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With the advent of streaming, advertising on entertainment channels has become more affordable and more accessible than ever. Media consumption in recent years has dramatically shifted away from conventional channels like cable and AM/FM radio towards paid streaming providers for both television and audio. In turn, businesses big and small have a lot of options when it comes to reaching consumers in more targeted and cost-effective ways.
Although many of us can remember purchasing CDs from electronic stores or gathering in front of the TV in anticipation of a show’s newest episode, younger generations have grown up with the luxury of having all of the latest music easily accessible through their mobile devices and entire seasons of their favorite shows ready to stream off of internet-connected TVs. Of course, the use of streaming platforms is hardly restricted to any single age demographic, as over 70% of all consumers believe streaming subscriptions offer better services than the traditional alternative (Deloitte). Moreover, over a quarter of consumers no longer use any cable provider while 56% of those who do only do so because it is included with their internet plan (Deloitte).
The era of streaming is happening now, and prospective advertisers have a wealth of choices in platforms with remarkably affordable rates. Before getting into why you should advertise on streaming, however, it is important to first understand what streaming audio & TV is:
Digital or “streaming” audio simply refers to the streaming of audio files over the internet. Its most popular forms include music, radio, and podcasts. Notably, unlike downloaded content that stores an entire audio file (like an MP3) onto your device, streaming audio delivers the data continuously in small packets as the audio plays, or “streams.” So long as your device has a stable and strong enough internet connection, the packets will keep flowing in and you will experience uninterrupted listening without any frustrating buffering.
Currently, the top music streaming platforms in the US are, in order:
– Apple Music
– Amazon Music
Unfortunately for advertisers, Apple Music is 100% ad-free. However, while Spotify, Amazon Music, and SoundCloud all offer premium, ad-free subscriptions, the free versions of their product do allow for ads. Additionally, YouTube Music is an emerging music streaming platform that aims to compete with Apple Music and Spotify. At the end of this year, Google, YouTube’s parent company, will be shutting down Google Play Music and merging it with YouTube Music, meaning that YouTube music stands to gain an influx of users. Like every major music streaming service other than Apple Music, YouTube Music also offers a premium, ad-free subscription alongside a free version that does contain advertisements. However, it is important to note that the free versions of YouTube Music and Amazon Music are only available for the Google Home speaker and Amazon Echo smartspeaker, respectively.
Radio streaming is another booming industry with tens of millions of active users. Here, the major providers (in order) offering slightly different services are:
Pandora creates curated “stations” for users based on their listening preferences and is more akin to other music streaming platforms in that it offers a free version with ads and a premium version without ads. In contrast, iHeartRadio is completely free and offers users custom stations similar to that of Pandora in addition to access to over a thousand real radio stations worldwide. Importantly, all of the real radio station access comes with advertisements.
Finally, podcasts are another fast-growing sector of audio streaming. The big 3 providers are:
For these brands, the same advertising rules apply as they do for their music streaming services. Apple Podcasts is ad-free, Spotify is free with ads and ad-free with premium, and Google Podcasts is entirely free with ads. To note, although Google Play Music is merging with YouTube Music, Google Podcasts will remain as its own platform. In addition, you can advertise on podcasts directly where the host will take some time to promote your business, products, or services to his or her listeners. Because a whopping 80% of podcast listeners regularly listen to the entire episode (one of the highest engagement rates for any medium), advertising on podcasts is reliably rewarding.
Within the next two years, more than 55% of Americans will have ditched the cable box and signed up for a streaming service. But what does it mean to “cut the cord” ? Unlike cable or satellite television that requires coax cables and satellite dishes, respectively, internet, over-the-top (OTT), or “streaming” television naturally requires a device capable of being connected to the internet. This could be a smart TV, gaming console, or other connected TV device (more on that later). Streaming TV works functionally like streaming audio in that your device is continuously receiving data packets as you watch. Again, the stronger the internet connection, the less likely you are to encounter buffering.
Streaming television can be categorized as either “on demand” or “live TV.” On demand streaming gives users anytime access to expansive libraries of TV shows and movies. The major providers, in order, are:
Of the big four, however, Hulu is the only platform that offers a lower-tiered subscription containing ads.
Conversely, live TV streaming is rife with advertising opportunities. Live TV streaming is exactly as it sounds, allowing users viewership of live television stations via an internet connection as opposed to the traditional models of cable or satellite. The biggest live TV streaming providers in order are:
In addition, sports-focused live tv streaming platforms such as Fubo TV and ESPN+ are rapidly growing as well. Hulu + Live TV is especially popular with consumers because it can be bundled with both Disney+ and ESPN+, which along with Hulu are owned by the parent company of Disney. Moreover, while Hulu + Live TV offers a premium, ad-free subscription, its most subscribed-to package does contain ads. Notably, all of these platforms have ads. Although live TV streaming connects users to the same television networks as cable and satellite, the space during shows and events reserved for advertising is separate and controlled by the providers.
As mentioned above, streaming TV is accessed through a connected TV device, which is anything that allows you to connect to the internet and stream video content. This includes smart TVs, gaming consoles, and specialized external devices. Some of the most popular devices include:
While you cannot advertise on these systems directly, they all house applications for both on demand and live TV streaming.
