Google’s Optimized Targeting Feature: Advertiser Q&A

Google’s Optimized Targeting Feature: Advertiser Q&A

Google

Managers of Google Ads accounts were surprised recently when Google began to gradually roll out a new feature, optimized targeting, apparently with little fanfare. It’s important that Google Ads users understand what’s going on with optimized targeting. The new feature may provide benefits but also higher costs for performance marketers. Let’s take a closer look.

What Is Optimized Targeting?

According to Google, optimized targeting helps businesses using Google Ads to reach new and relevant audiences who are likely to convert. Optimized targeting looks beyond manually selected audience segments in a campaign in order to find audience segments that an advertiser might have missed. The overall goal of optimized targeting is to improve the campaign’s performance.

When Should a Business Use Optimized Targeting?

Per Google, optimized targeting works best when a business wants to expand an audience segment most likely to convert, acquire new customers (beyond existing segments), identify new audiences who will perform well for an existing campaign, and increase conversions without increasing bids or the cost per customer. A recent Search Engine Land article notes that optimized targeting is beneficial if an advertiser is not sure who their audience is.

What’s the Difference Between Optimized Targeting and Audience Expansion?

Many advertisers already use the Google Ads audience expansion feature to expand an audience segment. Audience expansion does so based on an advertiser’s manually selected audience segments. Optimized targeting uses real-time conversion data to find more users who are more likely to convert.

Google cites the hypothetical example of a business that wants to attract people to the upcoming launch of a new running shoe. The business targets people using two audience types: a custom segment based on top performing keywords from their search campaigns (e.g., “running shoe sale”), and the “athletic footwear” in-market segment. Audience expansion and optimized targeting may handle the company’s campaign as follows:

  • Audience expansion: in addition to the business’s manually selected audience segments, audience expansion includes similar segments such as the “trainers sale” custom segment and the “sporting goods” in-market segment.
  • Optimized targeting: optimized targeting expands to users who are likely to convert by creating a profile of what a converter looks like based on real-time conversion data. For example, that data could include Google searches for specific running shoe brands or clicks to a popular sportswear website. While advertisers’ manually selected audience segments provide a starting point, optimized targeting looks for conversions outside of their selected segments.

According to Google, Discovery and Video campaigns that use audience expansion will transition to optimized targeting.

How Do I Get Started Using Optimized Targeting?

If you manage a Google Ads account, Google already got the ball rolling for you by enabling optimized targeting for all campaigns automatically. And you might encounter an initial fluctuation in your Google Ads costs as a result. Per Search Engine Land, “This could potentially be an expensive option if your budget is lower as your initial conversion quality could fluctuate as the data is collected and optimized targeting figures things out.”

What if you don’t want Google to automatically enable optimized targeting? To disable it, you need to change your ad group settings. If an ad agency manages your account for you, ask them how they are managing this feature and the impact on your budget. At True Interactive, we’re keeping a close eye on this new feature and protecting our clients’ budgets.

Our advice to advertisers who use Google Ads:

  • Watch your account closely. As Search Engine Land reported, managers of Google Ads accounts began to notice the roll-out of optimized targeting through a new “Signal” indicator that appeared in their Google Ads account.
  • Watch your budget closely. As noted, the automatic roll-out of optimized targeting could create an increase in costs.
  • Work closely with your ad agency partner to understand what’s happening and why. If you work with Google directly, reach out to your Google rep and ask for clarity about any future product changes in store.

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here, and learn about our services here.

Why Advertisers Love Baby Boomers

Why Advertisers Love Baby Boomers

Advertising

Baby Boomers are hot! While Millennials and Gen Z continue to capture love from marketers, brands are also reaching out to the Boomer audience. This post will take a closer look at why:

Baby Boomers Defined

Baby Boomers are the generation sandwiched between the so-called Silent Generation and Generation X. Roughly defined as the cohort born from 1946 to 1964 during the post-World War II baby boom, Boomers were shaped by post-WW II optimism, the cold war, and the seismic changes wrought by 1960s counterculture.

Boomers make up a large segment of the U.S. population. In fact, they are right behind Millennials in terms of size; according to 2019 stats published by Statista Research Department early this year, just under 70 million Baby Boomers live in the United States, compared to about 72 million Millennials. Furthermore, as Forbes points out, the Baby Boomer generation, at 40 percent market share, make up the largest piece of the consumer pie.

And they’ve got money to spend.

Why Boomers Matter to Brands

Craig Millon, the chief client officer of IPG’s Jack Morton Worldwide, reminds brands that while younger generations are a worthy target audience, the importance of Boomers should not be underestimated.

