Why Media Companies Must Deliver Relevant Ads

Media advertisements aren’t what they used to be — and neither are viewers’ or advertisers’ expectations of those ads. No longer can a company simply serve up a video ad, run it at any time of day or on any network, and expect it to resonate with viewers over the long term.

In the old days, a jingle or a subliminal message could go a long way, especially as viewers became familiar with a brand and its messaging. Today, attention spans are — hey, pay attention, I’m talking to you! — simply too short. And the proliferation of streaming and social media channels, all available at your fingertips, makes for a constant battle for attention.

This is one of the reasons some OTT (over-the-top) media companies are struggling in today’s economic market — some are even laying off staff or cutting content budgets. As consumers tighten their spending, media brands need to prove their subscription dollars are worthy investments, yet often consumers find themselves with unwanted subscription charges. A recent Bankrate survey showed that 51% of U.S. adults had unwanted charges from a subscription or membership service. Chase Bank conducted a similar study, which found that 71% of Americans had more than $50 per month of unwanted subscription fees.

SVOD (subscription video on demand) and AVOD (advertising-based video on demand) models worked well during the economic and OTT media booms. Now, however, some companies are switching to a FAST (free ad-supported TV) model. Good, free content, such as what’s on FAST platforms like Pluto TV, will always have subscribers’ attention. And it turns out ads aren’t necessarily a dealbreaker for many consumers, especially those with tightening wallets. In fact, a recent study from SpotX revealed that 60% of American consumers of CTV (connected TV) prefer ad-supported content over paid ad-free services.

Yet, ads on those FAST platforms — or any platform — must still be sharp, localized and relevant. The way to do that is to become more sophisticated with ad delivery. Let’s explore the different ways to accomplish that goal.

Viewer expectation of ad delivery

Dynamic OTT advertising technology exists to help OTT platforms and advertisers to deliver engaging, interactive ads to viewers. Few companies use this technology to the fullest. Cutting corners on details like localization might actually alienate a viewer more than entice them, such as an ad that fails to account for regional differences in phrasing, confusing a portion of the audience.

Viewers have lower tolerance for the ads shown to them, and ads must meet high expectations to capture attention. Sure, viewers will stay put in many cases due to inertia, comfortable on their couches and invested in the content they selected, but there is always a threshold. How many obnoxious ads will they sit through? Or, how many ads are simply too many? There’s a line.

As ads become more sophisticated, viewers come to expect personalized ads tailored to their interests and demographics. While some companies do this today, advertisers and the media companies that support them have a long way to go compared to other industries.

Take the example of an online retailer; these companies deliver relevant and accurate predictions for future purchases every single day — it’s a core component of their revenue model. Some media companies, meanwhile, think nothing of running awkward male enhancement ads at all hours of the day, during programming tailored to all audiences.

Tone-deaf advertising alienates the subscriber, and can create a negative experience. The actions subscribers take in response can range from muting the advertising to canceling the subscription or potentially upgrading to an ad-free version of the platform, which can help the media company from a revenue perspective, but doesn’t solve any of the issues associated with mistargeted ads. Ultimately, the media companies that strike the right balance of targeted, yet subtle advertising campaigns will earn more revenue from both higher subscription rates and advertiser dollars.

Advertiser expectation of ad delivery

It is easier than ever for viewers to engage with or buy most products, yet perhaps harder than ever to get them to do so.

For many advertisers, the goal is engagement. A click or a registration shows proof that an ad resonated with an audience. The goal should be to make this as easy as possible, such as with one or two clicks or pushes of a button.

Take the example of Coinbase, which ran an ad during the Super Bowl. The ad consisted of a huge QR code bouncing around the screen like a DVD player icon. Despite its simplicity, the ad went viral, triggering a 309% week-over-week increase in app downloads, according to Sensor Tower. Whether curiosity or urgency caught viewers’ attention, the advertisement simply worked.

By engaging customers where they’re most comfortable (on the couch, mostly) and making the next steps as easy as possible, advertisers can win. If an ad doesn’t have an interactive element or, worse, requires the viewer to go in-store for the next step of the engagement, the advertiser can expect a significant drop in retention. In a world where a viewer can scan a QR code on the television, request more information via a voice-enabled device, or simply search your products and enter contact information in seconds, advertisers must reduce friction wherever possible. Get the customer into your funnel and expand the engagement later, such as with a loyalty program, mailer, app download or promotion.

Consequently, advertisers expect — or will come to expect — media platforms to help them deliver on these goals. The technology exists to allow viewers to scan QR codes, see localized ads with addresses for the closest brick-and-mortar locations, serve ads relevant to the current programming, show dynamic or real-time prices, and purchase downloads straight from a smart TV. Ads will become a more interactive experience across different devices and platforms. Media companies must hold up their end of the bargain to keep advertisers appeased.

Let’s roll it all together into one example: a beer company that wants to run an ad during a soccer match. A media company has the technology to:

• show revolving ads overlayed on banners located inside the stadium throughout that match, perhaps for different products or personas,

• display the nearest location where the viewer can purchase the product, and

• reveal a QR code in that sequence of ads to enter a giveaway contest.

That type of interactive advertisement contrasts starkly with a traditional beer ad that doesn’t give the viewer an opportunity to engage.

Aligning expectations

Media companies face a difficult task presenting advertisements that align to both subscriber and advertiser expectations — yet, it can be done. Just as brands must be relentless in pursuing digital quality, media companies must enable advertisements that keep all parties happy.

Here are four criteria for media companies to pursue in ad delivery.

Localized. Ads must be relevant to subscribers in a particular market. This includes validation for localized ads during live events. For streaming media providers, this might include ads with frames that include addresses for local brick-and-mortar locations. Of course, as with other digital products, the ad must be properly localized for details such as spoken and written language, date formats, cultural sensitivities and regulations.

Interactive. Give subscribers the opportunity to engage with an ad or a brand. Dynamic advertising enables deeper, two-way levels of engagement with an ad. The advertiser can collect data on how subscribers interact with an ad and potentially offer an engagement bonus, such as a promotional offer or the ability to skip subsequent ads. The subscriber can receive timely, direct information regarding the product or service they just saw.

Dynamic. Nobody wants to see the same ad over and over again. Subscribers tune out and might even mute an ad they’ve seen before. While no advertiser has a limitless budget for ads, repeated ads create a negative experience and diminish the brand’s reputation — far from the ideal outcome. Advertisers must become smarter with how they present ads to subscribers, and media companies must work with these advertisers to encourage diversified delivery plans.

Relevant. An ad shown to the wrong target user is extremely unlikely to yield good results. For example, an ad might perform really well with a demographic of college students in the northern United States, but completely fail to resonate among middle-aged professionals in the south. Keep in mind the content presented to the subscriber as well; the ads shown during a sporting event, for example, should probably not be the same as ads presented during children’s programming.

Applause offers a variety of functional testing services for streaming media providers. Validate ads with real, vetted in-market viewers to ensure consumers can see ads — and that those ads don’t prompt them to throw their remote control at the television out of frustration.

Tell us more about your digital quality goals, functional testing needs or ad delivery concerns today.