Take a lesson from the early days of internet advertising

I’ve been around internet advertising long enough to remember the good ole’ days. You know - ugly banner ads on obscure websites and flashing “buy now” animated GIFs. Whew! I’m glad we’re past that, mostly. I also remember talking to local businesses about placing those banner ads on our website. We had a massive audience, we said. We have lean-in news viewers, we said. We give you important metrics, such as Clicks, we said. And business owners, mid-level managers, and office staff looked at us like we were some kind of weird. Who sees ads websites, anyway, they asked. No one really LOOKS at websites, they told us. They were skeptical - and for good reason. Those who showed indifference to the internet era fell behind. No question. By the time they understood they had to do “something” online, it was too late. Catching up was too much of a heavy lift for some.

Fast forward a decade or two. We’re in that same spot, only this time it’s Connected TV.

Case in point: eMarketer’s forecast on Connected TV ad spending released this week. Spending this year in the United States is up roughly 60 percent over 2020. Sixty percent!

*According to data from eMarketer, advertising on connected TV will will become a $14 billion industry by the end of 2021.*

I remember similar forecasts about digital advertising in general. Data suggested spending on digital would surpass TV at some point. Some of my colleagues guffawed. Others yawned. A few scratched their heads and wondered where the “experts” were getting their data. Well, it happened in 2017.

I repeat: we’re at that same point when it comes to Connected TV.

With a plethora of streaming options available to consumers, is it any wonder why dollars increasingly flow to places like HULU, Peacock, CBS, Pluto and others? And that’s without even mentioning the many DSPs and SSPs who have jumped into the Connected TV environment. They’re making their money, for sure. Yet, so many local advertisers are saying exactly what they said in 2009: who’s really spending time on the interweb?

Apparently a lot of people watch Connected TV - including your competition.

Is advertising on Connected TV expensive?

Perhaps the biggest objection I hear from local advertisers when it comes to Connected TV advertising is the cost. It’s so expensive, they say. They look at a $45 CPM for OTT and compare it to a $3 CPM for display. Or they compare that $45 CPM to an $8 CPM on broadcast TV, and they go for volume over efficacy.

Let me explain what I mean by volume over efficacy. Let’s say I’m trying to find 25-54 year-old men interested in outdoor clothing. I can go to broadcast TV and spend $1000 for a handful of :30 ads on programs like local news, Jeopardy, and if you’re lucky you can get a spot or two in football on Sunday afternoons. SOME of the viewers will include your target of 25-54 year-old men interested in buying outdoor clothing. Truth be told, however, the majority will NOT. If we excluded all of the non-interested viewers from that user pool and re-calculated the Cost per Thousand (CPM) on your ad campaign, what would it be? Yeah - I’d be willing to bet it’s around $45 CPM. Or higher.

(I’m a proponent of mixing broadcast and digital, but that’s a topic for another day).

Now, take that same $1000 budget and use publicly available data to target 25-54 men interested in outdoor clothing on digital platforms, including connected TVs. Your CPM for the digital campaign is still $45. AND.. you get rich reporting data, including a count of users who watched your ad and then showed up at your store to buy your BrandX outdoor pants.

Just do something

At the end of the day, I believe we should take a lesson from 2009. At that time, there were some big, national advertisers who were starting to “get it”. They began experimenting with online advertising in some pretty creative ways. They understood the internet ad industry wasn’t perfect, but they also knew they had to evolve WITH it instead of pretending it wasn’t there. The early adopters not only profited from digital, they helped SHAPE it!

You have a choice in 2021. You can be like the early adopters in digital display. Or you can just watch.

Just do something.