“A lot of people spent an insane amount of time focused on Millennials,” Millon says. “Boomers are an incredibly good, loyal, and wealthy segment of our population that probably do not get as much attention as they used to.”

And yet the Baby Boomer generation continues to manifest the values that have characterized them all along: this cohort is defined by a tendency to be hard workers who have spent wisely and saved. Many are still working full- or part-time, which means that their choices continue to have a powerful impact on the economy. In fact, Boomers “make up the only population group experiencing growth in the workforce.” As a relatively health-conscious generation, Baby Boomers are also poised to take advantage of advanced medical technology to live healthier and longer. As Forbes has noted, “Unlike their parents, who desired to relax during retirement, the baby boomer generation wants to get out and do all the things they’ve always dreamed of doing.”

How does this manifest in a world moving beyond pandemic-era lockdowns? The headline is this: Boomers are motivated to spend. Business Insider describes a generation that’s been vaccinated, is resuming travel, and with no young children at home, is eager to spend the money they saved during the past year. Research from ad EGC Group shows that Boomers are increasing their spend levels by 10-to-15 percent in 2021. And brands from Mercedes-Benz to candles maker Glasshouse Fragrances are taking note, increasing their outreach to this group by 30 to 40 percent.

Of course some advertisers might still be reluctant to divert precious resources to the Boomer cohort. Their logic — that resources need to go to reaching younger generations — is not uncommon. And yet marketing to Boomers can be a win/win. Baby Boomers not only have the spending power, they also stand to share their brand experiences with children and grandchildren.

“Give the boomer a reason to love your brand,” Steven Seghers, CEO of Hooray Agency, says. “The boomer generation brings other generations with them.”

Tips for Marketing to Baby Boomers

 How does a brand connect with the Baby Boomer audience? Some recommendations:

  • While Boomers are more tech-savvy than they are sometimes given credit for, make sure that your digital outreach addresses Boomer needs. Many Boomers wear glasses and have a harder time reading small text, for example. On your website, pay attention to font size, visual contrast, and button sizes, all of which an inform the usability of your site.
  • Finally, don’t jettison phone support options. Live chat is a popular support tool for Gen X, Millennials, and Gen Z , but many Boomers still prefer interactions where they can express themselves verbally — and go hear another human voice. Prominently displaying a phone number on your site (and including a link that can easily work on mobile so that users can make their call with one click) speaks volumes about your dedication to an easy, reliable consumer experience.

Contact True Interactive

Interested in making inroads with the powerful Boomer demographic? Contact us. We can help.

Photo by Marcus Aurelius from Pexels

Why and How Instagram Is Leaning into Video

Why and How Instagram Is Leaning into Video

Instagram Social media

Instagram isn’t just about the photos anymore. As reported in The Verge, the social networking service is embracing entertainment and video in a bid to stay competitive with platforms like TikTok and YouTube. This isn’t the first time Instagram has gone head-to-head with TikTok: as we’ve blogged, Instagram launched Reels last August as a means of connecting with TikTok’s Gen Z audience. What do these new changes mean? Read on to learn more.

Not Just For Square . . . Photos

In a video posted on his Twitter and Instagram accounts, Instagram head Adam Mosseri explained that the platform no longer wants to be identified as a “square photo-sharing app,” rather as a hip general entertainment app driven by video — and algorithms. Mosseri says focus is on four key areas:

  • Creators, where Insta’s recognition of “the shift in power from institutions to individuals across industries” underlines Instagram’s desire to empower its creators.
  • Video, which is, as far as Mosseri is concerned, where it’s at. As he notes, “Video is driving an immense amount of growth online for all the major platforms right now.” His message: Instagram users have spoken. They want to be entertained. To stay relevant, Instagram is making video a tentpole of its offerings. Mosseri promises changes along the lines of users getting full-screen, recommended videos in their feeds, including videos from accounts a user may not already follow.
  • Shopping, to reflect the leap commerce has made from offline to online, a change accelerated by the pandemic.
  • Messaging, to honor the way close friends keep connected now — not by Feed and Stories, as has been the case in the past.

Reactions So Far

Reactions to Mosseri’s announcement have been mixed. Journalists are saying Instagram is responding to the rise of TikTok and YouTube, but as noted in Axios, warn that “[a]s social networks continue growing, they run the risk of overwhelming consumers and losing what made them special and distinct to begin with.”

