The year is 1996. Television is the most popular medium for news and entertainment, and millions of viewers gather in front of their screens every night. Their shows play for a few minutes, then pause for a commercial break. Although a little disgruntled, viewers are accustomed to watching 30-second commercials before they get back to "Seinfeld," and marketers are used to creating them.
Twenty years later, television is different. People still own TVs, but they're not watching commercials and programming in the same way. The advent of DVRs and streaming services made it easy for people to watch on their own time and, in some cases, skip commercials.
Nevertheless, TV remains a powerful medium for connecting with audiences. As consumption habits change, however, reaching viewers can become more difficult. Many advertisers aren't even clear on what new terms and platforms mean for them. Given that this is a continually evolving space, buyers' and sellers' opinions and definitions may vary. Let's break down some of the more commonly used terms from our current perspective:
When people watch
The most traditional means of watching TV, linear programming runs at a scheduled time while audiences watch it live on a television.
Nonlinear platforms support place- and time-shifting. When someone sets her DVR to record her Thursday night show but watches it over the weekend, she's taking advantage of nonlinear television.
Viewers can access video content, like TV programs and movies, at any time after its original air time. Video on-demand options are becoming more widely available through cable set-top boxes, mobile apps, and streaming services.
Ways people watch
OTT refers to the delivery of content over the internet, outside of traditional cable or satellite services. Viewers who subscribe to services like Netflix or Hulu, rather than their local cable provider, are watching content over-the-top. OTT content can be accessed through internet-connected devices like laptops, smartphones, tablets, or connected TVs. Apple TV, Roku, and Amazon Fire TV are commonly referred to as OTT devices or streaming devices because they connect to a TV and allow access to video content "over the top."
TV Everywhere (TVE)
TVE is an offering available through a growing number of cable TV providers, allowing subscribers to watch live or on-demand TV content within an app or a browser via compatible connected devices like laptops, smartphones, tablets, or connected TVs. Unlike OTT content delivery, TV Everywhere requires a cable or satellite subscription. For example, if a viewer watches "The Bachelor" through a paid Hulu subscription, she's accessing OTT content, but if she watches it on ABC.go.com by logging in with her cable credentials, that's TVE.
How advertisers reach people
Programmatic TV automates the buying and selling of TV advertising through software. Buyers typically use third-party data sets, matched against set-top box viewership data, to identify a mix of networks and dayparts that overindex against their audience. This allows buyers to take an audience-first approach to TV campaigns by looking at strategic targeting attributes to inform their buying decisions, which is different from traditional TV ad buying that's often based on historical age/gender ratings data. This is a shift in traditional TV buyers' mindsets. They need not care if their ad runs during "The Voice" or "MythBusters," just as long as their target audience is watching.
Addressable TV advertising delivers targeted messages to specific audience segments at the household level. Select TV providers use first-party set-top box data and third-party data -- such as demographics, behavioral criteria, and shopping propensity -- to create a match between ads and households. It then dynamically inserts a TV ad into the set-top boxes of households that match your target audience. While programmatic TV is optimized for a particular audience, your ad will still reach some viewers outside your target, whereas addressable TV reaches only your defined audience.
Making sense of the new TV space
The range of new options to reach video viewers can seem overwhelming, but it opens plenty of opportunities. To make the most of your choices:
1. Revisit your audience.
Technology has triggered shifts in reaching consumers -- Millennials' viewing of "Mr. Robot" differs from how their parents catch the nightly news. Look at your consumer base, and understand how it's watching video http://www.businessinsider.com/forrester-video-and-tv-consumption-report-2015-1 content.
2. Refine your message.
These same changes in television will not only impact how you reach your audiences, but also what you reach them with. Tailoring your messages based on what you know strikes a chord with different demographics.
3. Re-evaluate your buying strategy.
Audience migration should have an impact on budget allocation. Are you now overspending on traditional TV if your core audience is cutting the cord, or should you test out addressable TV if your target is a small subset of the viewing population? It may be time to test new ad tactics to better engage audiences.
Viewers' means of watching may have changed, but their appetite for video content is still growing. Marketers are in an ideal position to refine TV campaigns. A better understanding of industry terms -- and how to reach people -- is the first step to dominating video advertising.