The Impact of Streaming Services on Traditional TV Advertising

Jan 25, 2023
KLR Agency

In recent times, the emergence of streaming platforms has significantly altered how we watch TV. As streaming services gain traction, it is critical to comprehend the effect this transformation will have on the digital advertising sector. The increasing popularity of these platforms brings with it a need for addressable TV advertising—a new way to reach consumers that allows marketers greater control over who sees their ads than ever before. 

But what does this mean for those relying on traditional TV ad campaigns? 

How can one measure the effectiveness of addressable vs traditional ads in terms of reaching potential customers and maximizing ROI? 

In this KLR Agency blog post, we’ll explore these questions as well as strategies to make sure your business takes full advantage of both types of media when planning an effective campaign strategy.

Traditional TV Advertising

Television advertising is a widely used approach to marketing, utilizing television commercials for product or service promotion. 

TV advertising has been around since the 1940s and is still one of the most prevalent promotional strategies today. 

Television ads are typically 30-second spots, but can also be longer depending on the budget and desired reach. The cost of television advertising varies greatly based on factors such as time slot, channel, geographic area, and more.

A main issue with conventional TV ads is the expense when compared to other traditional advertising mediums such as radio or print. 

Additionally, gauging its effectiveness can be difficult due to the wide range of viewers it reaches and the many locations where it is seen. 

Finally, there is often limited control over who sees an ad when using traditional TV advertising because viewers may not watch every commercial in full or may fast forward through them entirely if they are recorded programs.

Streaming Services and Their Impact on Traditional TV Advertising

Streaming services are digital platforms that provide access to videos, television programs, and music. 

These platforms provide a wide selection of material for people to pick from and usually use subscription-based models. Popular streaming services include Netflix, Hulu, Amazon Prime Video, Apple TV+, Disney+, HBO Max, and more.

How Streaming Services Have Changed the Landscape of TV Advertising

The rise of streaming services has had a major impact on traditional television advertising. 

With a plethora of choices for viewers to enjoy their favorite shows or movies with no ads getting in the way, marketers have had to explore novel means of connecting with their intended audiences. 

This revolution in TV advertising has resulted in many companies migrating from traditional television ads to digital marketing approaches, such as the implementation of social media campaigns and targeted online advertisements.

Challenges with Streaming Services for Advertisers

One challenge that advertisers face when it comes to streaming services is the lack of control over where their ads appear within the platform’s interface. 

An ad could potentially be situated in a place where not many people will witness it, or when the majority of viewers are no longer engaged with the streaming service’s content. 

Additionally, streaming services typically require higher production costs than traditional television spots due to specialized formats like interactive video ads, which can be expensive and difficult to produce correctly.

Addressable TV Advertising

Addressable TV Advertising is a form of television advertising that allows advertisers to target specific audiences with tailored messages. 

In practice, this means that different people will see different ads, even if they are watching the same content. As an example, two people living in the same house could be watching the same show on the same streaming platform – each using their own account – and see different ads based on their preferences. 

This form of TV promotion has grown in prevalence as it can deliver more specific targeting than standard television ads, which are aired to the entire viewership regardless of their characteristics or preferences.

Additionally, addressable ads offer more flexibility when it comes to creative elements like length and format since they don’t have to adhere to the same restrictions as traditional spots.

Addressable advertising offers a considerable benefit in terms of ROI, as it allows for the delivery of personalized messages to potential customers who are likely interested in what is being offered. 

Moreover, addressable advertising campaigns typically require less effort and expenditure than conventional approaches; thus, they can generate higher returns at a reduced cost per acquisition (CPA).

Finally, because addressability enables marketers to track performance metrics like view-through rate (VTR) and click-through rate (CTR), they can quickly adjust strategies if needed to optimize campaigns for maximum effectiveness.

Measuring the Effectiveness of Addressable Ads vs Traditional Ads

Let’s measure the effectiveness of Addressable Ads vs Traditional Ads:

Overview of Measurement Techniques for Both Types of Ads

Traditional TV advertising is measured by Nielsen ratings, which measure viewership in terms of reach and frequency. Reach measures how many people have seen an ad, while frequency measures how often they’ve seen it. 

Streaming services are measured using different metrics such as impressions, clicks, views, and conversions. 

Impressions count the times an ad has been seen; clicks quantify how often a user interacted with it; views track the duration of exposure to an ad; and conversions monitor when a user does something following seeing or clicking on an advertisement.

Comparing the Effectiveness of Addressable vs Traditional Ads

Addressable TV ads are more targeted than traditional ads because they can be tailored to specific audiences based on demographics such as age or gender, as well as interests or behaviors. 

This allows advertisers to target their message more effectively and potentially increase ROI (return on investment). 

Nevertheless, addressable ads necessitate a greater accumulation of data than customary commercials do to pinpoint who should get them; this implies that there may be extra costs associated with this type of advertising. 

Additionally, addressable TV campaigns typically require longer lead times due to the need for audience segmentation before launch, so it is important for advertisers to plan if they want to take advantage of this type of advertising opportunity.

FAQs about Traditional TV Advertising and the Rise of Addressable Tv Advertising

At KLR Agency, we want to make sure you are as informed as possible. To achieve that, we answered some of the most common questions about this topic:

What is addressable TV advertising?

It works by using data-driven technology to identify the characteristics of individual households and deliver ads based on those criteria. 

This type of advertising has gained traction due to its potential for more pinpoint targeting, better tracking, and a higher return on investment compared with classic broadcast television campaigns. 

By leveraging addressable TV, marketers can reach their desired audiences more effectively while also optimizing their budget allocations.

What is the difference between addressable and connected TV?

The main difference between addressable and connected TV is that addressable TV allows advertisers to target specific households while CTV provides access to a wide variety of content from multiple sources on one platform.

What are the benefits of streaming TV advertising?

Streaming TV advertising offers several benefits for businesses. 

Firstly, it allows for greater reach and frequency than traditional television ads, as streaming services are available on multiple devices and platforms. 

Secondly, streaming TV ads provide a more exact method of targeting audiences than broadcast television commercials due to the data that can be gleaned from streaming services. 

Thirdly, streaming TV advertising is a cost-efficient way of getting your message out there as it requires fewer resources in terms of production and time. 

What is the impact of TV advertising?

TV advertising can have a significant impact on viewers. It has the power to shape opinions, create brand awareness, and influence buying decisions. 

Through creative visuals and persuasive messaging, TV ads can effectively reach large audiences. They also provide companies with the opportunity to target specific demographics or interests by tailoring their messages accordingly. 

Ultimately, TV advertising is a potent mechanism for businesses desiring to have an effect on their consumers and boost sales.

KLR Agency’s Final Thoughts

The impact of streaming services on traditional TV advertising and the rise of addressable TV advertising is undeniable. 

While it may seem daunting to navigate this new landscape, some strategies can be employed to maximize reach and ROI with both addressable and traditional ads.

By understanding the nuances between these two types of advertising, businesses can ensure they are making informed decisions about their marketing strategy to achieve maximum success.