Finding Your Audience: TV Advertising in the Age of Streaming

| By Michelle Gatto

Seemingly on a weekly basis, a wave of fandom rises for the next stream-worthy show: Ted Lasso, Stranger Things, The Rings of Power, Yellowstone. Accolades abound for powerhouse streaming services like Netflix, Hulu, Disney Plus and even newcomers like Paramount Plus and Peacock. Countless headlines publicize that streaming viewership has outpaced cable television for the first time. While data supports this theory, it begs the question: is linear television advertising worth abandoning entirely?

Cable television originated in 1948 and quickly surged, resulting in the birth of popular TV networks like ESPN, CSPAN, and Nickelodeon in the 1970s. The number of networks and channels quickly amassed as the industry was deregulated and the internet became increasingly accessible. By the 2010s, cable TV was thriving, with over 105 million subscribers and a projected 10 billion in advertisement commitments. Paid cable programming occupied 90% of all in-home television sets with the average TV household containing 189 channels.

However, a distinct shift has occurred in recent years, accelerated by the 2020 COVID-19 pandemic. Streaming services had held relatively minor popularity, but, suddenly, consumers flocked to curated, ad-free platforms for viewing on demand. The result: streaming services skyrocketed, with 85% of households subscribing to at least one service at the end of 2021. Yet, the unfolding history of streaming is not so different from cable TV’s.

At the start of 2022, the average number of Video on Demand (VoD) subscriptions per household was at 4.7. But as the world continues to return to a new normal, consumers are second-guessing their stock of services and opting to reduce or rebalance. In the second quarter of 2022, Netflix reported a drop of 970,000 subscribers, with the majority centralized in the US and Canada. Critics will note Netflix’s failure to diversify as their potential downfall. With other VoD services incorporating news and sports rather than relying upon evergreen content alone, Netflix has fallen behind the pack.

Already, VoD markets are becoming severed and segmented as companies carve out pathways for niche audiences and increase their monthly subscription rates. Giants like Netflix and Hulu garner attention for single-show productions, but as seasons conclude, subscribers are waning. With climbing monthly premiums, crowded competition, and limited viral content, streaming services are experiencing an increase in subscribers, but receiving an unreliable audience.

The solution for strategic TV advertising? Rather than relying on the latest headlines to determine the right platform, it’s critical that you develop an understanding of your intended audience and uphold sturdy marketing practices. Define your target market, tailoring by age, gender, demographic, geographic, and psychographic factors. Then, let those factors dictate your strategy. This phased approach will ensure that your TV strategy and tactics align with your audience’s viewing habits and reach them directly where they are.

Based on your audience’s factors, it could be that you need a streaming-only play. Or maybe a mix of streaming and broadcast cable for maximum reach. Or, very rarely, but with the right niche audience, a cable-only play. These buys can be guided by an agency partner to determine the best strategy, with strategic partnerships via programmatic vendors, directly with sales reps at local broadcast stations or cable providers, or other avenues.

The bottom line: it’s true that streaming has overtaken much of the television landscape, but don’t go all-in on streaming without a concrete plan. It is critical to take a step back from national headlines and understand that sometimes streaming alone may not be the answer. Start with your goals and objectives, very clearly define and understand your audience, and develop strategies and tactics that align. Otherwise, you run the risk of excluding part of your target audience entirely.

Interested in further solidifying your target market and developing your marketing and advertising plans? Contact us today.


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