, videos are often viewed in company rather than alone.

According to a study by YouTube, online videos consumed via Connected TV are also in no way inferior to classic television when it comes to advertising recall. This result was confirmed in practical implementations for Sanitas, among others, last year. Alongside the SRG channels and meta-platforms, YouTube Connected TV was a key success factor for the outstanding results of our Sanitas case.

In campaign implementations, we regularly found that even videos that exceeded a playback time of 25 seconds achieved high video completions of up to 70%, especially thanks to CTV. Several market research projects confirmed the advertising effect in terms of advertising recall, which ultimately led to a significant influence on brand familiarity at Sanitas and changed the preference structures for customer acquisition in the fall.

 

Conclusion: The budgeting and distribution of video campaigns must be realigned

The growing popularity of Connected TV and the successful placement of long commercials mean that marketers must think differently about the medium of TV. For example, with the high-reach channel YouTube and, in many countries, advertising placements on Netflix, new options are emerging alongside or in combination with classic linear TV channels. 

It is therefore advisable to reevaluate the benefits and distribution of advertising budgets for video campaigns and to adjust strategy and media planning accordingly.

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