Now that you understand the “what,” it’s time to get down to the “why.” Advertising on streaming provides businesses with an abundance of benefits unique to its form of media delivery. Among the greatest advantages over traditional channels of audio and television include (1) Targeting, (2) Affordability, and (3) Accessibility.
An increasingly essential component of a modern marketing strategy, targeting enables you to concentrate your advertising efforts on a specified segment of customers based on “targeted” characteristics. There are four main times of market segmentation – demographic, psychographic, behavioral, and geographic. Demographic segmentation divides consumers by age, gender, education, marital status, race, and/or religion. In turn, psychographic segmentation groups people by their values, beliefs, interests, personality, and/or lifestyle. Meanwhile, behavioral segmentation clusters potential customers by their purchasing habits and/or brand engagement. Finally, geographic segmentation deals with location and can be broken up from country all the way down to neighborhood.
With advertising on both streaming audio and television, businesses are uniquely positioned to take advantage of consumers’ detailed online profiles. This allows for a level of targeting unavailable on traditional channels like AM/FM radio and television where market segmentation is limited to geographic at best. On streaming, businesses have the freedom to craft compelling ads tailor-made for specific buyer personas representing consumers who are more inclined to listen to their pitch and purchase their product. In contrast, businesses advertising on conventional TV and radio are limited to creating more generic ads for less understood audiences.
Furthermore, advertising on streaming affords businesses the ability to employ the highly beneficial marketing strategy of retargeting. Retargeting enables you to deliver ads to consumers who have already demonstrated interest in your business or product through some form of engagement online. Because streaming is ultimately web-based, businesses can “retarget” individuals who may have visited their website but not yet made a purchase by promoting reminder advertisements to them across the streaming audio and TV platforms they use. Retargeting has an understandably substantial return on investment (ROI) because it’s focused on closing sales that are already in progress, and this level of specialized and personalized advertising is something that is simply not possible with traditional channels.
The second significant advantage advertising on streaming holds over that of ordinary media is its surprising affordability. For the majority of businesses, advertising on radio let alone television is probably viewed as outside of the budget and therefore unworthy of consideration. This assumption would hardly be misplaced: the cost of advertising on radio in a big city can be upwards of $5,000/week or $15/CPM (per thousand listeners or viewers) while a single 30-second ad buy on local television can be upwards of $30/CPM. In a major market, it’s easy to see how that can quickly run you up into the tens of thousands of dollars.
Conversely, streaming advertising defies conventional wisdom on cost. Advertising on Spotify ranges from as low as $5/CPM to $30/CPM while Pandora offers $5-$7/CPM for a visual ad, $8-$12/CPM for an audio ad, and $15-$25/CPM for a video ad. Meanwhile, advertising on iHeartRadio starts at $5,000/week. Notably, all of these amounts are either at or below the cost to advertise on local radio, which again does not have the ROI-boosting asset of targeting that streaming allows for.
Advertising on streaming television follows a similar pattern. Most connected TV CPMs range in the mid-$20s, which is a comparable rate to local TV. However, in addition to the considerable advantage of targeting, advertising on streaming allows you to exert a greater control over your budget. Because streaming occurs on an individual, anytime basis, costs can be clearly defined and restricted. With time-slotted, mass consumption media on the other hand, viewing numbers fluctuate and can only be estimated. Consequently, it is impossible to know your final cost until after the ad has actually ran.
Finally, the current climate must also be factored into affordability. Due to the uncertainty surrounding COVID, bigger businesses and brands have scaled back their advertising budgets, creating a rare environment in streaming where ad inventory is high and prices are low. Additionally, with social distancing in full effect across much of the nation, consumption of media has never been higher, making right now the perfect time for smaller businesses to not just tread water but flourish through calculated and efficient advertising on streaming.
The third and final benefit streaming has over traditional channels is its accessibility. For advertisers, accessibility directly entails having a greater number of options in both provider and price point. Simply put, streaming audio and television have more platforms to choose from and more variance in cost when it comes to advertising. This means that compared to conventional radio and TV, non-brand name businesses have a viable means of seriously expanding their reach with consumers in a highly purposeful and cost-effective way.
Of course, the accessibility of streaming for consumers themselves provides a substantial indirect benefit to advertisers that will only grow exponentially as time passes. The fact that streaming music services now account for nearly 80% of all recorded music revenue is no surprise considering paid music subscriptions skyrocketed from just 1.5 million to a staggering 611 million over the past decade. Furthermore, more than 50% of the US population already has a connected TV device in their home while more Americans now have at least one streaming video subscription (80%) than they do a traditional pay-TV subscription (65%) (Deloitte). In short, streaming is not just the future, it’s the present, and advertisers would be wise to follow consumers in taking advantage of its perks.
When it comes to marketing, streaming audio and television possess a multitude of benefits over their traditional counterparts. Advertising on streaming is more affordable than ever, more accessible than ever, and allows for greater market segmentation through enhanced targeting that would otherwise not be possible. In the age of COVID, media consumption is at an all-time-high. Now is the time for businesses to capitalize and not just survive, but thrive!
If you are interested in exploring your streaming advertising options and would like to hear more, please don’t hesitate to contact us by email at firstname.lastname@example.org or by phone at 6262091194.