As we have already mentioned, targeted ads are a publicity mechanism allowing users who meet established criteria to be separated from the general public to focus the advertising actions of video playback services on them. Today we will focus on how targeted advertising works.
Thanks to Big Data we gather much more data than before, but also more confusing. However, the data can be treated in such a way that it allows more precise segmentation and, therefore, more precise strategies directed to specific consumers identified from the data.
How Does Targeted Advertising Work?
Today’s audience no longer tolerates long commercial breaks. As a result, traditional advertising models often fail, and many viewers switch channels while ads are on air. This is one of the reasons why users prefer to pay for a subscription for ad-free streaming platforms like Netflix or Disney+. Although there are also video streaming services that combine paid ads and subscriptions, audiences can watch videos with ads or skip ads with premium subscriptions. In addition, the broadcast of commercials has a different format than traditional television, which is usually long and unfocused.
Targeted advertising is advertising that aims to reach specific consumers. They have been used successfully for a long time and have been shown to better reach potential customers. The main benefit of this type of advertising is that it is more profitable to promote a product or service to an audience that is more likely to consume it.
We can divide targeted advertising into two main categories:
– Demographic Advertising: Targeting a specific category of consumers based on certain common characteristics, such as age or gender.
– Targeted Advertising Based on Content: It is generally more targeted to audiences with more specific interests.
In OTT streaming services, we can not only customize and adapt content to enhance the user experience in a personalized way but also perform targeted advertising using data collected from users, such as age, gender, geographic location, content consumed, etc.
Benefits of Targeted Advertising on Streaming Video Services
Specific Demographic Targeting
OTT VOD streaming services are a great platform for reaching millennial audiences who are constantly looking for other ways to consume entertainment. Unlike traditional TV advertising, geo-targeting is limited to specific areas. Targeted advertising allows businesses to choose specific postcodes and predetermined areas.
Reaching All Types of Devices
There are many ways to showcase your product or service to your audience from smartphones and laptops to desktop computers and smart TVs. Continuous advertising allows brands to run long and short ads optimized for all devices and screens. This ensures that brand messages reach the relevant audiences.
Facilitating Customer Segmentation
OTT VOD streaming advertising allows the company to target specific customers. This makes it easier to collect personally identifiable information from individual viewers and helps to better customize their viewing experiences. It also allows ads to reach audience groups directly delivering the brand message to this audience based on their interests, income, gender, zip code, etc.
OTT VOD streaming offers the ability to choose how advertisements are displayed in front of viewers. Advertiser brands can choose between showing the entire ad or allowing viewers to skip ads after a few seconds.
Conventional TV commercials are more expensive, especially when it comes to covering a wide range of viewers. On the other hand, advertising is cheaper and more profitable for streaming services. The right audience can be reached and targeted effectively, and with better results.
Control of Advertising Content
Targeted advertising is very customer-centric and gives advertisers more control over ad content. When a viewer decides to watch a particular show, they don’t mind watching commercials a few seconds before or in the middle of the show. This allows ads directed to viewers’ personalized experiences instead of pestering them with random ads that don’t interest them. Specific streaming platforms can be selected for offers, e.g. a fashion brand can advertise or show on an exclusive fashion streaming platform to reach the right audience with a relevant message.
From JUMP Data-Driven Video, a business data management platform designed specifically for video service players, we work to improve the user experience and offer you key segmentation and analysis to create targeted advertising.