And while Mosseri specifically names creators as a priority in his video, some creators, specifically photographers, are feeling marginalized and voting with their feet: Digital Photography Review reports that some photographers are defecting to Twitter in order to share their work in a space they feel is more dedicated to their art. Photographer Bryan Minear is a case in point. “In my eyes, Instagram stopped caring about artists and independent creators a long time ago,” he says. Minear, who switched to Twitter as his primary social media outlet in 2019, has found a vibrant photography community there.

Although Mosseri later tried to retract some of his wording — “We’re no longer a photo-sharing app or a square photo-sharing app” drew particular ire — his initial statement has aggravated photographers who feel an algorithm championing entertainment doesn’t put a premium on quality. “Instagram has done nothing but promote video-centric features at the expense of still photographers,” Minear says. “They’ve made it loud and clear that we aren’t welcome anymore.”

What Advertisers Should Do

What does all this mean for your brand? Is this “new” Instagram a good fit? We recommend that you:

  • Re-examine how you use video in your marketing and advertising. Clearly, video is getting bigger: 86 percent of businesses use video as a marketing tool, and 93 percent of marketers who use video say that it’s an important part of their marketing strategy. Instagram is showing where its allegiance lies. If video makes sense for you, Instagram might just be a viable advertising platform for you.
  • Consider the different ways influencers on Instagram are using both video and imagery as you find influencers to partner with. Who does a great job with video? Are they the right fit for your brand?

Contact True Interactive

In short, video is hot. Trying to figure out how to embracing video in your online advertising and marketing? Contact us. We can help.

How Snapchat Keeps Innovating with Augmented Reality

How Snapchat Keeps Innovating with Augmented Reality

Social media

As we’ve blogged, Snapchat has been demonstrating a profound appetite for investing in augmented reality (AR). It could even be argued that Snapchat is the most AR-driven platform out there, continuing to reimagine what AR experiences might be on mobile and beyond. Let’s take a look at how Snapchat is leading the pack when it comes to AR innovation.

AR: the “Ace in the Hole”

AR is such an area of strength that it might be considered Snapchat’s “Ace in the Hole.” As Medium observes, “One of the reasons that Snapchat is able to carve out its own niche in the increasingly combative social media arena is its singular focus on AR-powered visual communication, which differentiates Snapchat from its competitors.”

Snapchat Data

Recent Developments with AR at Snapchat

That’s a message Snapchat has energetically promoted, and underlined with a commitment to new AR features. Consider the following additions:

  • The Connected Lens allows two Snapchat users to share an interactive AR experience, whether they are sitting side-by-side in the same room or located miles apart from one another (in a demo, Snapchat partnered with Lego to show how two people can build a virtual Lego set together using the AR lens). In a post-pandemic world where social interaction has become a sort of Holy Grail, AR facilitates connection. And that makes AR more relevant than ever right now.
  • Snapchat has also worked to improve Scan, its built-in visual search tool. Scan, which helps users ID everything from songs to car models, now has a new feature, Screenshop, which recommends clothing purchases based on photos of outfits.
  • Snapchat also hasn’t forgotten the importance of sometimes . . . just having fun. The Cartoon 3D Style by Snapchat lens scans your face and then imposes upon it a 3D cartoon look — as if the user has just stepped out of a Pixar film. The lens uses AR technology, and results are impressively realistic.

Calling All Creators

Snapchat isn’t just expanding its AR features willy nilly; its investment in AR is informed by the desire to grow a vigorous creator community. It does this by giving creators useful tools—and the possibility of rewards.

Consider the standalone iOS app, Story Studio, which provides a suite of vertical video editing tools. Or the new Gifting feature, which attracts creators with the promise of monetization. Gifting gives users a way to tip their favorite Snap creators. Also new: a Creator Marketplace, which allows businesses to locate and pair up with Snapchat creators. 

AR Platform for Brands

So, are businesses spiking an interest? There’s certainly reason to: according to Medium, Snap has said its users “are two times more likely to make purchases if they have interacted with a product via AR lens than not.” That’s a powerful incentive for brands.

 

Snapchat data

Some, like Estée Lauder, have already risen to the challenge. According to Medium, the cosmetics giant has been recognized as “one of the first companies to integrate their product catalog through Snapchat’s API, which makes it easy to create and publish new Dynamic Shopping Lenses that include price, availability, and a path to purchase.” Other brands that have successfully employed AR try-ons and shoppable lenses include Gucci, American Eagle, and the eyewear brand Clearly.

What Should Advertisers Do?

