Lately, there have been a lot of questions around YouTube and TV:
Should YouTube advertisers focus on YouTube TV or OTT? What is YouTube TV & how do you advertise there? Should you treat TV differently than other devices on YouTube?
This blog post will evaluate these questions using recently collected data from Adlucent clients advertising on YouTube TV. We’ll discuss how TV watching habits have evolved to favor streaming alternatives and assess the advantages this evolution presents for brands, including expert tips for advertisers interested in YouTube for TV.
Our YouTube Advertising Findings
We analyzed data from our advertisers over the past 6 months to evaluate the impact YouTube advertising on TV screens was making relative to other devices. We found TV has a unique, significant relationship with views and view-thru rate (VTR).
Finding #1: We found that while TV accounts for roughly 4% of impressions and spend, it also makes up 11% of views. This finding means that TV viewers are more likely to have an ad exposure count as a view compared to other devices. As a reminder, a view is counted when the user watches an ad for at least 10 seconds or interacts with the ad (e.g., clicking a call-to-action).
Finding #2: Digging into the data further, we found that TV has a view-thru rate of 43%, compared to an average of 14% across devices. This means, nearly half of all ads shown on YouTube led to an engaged view!
Finding #3: Additionally, these views were coming in at a less expensive rate. On average, YouTube has a CPV of $0.06. When looking at TV alone, that rate drops to $0.02/view, an almost 67% percent difference.
What is our big takeaway from these findings?
TV screens are an advertising space worth investigating with a VTR 3X that of other devices and a 65% lower CPV.
The Rise of Connected Television
Before we dig deeper into the merits of YouTube, let’s take a few steps back and assess the bigger picture of small screen advertising. How and why does YouTube now fit in this very traditional advertising box?
The answer is pretty simple: Over the last few years, people have transformed how they use their televisions — goodbye to the traditional channel surfing days of yore, and hello to user-empowered streaming. Users continue to cut the cord of traditional television viewings like satellite and cable in favor of models that allow them to view shows and movies on demand. These alternative options are typically CTV (Connected Television) and OTT (Over-The-Top).
- CTV is defined as TV sets connected to the internet through wired or wireless networks. These can be in the form of connected or streaming devices (e.g., Roku), smart TV (e.g., Samsung Smart TV), and gaming consoles (e.g., Playstation). CTV devices can show various content, including OTT, Live TV, and Video on Demand.
- OTT is delivered through an internet connection, as opposed to a traditional provider (HBO Now, Hulu, Amazon Video, YouTube TV, Sling TV).
A recent Comscore study found an 80% increase in watch time during March 2020, compared to March 2019, and that increase in viewing behavior has been consistent throughout the last year. Additionally, Google found that casting time increased at nearly the same rate, 75% YoY. A 2020 study by Sightly found over 80% of households, or 104 million, had some form of connected TV which is up 82% compared to 2016.
As users shift toward non-traditional viewing behavior, advertisers need to follow suit. According to Debbie Weinstein, the Vice President of Global Solutions for YouTube, “More and more marketers are having a dedicated line item in their media for streaming.” In fact, eMarketer found that in 2019, CTV advertising was a $6.5 billion industry.
YouTube’s Role in CTV & OTT
It’s clear that users are stepping away from traditional television in favor of connected TV options and advertisers are following suit – what’s next? Let’s take a look at how this shift toward CTV and OTT options has affected YouTube viewing habits and its advertising efficacy on TV Screens.
YouTube has wide-reaching advertising solutions.
- OTT: YouTube TV is YouTube’s OTT streaming service. Advertising on YouTube TV allows advertisers to reach users watching live broadcast television from local affiliates and YouTube original content. According to Sightly, over 95% of OTT video viewers watch YouTube every month at minimum.
- CTV: YouTube campaigns are automatically eligible to show through CTV, commonly through the YouTube app on your connected device. According to eMarketer, YouTube supplies the most CTV advertising space in the US.
Size & Growth
YouTube viewership on TV is significant. A recent report shows that over 100 million people in the US watch YouTube on TV screens each month. And that viewership grew to 120 million in December 2020. Every day, users watch over 180 million hours of YouTube on TV screens. This viewership accounts for roughly 70% of all YouTube viewers, according to Ipsos. And, it’s growing! eMarketer found that in Q3 of 2020, YouTube viewership started shifting to TV screens and away from mobile devices. This is building upon growth from 2019 when CTV was the second-most-watched device for YouTube content in the US.
YouTube is better than traditional television in equally distributing ads among users. A recent YouTube study found that linear TV is less effective than YouTube in diversifying who ads get shown to. A study analyzing ad exposure to TV viewers found that linear TV heavily favored showing ads to heavy and medium viewers. In contrast, YouTube was more effective at equally distributing ads among all viewer levels. This result is driven by YouTube’s ability to create frequency parameters for ads within a campaign, ensuring that no single user has repeatedly shown the same ad or set of ads.
