Viewers Are Cutting Cable In Favor Of Streaming, And Marketers Need To Keep Up!

February 6, 2023
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    As consumers choose to watch more streamed TV and more Americans cut the cord on cable, it’s about time marketers made the switch, too–in their advertising budgets. 

    People gradually switching to CTV

    Though linear TV still makes up the majority of viewers watching, CTV is increasingly grabbing a bigger piece of the pie. In fact, in July of last year, streaming’s share of total TV watching time (34.8%) was larger than both broadcast (21.6%) and cable (34.4%) for the first time ever.

    It’s predicted that CTV will continue to eat into linear TV watching and overtake it in the next three to five years, grabbing over half of TV watching time. Almost 85 percent of households in the US are enabled with CTV already, with Smart TVs becoming cheaper and streaming catalogs becoming more robust.

    And what’s happening to linear TV? Almost 7 million Americans cut the cord on cable in 2020 alone–and it’s been following a growing trend. By this year, more houses will have non-pay TV versus traditional pay TV.

    Not only that, but viewers are spending more time with ad-supported subscription models. Netflix’s ad-supported tier generated the company’s promising returns in 2022, and Disney Plus, too, added an ad-supported tier this past December. And more streaming services are trying out a free ad-supported tier (FAST), with Netflix itself pondering the idea.

    But let’s not forget that consumer TV habits can be complex. Some households have completely cut the cord on cable and have streaming only, while some maintain both cable and OTT. And within the realm of subscription services, viewers might watch a mix of ad-supported and subscription streaming services. So you need to adjust your media planning to fit–which means not only shifting some budgeting from linear to CTV, but considering how to use that budget most effectively.

    Why switch budgets from linear to CTV?

    Let’s say you’re weighing the pros and cons of shifting some of your budgets from linear to OTT targeting. After all, linear ads are less expensive than CTV, and despite the predicted growth, more people still watch linear than CTV currently. But CTV has some of its own pros over linear regardless of how many people are watching. 

    Better measurement and data insight

    Linear TV reporting can be slow and frustrating. With CTV, however, you can get real-time reporting and get granular metrics.

    Better frequency

    It’s every marketer’s nightmare. Seeing your own ad running multiple times in a pod. Pod. After. Pod. While linear TV doesn’t give you control over this, controlled frequency is a possibility with CTV.

    Better targeting

    CTV allows you to use targeting segments to best reach your desired audiences.

    Better scale

    CTV advertising will let you reach those audiences you want to reach–no wasted impressions, and no wasted budget.

    How budgets are changing

    As a marketer, what should you do? Marketers are being more conscious about their budget spending because of tougher economic conditions–though linear advertising is seeing the sharpest decrease in advertising dollars, while CTV budgeting is increasing.

    So though you should shift budgets from linear to CTV, don’t just throw money at it. Many companies are jumping on the bandwagon without deep expertise–it pays to work with somebody who knows what they’re doing, like Stirista.

    Figure out how to do CTV ads most profitably with a company that knows what they’re doing. Stirista can help you with all aspects of your CTV and OTT advertising campaign, even as part of an omnichannel approach.