Could your brand likewise benefit from a partnership with Snapchat — and an exploration of AR? Ask yourself the following:

  • Might AR provide some fresh opportunities for your advertising? If so, Snapchat is an excellent platform to try it on.
  • What do you know about AR? According to Threekit, a tiny one percent of retailers are currently using AR or virtual reality in their customer buying experience. And yet a whopping 61 percent of consumers indicate that they prefer retailers that incorporate AR experiences. Does it make sense for your brand to get in on the ground floor?
  • Finally, are you hoping to reach the Millennial and Gen Z audiences? The Threekit stats also note that 70 percent of consumers aged 16 to 44 are at least aware of AR. Snapchat — and AR — can be a meaningful way to reach this group.

Contact True Interactive

 AR can be a powerful go-to in a brand’s toolkit. Contact us to learn more. We can help.

How Twitch Is Appealing to Advertisers

How Twitch Is Appealing to Advertisers

Advertising Gaming

Twitch, the popular streaming site owned by Amazon, is expanding marketing partnership opportunities beyond its competitive esports channel, Twitch Rivals. The gaming platform’s new Official Marketing Partner program creates branding opportunities for /twitchgaming, a Twitch channel dedicated to non-competitive gaming. Already Chipotle and Ally Financial have signed up. Does it make sense for your brand to join the party? Read on.

How Twitch Has Grown during the Pandemic — and Who Likes Twitch

Twitch has definitely enjoyed a growth spurt. The platform exploded in popularity during the pandemic, as gaming and streaming became reliable sources of entertainment in a world locked down against the virus. According to Ad Age, “Twitch has nearly doubled its daily visitors and minutes watched since the pandemic began.” That translates into an average of 30 million visitors daily — up from 17.5 million in 2020. This growth is good news for brands who want exposure. In January alone, according to Modern Retail, Twitch users devoured more than two billion hours of content.

Who are these viewers? Ad Age reports that almost half of Twitch users are 18 to 34 years old; 21 percent fall into the 13-to-17-year-old demographic. That’s a big piece of the Gen Z/Millennial pie. Lou Garate, the head of global sponsorship sales at Twitch, also notes that Twitch followers tend to be online loyalists who seek nearly all their entertainment online, making them hard to reach via more traditional advertising channels.

Twitch Expands Marketing Opportunities

Given the elusive nature of that demographic, perhaps it was inevitable that Twitch would grow as a branding destination. At first, only brands with a clearly defined tie to gaming tested the waters: headphone companies like Hyper X, for example, and energy drink brands like Red Bull and Monster tested out promotion with campaigns that proved popular. Doritos also was in this vanguard, in 2018 sponsoring a Twitch competition called the Doritos Bowl.

But while headphones and snacks make perfect sense when it comes to partnering with a gaming platform, brands in other arenas are starting to explore how they might connect with Twitch users. Understanding that Twitch actually supports an increasingly diverse array of niche communities has been key. Chess, for example, is popular on the platform. So is anime.

As a result, any number of brands are starting to think about partnering with Twitch. Consider Lexus, which in January recruited the Twitch community to create a custom version of its 2021 IS sedan. Twitch streamer Fuslie hosted a livestream in which viewers could vote on modifications to the car, including gaming consoles and car wrap; more than half a million viewers showed up. A second livestream on February 17 disclosed the car’s design.

Brands like Chipotle have certainly seemed to do their homework in order to find a home on Twitch. According to a 60,000-person user panel called the Twitch Research Power Group, a whopping 97 percent of Twitch users eat at quick service restaurants — 57 percent of them on a weekly basis. In addition, arbiters like McKinsey & Company have identified Gen Z (a significant percentage of the Twitch audience, as noted above) as the “True Gen,” a generation dedicated to, among other things, ethical concerns. Chipotle speaks to these factors in a Twitch campaign that reaches out to Gen Z in particular in a meaningful way. As Ad Age reports, Chipotle will in coming months sponsor custom segments in /twitchgaming show The Weekly, including a “Chipotle Build Your Own PC” segment in which guests build their own PCs —much as customers build custom burritos at Chipotle. After the segment, Twitch and Chipotle will give the equipment to a nonprofit.

Twitch’s expanded Marketing Partners Program

Let’s take a closer look at the new Official Marketing Partner program. The Chipotle campaign is part of this effort, which essentially has meant Twitch opening up sponsorship opportunities on its /twitchgaming channel. “With the launch of this new Official Marketing Partner program, we’re taking a unique approach in sponsoring non-competitive content, to reach a new audience of elusive gaming enthusiasts on /twitchgaming,” Garate explains. The new program demonstrates Twitch’s desire to work with brands and connect them with gamers across the platform — not just those interested in Twitch Rivals’ esports content.

