Audience Fragmentation Signals New Possibilities For TV Advertisers

Fragmentation has been looming for years. Rather than signal the demise of TV, however, it has created more opportunity.

This article is part of CMO.com’s September series on the state of media and entertainment. Click here for more.

Americans love their TVs. The average adult still watches about 4.5 hours a day of live programming—“live” being the operative word here. Even Millennials, who count YouTube as their preferred video provider, are glued to the television, with time spent watching traditional TV eclipsing digital video.

Many brands see this as a sign that television is still one of the biggest drivers of consumer behavior. They also see it as a sign that they should continue to spend on this legacy channel.

But gone are the days when we, as a viewing nation, mindlessly flipped through the dial in search of what to watch. With streaming services, there’s always something on. We can turn to Netflix for “13 Reasons Why,” hop over to Hulu for “The Handmaid’s Tale,” and set the DVR for a little “Scandal”—all while making sure to watch “The Voice” live on NBC, of course.

In other words, we’ve become channel-agnostics. The “where” no longer matters; it’s the “what” that now determines which carrier, service, or platform we use for our viewing pleasure.

This fragmentation has been looming for years. Rather than signal the demise of TV, however, it has created more opportunity. There are now options for focused, targetable, and identifiable viewers using set-top boxes, smart TVs, and other OTT data points that allow for the analysis of second-by-second viewing. Feed these behaviors into machine-learning models, and it’s no longer only about where viewers have been—it’s about where they’ll be in the future.

A Shift Back To TV

This precision has led many marketers to rethink how they allocate their media spending, if not their advertising budgets as a whole. Advertisers who increased their TV spending over the past three years—investing nearly 26% more in television—saw an average revenue growth of 14.6%. The returns were even better for CPG brands. For every new dollar spent on TV, they brought in an additional $4.68 in revenue. The opposite happened for those who began jumping ship, losing $3 in sales for every dollar cut from the TV budget.

Additionally, confidence in television attribution models has grown. Increased levels of trust and visibility have resulted in believable accountability and given clients more confidence and security to continue to expand their linear television budgets.

With dual-screen viewing on the rise, you can now track the full impact of an ad on consumer behavior. Thirty-seven percent of viewers use their smartphones to research a product online after viewing a commercial, and another 31% head to a product’s website after seeing an ad on television.

A Shift In Mindset

CMOs should look at fragmentation as an opportunity, rather than a negative strike against TV. This calls for a shift in your mindset to take advantage of the following opportunities:

1. Segmenting and reaching specific audiences: With more services and content available, there are more outlets to target your demographic. You segment consumers into smaller, more defined groups, allowing yourself to deliver more targeted messaging that resonates on a deeper level. You can now speak directly to your target audience members wherever they are in a tone and cadence that appeals to them. Television advertising no longer has to be one-size-fits-all.

2. Better focus for your media dollars: Whether consumers are watching live TV, DVR, or OTT options, data is being gathered. You can gain access to more than just audience size, household reach, and device usage, allowing you to see details segmented down to cable, satellite, and even cord-cutting households.

With more data available on your target audience, you can direct your spending to the correct carrier, service, or platform, enabling you to maximize your media spending. You can find your demographic, regardless of where they’re watching.

3. Participating in one-to-one advertising: The ability to address both individual households and exact individuals is “addressable media.” Be it an exact-match consumer or lookalike modeling, addressable advertising represents a promising one-to-one advertising outlet.

Rather than rely on the viewer to come across your ad, addressable advertising finds your desired viewer. With more data and resources available, you can target more qualified consumers, which will yield better conversions. Addressable ads are only served to the set-top boxes that match your selected criteria. The ad is served when the TV is on, and you’re only charged for the impressions that reach your target audience.

Fragmentation isn’t a bad thing; it’s an opportunity. You’re no longer left shouting into the void, hoping that the right person hears you and decides to listen. You now have a direct line to the people who matter most: your target audience.