Let’s Speculate Why.
If you’re a member of Gen X like I am (age 42-57), you grew up in an age of emerging entertainment technology that changed the world rapidly. Up until about 1984, my television viewing encompassed just 4 channels: ABC, CBS, NBC and PBS, before the world opened for me with Cable TV, which cost my parents $12 a month (to quote Archie and Edith Bunker, ‘Those were the days…’). I wanted my MTV, and finally got it! My family didn’t get a VCR (Video Cassette Recorder, a TIVO/DVR ancestor for you youngsters) until about 1986, so we had to watch TV LIVE, as it aired, or we missed it. We watched what was on TV, or we played outside. We’ve come a long way (baby) when it comes to entertainment choices, haven’t we?
As TV goes, in July of 2022, something happened that never happened before. A mountain.com article revealed that Connected TV (CTV, for internet-streaming services, known to marketers as Over The Top, or OTT) surpassed Cable TV (34.8% CTV to 34.4% Cable) in share of total viewing consumption among American TV households according to Nielsen. Broadcast TV, if anyone is watching, (pun intended) ranked at 21.6%. And who is behind this streaming boom? Is it those crazy teenagers that won’t get off my lawn? Nope. It’s Gen X and Baby Boomers! The Wall Street Journal reports viewers aged 50 to 64 accounted for the largest increase in streaming hours earlier this year, pulling in 39% of overall streaming on services like Netflix, Hulu and Disney+, according to Nielsen ratings numbers.
So, once I read this, I asked myself, how did CTV pull out the ‘W’? Well, overall streaming usage got a 3.2% bump over June, and the time spent streaming averaged almost 191 billion minutes per week. According to Nielsen, each of the 5 measurement weeks in July 2022 now account for 5 of the top 6 highest-volume streaming weeks on record. Netflix held the largest share of the streaming pie for overall viewing of streaming platforms at 8.0%, a record high for the service, which was seen as faltering just earlier this year. And in case you hadn’t heard, Netflix is launching an ad-supported offering with lower pricing ($6.99/mo), with a target of about 4 minutes of ads per hour at first. Now, before you can get the question in your head out, “What was on Netflix in Jul….” Stranger Things S4 Pt. 2. A pop-culture phenomenon event Gen X shared with Gen Z, which everyone was talking about all summer, from the cool-factor radio resurrection of Kate Bush’s song, ‘Running Up That Hill’, which made her the oldest artist ever to hit #1 on the Billboard Global Chart at 63 years old, to Metallica’s ‘Master of Puppets’ song getting newfound fame, to pizza take-out commercials and product/actor placement. 18 billion minutes consumed in July were in the streaming of Stranger Things on Netflix. This latest season was set in 1986, 36 years ago, when today’s 50 to 60-year-old watcher was 14 to 24 years old. See the dots connecting? It’s the power of nostalgia on full display. What ‘Happy Days’ was for our parents, ‘Stranger Things’ is for us Gen X’ers.
You likely won’t hear much about these numbers anywhere, and there’s a reason…CTV isn’t thought of as a new platform anymore. It’s just seen as the natural evolution of TV. But if I may go off script here for a moment; Cable TV has evolved itself over the years, and I think is partly responsible for this rise of CTV. Let me explain my rationale while pointing out an elephant in the room…When I watch a streaming platform that has commercial content (Paramount+, Peacock, Hulu, etc.), that content is 30 to 90 seconds long max, and in an hour, I see maybe 7 minutes of commercials, tops. There’s even a little countdown clock to show how long until the show returns. Now, on some basic cable channels (not all), which I also pay for, an around 2-hour prime-time Saturday Night movie shows in the TV program guide menu to last 3 hours, having up to 30%+/- of the viewing content over 3 hours being commercials. Streaming is spoiling people with cleaner, briefer commercial experiences, while some cable channels (not all) have been slower to adapt to diminishing viewer attention spans and pile on commercials in volume. There are reasons that advertisers are shifting a not-insignificant-portion of their Broadcast and Cable TV marketing budget dollars to CTV. They’re not totally abandoning Cable or Broadcast (and I wouldn’t recommend that either), but there is a significant shifting of funding.
The main driver for investing in Connected TV advertising is spend efficiency and a better ability to target consumers. And, if I may point out something their article didn’t, a more pristine advertising environment which can’t be skipped or fast-forwarded over, and where an advertiser’s commercial isn’t potentially the 8th :30 second spot airing in one commercial break. CTV also has content that allows for longer time-spent-viewing, aka ‘binge-watching’. A recent Hulu binge over a 5-hour period had me seeing the same movie trailer 9 times (good frequency, but still a bad movie choice for my tastes, sorry!). A 2021 Interactive Advertising Bureau (IAB) study found that 25% of advertisers say CTV is the most valuable media channel…and as the platforms continue to draw viewers away from Broadcast and Cable TV, that percentage is likely to balloon as well. I suspect Cable and CTV will be swapping the #1 spot back and forth for some time to come. I know I’ll be watching.
If CTV/OTT is something you want to get connected with, we here at CMOco can help guide and advise you on your next broadcast, cable and OTT campaign to be strategic and reach your target audience as efficiently and effectively as possible.
-Bruce Thiem, CMOco Director of Integrated Media