What Brands Should Do

 Interested in exploring opportunities to partner with Twitch? We recommend the following:

  • Understand your audience. As noted above, the demographic skews young, and they don’t necessarily respond to traditional advertising. Take a page from Chipotle’s book and get to know the Twitch audience — and how to speak their language.
  • Understand the nuances of Twitch. As Jamin Warren, the founder of the gaming-focused consultancy Twofivesix, notes, “Of all the platforms that we look at, Twitch is really one of the most interesting, and it’s the most complicated as well.” One reason? Part of Twitch’s draw stems directly from the appeal of its streamers. Brands launching channels must find authentic, identifiable streamers to run their accounts. Otherwise, they may find themselves speaking into the void.

Brands also need to get comfortable with the nature of this beast: livestreams are by definition hard to script, and the best content tends to be spontaneous. Maintaining that spontaneity while keeping things from going off the rails can be an art — and one that brands need to learn in order to thrive on Twitch.

Contact True Interactive

Does it make sense for your brand to reach out to the Twitch audience? Contact us. We can advise.

Three Business Lessons Learned from the COVID-19 Pandemic

Three Business Lessons Learned from the COVID-19 Pandemic

Advertising

One year ago, could you have predicted that our economy would come roaring back and that more than half of the U.S. adult population would be vaccinated against COVID-19? I sure didn’t.  As we approach the midyear point in 2021, I am grateful for family, friends, co-workers, and our clients at a time when many people have suffered loss. This is also a humbling time. In 2020, many business owners were facing uncertain futures. It was not easy to understand what was around the corner, and sometimes we were flat-out wrong when we attempted to look ahead. With the benefit of hindsight, we can now say we’ve learned some things. I have shared below some of my own lessons learned based on my experiences at True Interactive:

1 Conventional Wisdom Is Flawed

Conventional wisdom says that during uncertain times, people save more and live cautiously. And during the pandemic, people did save. But they also spent. (And invested — the stock market soared.) Consumers spent in ways that make sense in hindsight, but not necessarily so at time. For example, consider the surge in spending on home maintenance and groceries as people in lockdown focused on home repair projects and learning how to cook. Or think of the surge in short-term travel. Americans could not board airplanes and go to far-flung places (especially big cities), but they did take shorter trips to smaller towns and parks. That’s a reason why Airbnb saw a big turnaround in its business later in 2020 after suffering a downturn initially. Businesses that allowed conventional wisdom to dictate their decisions were in for a surprise.

2 Predicting Future Behavior Can Be Dangerous

There was no blueprint for predicting how people would behave and how businesses would make decisions during a global pandemic. When a national emergency was declared on March 13, 2020, in the United States, agencies such as True Interactive could have been forgiven for predicting hard times ahead. After all, during uncertain and difficult times, businesses often scale back their advertising and marketing budgets. But that didn’t happen to us, thank goodness. I could not have predicted that our digital media clients would experience a spike in demand – not once, but many times in 2020. I could not have predicted that one of our clients, a photo-sharing app, would benefit from people living in lockdown and spending more time at home working on craft projects. And certainly the predictions of economists were not useful. The pandemic required businesses to think differently. To be flexible and agile – relying less on long-term predicting and more on agile planning, meaning that we constantly examined our performance, keeping an open mind to revising our plans from one month to the next.

3 Real-Time Analytics Rule

I mentioned that we needed to be more agile in our thinking. We could do that because we relied on real-time analytics — data such as clients’ conversions and website traffic that told us just how well they were performing. As I mentioned, our digital media clients saw spikes in demand. Fortunately, they were watching their numbers in real time just as we were watching their digital ad performance in real time. The analytics did not lie: those clients were doing just fine during the pandemic. Not everyone was, though, as anyone in the travel and tourism industry can attest. The reality of 2020 is that each industry was affected differently, and even inside industries, businesses were affected in different ways. Many retailers suffered greatly, but others prospered because they benefitted from services such as curbside pickup. The truth was in the real-time numbers. Anyone who relied on historic data was at a disadvantage.

Real-time analytics are serving us well now. We know that travel and tourism is back – not because of what we read in the news, but what our client data says.

Onward in 2021

At True Interactive, we continue to grow thanks to great clients and an incredibly talented and committed team. And we will continue to learn – together. In real time. What are your lessons learned?