YouTube has more specific targeting capabilities than linear TV. With traditional television ads, advertisers can choose when and where an ad shows. On YouTube, advertisers can target specific behaviors and interests, allowing them to select who the ad is shown to. This targeting still exists when advertising on CTV, allowing for a more tailored ad placement than traditional television.
YouTube ads on TV screens are more likely to be viewed and not skipped, compared to other devices, & YouTube views from TV screens are less expensive. As the Adlucent data at the beginning of this blog post revealed, YouTube ads shown on TV screens are 3X more likely to get a view than on other devices, and those views cost much less (65%).
YouTube’s CTV capabilities are getting noticed & measured. Beginning this year, Nielsen is set to start incorporating YouTube CTV into its Digital Ads Ratings system. This will start with YouTube TV being incorporated in 2021 and extend to the YouTube app on CTV by the end of the year.
Shifts in YouTube TV Viewing Behavior
The trends listed below show that YouTube’s presence on the TV screen is not only here to stay but to grow.
- Time spent viewing YouTube on TV Screens is up compared to other devices. A Sightly study found that YouTube viewers watched YouTube on CTV for an average of 7.3 minutes, compared to 5.7 minutes on desktop and 3.6 minutes on mobile.
- YouTube on TV screens is more likely to be watched with others. A Nielsen study found that when a user watches YouTube on a TV screen, 26% of the time they are watching with another person, which is higher than the 22% of shared TV time for linear television viewers.
Several aspects of advertising on YouTube TV screens are more efficient, especially in gaining diverse impressions and views. This is underscored by the notable shift in user behavior towards television screens for streaming content. As user behavior shifts toward CTV/OTT/YouTube on TV Screens & the advertising dollars follow, brands must understand how to effectively advertise in this space.
Incorporating YouTube into Your Media Mix
How can advertisers incorporate YouTube into their media mix? First and foremost, establish a YouTube advertising program and budget. As users shift away from traditional media, your advertising budget must reflect that trend; there’s no point in continuing to invest disproportionately large budgets in an ad space that is shrinking. To understand more about general YouTube advertising, check out these past blog posts: How to Get Started With YouTube Advertising and Why & How to Tackle YouTube to Build Your Brand.
Once you have secured YouTube advertising as part of your marketing mix, let’s review some tactics and recommendations for optimizing YouTube for TV Screens:
- When to target TV screens: Align your strategy with your goals. Advertising on TV is most effective for YouTube campaigns with awareness and consideration goals.
- Less conversion measurement consistency on TV Screens: It is more difficult to measure conversions from a TV screen than other devices. Although conversions can and are currently measured and reported on, Google is working on more reliable action reporting from TV Screens.
- Strength in optimizing for views & impressions: Adlucent data revealed that YouTube ads on TV Screens had a VTR of 43%; nearly half of all impressions led to a view. This high tendency to gain views means that TV Screens are great for building brand awareness and capturing that all-important view. TV-oriented solutions are particularly effective when you have these types of awareness and consideration goals.
- Leverage Google’s Reach Planner to start. Google’s Reach Planner leverages Nielsen TV Data and allows you to see how spending on YouTube vs. TV will affect your reach.
How to Target TV Screens for Advertising
There are many routes you can take to target TV Screens on YouTube. Below, we’ve outlined a few effective options:
- Buy ads on YouTube TV with YouTube Select. YouTube Select is Google’s premium ad service that bundles together different videos and packages in “lineups.” They even have a specific lineup for streaming TV. This option is available through a reservation, Google Ads & DV360.
- Buy through reservation. You can only implement this type of campaign through a Google sales representative. Advertising on a reservation basis allows you to pay based on the number of impressions you want at a fixed rate rather than buying a spot through the auction. This option is effective for increasing brand awareness.
- Optimize your YouTube campaigns toward TV screens. Since most in-stream YouTube campaigns automatically run on all devices, all you have to do is adjust your device bid modifiers/multipliers up or down to maximize your campaigns toward your desired TV reach.
- Duplicate or create a new YouTube campaign & only run on TV Screens. If you have a specific goal for TV Screens or a specific message to be shared on TV screens, your best option is to create a new YouTube campaign and use -100% bid modifiers/multipliers on non-TV devices. This option will allow you to evaluate the effectiveness of TV screen advertising for your client and optimize specifically for TV. We recommend that you have a sufficient budget to allocate toward your new TV-targeted campaign for optimal learnings and results to move forward with this option.
- Consider additional ways to activate on DV360. There are even more ways to start YouTube on TV screens with DV360, including auction packages for premium CTV inventory and TV insertion orders with OTT line items. Learn more about all of the available options here.
- Recommendations for video on TV screens. Ensure that your video content is optimized to show on TV, as CTV devices typically connect to large screens and support high definition. Google requires the .mp4 video format and recommends video dimensions of 1920 x 1080.
If you’re a brand or retailer that needs support with activating on YouTube, our expert team at Adlucent is here to help. Contact us today and learn more about how you can leverage YouTube and our management services to achieve success and reach your digital marketing goals. And if you want to gain more insight into tactics and trends that can help improve the performance of your social strategy in 2021, download our Shifting Social Strategy in 2021 white paper!