The Shift to Connected TV

TV habits have drastically changed over this past year, affecting not only how people view TV but also how TV advertising is bought. The Trade Desk released The Future of TV Report: The CTV Tipping Point where they highlight various ways TV trends were changed by the pandemic. We take a look at two of the top changes that have come out of the switch to streaming services based on the report.

Increased Cord Cutting

With more types of live programming being added to streaming services, the need for cable is diminishing. According to The Trade Desk report, 15% of consumers cut the cord in 2020, increasing the number of connected TV (CTV) households to 84 million. This increase in cord cutting is a major jump from 3%-4% of cord cutters that was seen in 2019.

Although many believe cord cutting is limited to younger generations, this switch spans across all age groups. In 2020, 8% of those 55+ canceled their cable, with that number projected to increase to 20% in 2021.

As more streaming services become available, cord cutting is unlikely to slow down. Twenty-seven percent of consumers stated they intend to leave cable in 2021.

With this channel increasing in prominence, the opportunity to target consumers via CTV is now more important than ever.

Shift in Spending Between Cable and Connected TV

This change in the way consumers view TV has forced marketers to shift the way they think about TV advertising. The Trade Desk reported that 89% of marketers now felt that CTV advertising was just as effective, if not more than, traditional linear TV. This change in perception caused advertisers to reallocate budgets in 2020, allowing for more CTV spending; resulting in CTV ad revenue increasing 17%, while ad revenue across all other media channels fell 14%.

This approach will continue on in 2021, with nearly 60% of linear TV buyers reported saying that they will be making fewer upfront commitments in 2021. With less spending in linear TV, it will be more important to focus on data-driven solutions for CTV.

This reallocation to CTV will be even more important for Pharma, who are historically big spenders in the TV category. The 4th quarter of 2020 saw a huge uptake in overall TV spending. Fierce Pharma reported that pharma brands spent $217 million in TV during the month of December, while November saw $204 million in spending and October saw $187 million. As more people continue to switch to CTV, pharma will have to adjust their strategy to account for the cord-cutters. It will also be crucial that they use partners who can effectively reach these cord-cutters to ensure the success of their CTV campaigns.

With our proprietary Micro-Neighborhood® targeting, we at Medicx Health use an audience-first approach to your CTV campaigns. By utilizing our data derived from real-world health insights, we can target the right audiences for your CTV campaign. We can leverage our experience planning and executing CTV campaigns to support our pharma and healthcare clients.  Our solutions focus on offering you a closed loop solution, from planning to execution to measurement.

To learn more about how Medicx Health can help with your CTV campaigns, contact your Medicx representative or use our contact form.