Photo by Tim Mossholder on Unsplash

Why Streaming Companies Are Embracing Ads

Why Streaming Companies Are Embracing Ads

Advertising

Amazon got all the headlines with the news of its $8.45 billion acquisition of MGM on May 26. But days earlier, HBO Max made an announcement with equally big ramifications for streaming companies and advertisers: the launched of a tiered version in which consumers will pay less for a subscription that includes advertising. The news raised eyebrows. After all, HBO has essentially been known as something of a “walled-off garden”: freedom from advertising has been practically a calling card for the television network since its origination. The new offering is the latest example of a streaming company introducing ads — and a sign that HBO is paying attention to trends and consumer behavior. Let’s take a closer look at the news.

Ad-Supported Streaming Is Gaining Ground

HBO is clearly aware of a shift to more ad-supported services in the streaming realm. And as noted by CNBC, Nielsen data supports the uptick: “In January 2021, 34% of U.S. households that had video streaming capability used ad-supported streaming services, up 6 percentage points from January 2020 . . . That applies both to ad-supported on-demand video platforms and linear streaming.”

The advent of ad-supported services is just the latest chapter in the so-called streaming wars, which have been raging over the last year and a half as media and tech giants rolled out their versions of competitors to Netflix and Amazon Prime. Ad-supported tiers have become part of that contest, as streamers gauge what balance of ads consumers will tolerate — for a lesser fee.

HBO Max’s bid to navigate that balance is HBO Max With Ads, which at $10 a month represents a $5 discount to HBO Max’s ad-free subscription. Even with the discount, HBO Max is still one of the pricier alternatives out there. As CNET observes, “HBO Max’s $15-a-month ad-free pricing goes up against Disney Plus at $8 and Netflix’s cheapest plan at $9. Even among the services with discounted advertising-supported tiers, Hulu and Paramount Plus both charge only $6.”

But Julian Franco, vice president of product management at HBO Max, is confident that consumers will appreciate the dynamic their ad-supported platform creates (if at a higher price point): in Franco’s estimation, viewers won’t be bothered by the ads at all.

In some cases, that’s because even on HBO Max with Ads, there may not always be any. Franco explained that the amount of video advertising one sees — that is, the ad load — may vary depending on what one watches. Programs licensed to HBO Max, like Big Bang Theory, will have ad breaks. But programs that originated on HBO’s regular network won’t feature bumpers or spots during playback. Bottom line: HBO Max estimates that typical ad load for an ad-supported subscriber will clock in at just under four minutes per hour. If this projection holds true, HBO Max will be honoring its vow that it will have the lightest ad load in the streaming industry (NBCUniversal’s Peacock currently holds that crown, with an ad load of five minutes per hour).

Why Are Streaming Companies Introducing Ad-Supported Options?

In part, it all goes back to the streaming wars referenced earlier. More people are online watching content, a phenomenon that really picked up during the online surge of 2020. Streaming companies are competing for those eyeballs — and trying to entice viewers by offering ways those consumers can pay less.

Another factor: it costs a lot of money to operate a streaming service, whether you are producing original shows and movies (like Amazon’s new Lord of the Ring series) or buying rights to someone else’s content. Ads help defray those costs.

What’s Next: A Prediction

Will more streaming companies adopt advertising? Possibly so. But Netflix may not be able to pull it off. Netflix is spending billions to create new content, and the company has gradually increased subscription prices to recoup some of the costs. Netflix does not dare introduce advertising to its 200 million subscribers who are already paying a premium. But offering a lower-priced subscription with advertising may not attract enough subscribers at a time when its customer base is plateauing. I predict that Netflix will be sold to Apple. That’s because Apple has deep pockets and is eager to achieve brand cachet, which it lacks right now.  But Netflix has plenty of brand cachet. I could see Apple buying Netflix but allowing the company to keep its own name. Time will tell. But the day is coming.

What Advertisers Should Do

How should brands respond in this evolving environment? We suggest:

  • Consider the different options available. According to CNET, HBO Max intends to embrace some unconventional ad formats, including “pause ads,” which come up only after viewers have paused playback for at least 10 seconds, or a “branded discovery” option that places a sponsor’s banner at the top of a page of recommendations. Think about what format best serves your brand.
  • Use analytics to monitor the reaction to ads. The industry is still learning how receptive people will be to ads — and if different approaches, such as HBO’s effort to provide a more “high end” ad experience, engender a more positive response.

Contact True Interactive

Eager to learn more about this new world of advertising in the streaming world? Contact us. We can help.