For many big brands, advertising on CTV has become a central tenet of their marketing strategy, but for those in smaller businesses, the potential of the channel is still relatively untapped.
Some AVOD platforms have launched initiatives to get more small businesses into CTV advertising, such as self-serve platforms to make the whole process more accessible.
What’s stopping small businesses from using CTV advertising?
For brands with smaller marketing budgets, CTV may have historically seemed out of reach for them.
Rudy Byfield is CEO and founder of CellDration, a US-based premium water brand. Byfield’s business had never used any video advertising before they ran a streaming campaign on Hulu.
“Instinctively we thought it was going to be beyond our budget, but actually when we scratched the surface of some of the expenses involved, it was right up our alley in terms of a budget,” Byfield said.
“I have to imagine that there are businesses out there that may assume that the cost is beyond their budget, and so they don’t necessarily look into it,” he added.
Michael Howie is director of marketing at Hastings College, a college in the US state of Nebraska. He says that advertising on streaming was something that advertisers like Hastings College could not afford until recently. Hastings College was selected as a beta tester for Hulu’s ad manager system.
“Just two years ago budget-limited advertisers like Hastings College were mostly shut out of the streaming market. Minimum spends were too high, and companies who built streaming services had not yet worked out how to make advertising available on a broader scale, either through a self-service system like Hulu built or through a third party,” Howie said.
Gee Ranasinha, CEO of KEXINO, a small business market agency, points out that the creative costs for small and medium businesses in entering the streaming market are fairly high.
“The real cost lies in the creative – the ideation and subsequent production. Unless your small business has in-house talent that can equal the execution values from an external professional provider, you’re going to be found wanting,” he said.
CTV versus linear TV advertising for small businesses
Hastings College has used advertising on both linear and streaming TV. Michael Howie says that the two mediums target different audiences for them.
“On traditional TV we mostly run during the local news and local morning programs. We know high school students may not be watching during those times, but their parents and grandparents and others who may influence the college decision are, and that is a good place for us to be,” Howie said.
However, when it comes to reaching prospective students themselves, advertising on CTV meant Hastings College could target specific groups.
“We want to be where viewers are, and we know a significant number of viewers are streaming, especially in the age range where we want to be. Advertising on streaming services allows us to narrow where we spend our dollars, both geographically and using other demographics,” Michael Howie said.
Rudy Byfield says that the targeting capabilities on streaming and the guarantee that the ads were being put in front of consumers’ eyes were some of the things that attracted his business to CTV.
“One of the things we found attractive was the ability to deliver content that is specific to a particular geographical region, for example,” Byfield said, “We found streaming channels much more advantageous than one-size-fits-all advertising or even ads on social media where you’re at the mercy of their algorithms and of a person scrolling through who might not take notice of your ad.”
For Byfield and CellDration, linear TV advertising is something they don’t consider to be effective for their needs.
“It would be hard for me to make a decision to invest the same dollar in traditional advertising and TV as I would streaming channels because I’ve seen what it can do for the level of control that we can have. I’ve seen how agile it allows us to be, and how well we can control the expense,” he said.
Gee Ranasinha at KEXINO warns small businesses not to rule out linear TV altogether.
“Traditional TV advertising offers considerably more reach than either online or VOD. Much has been written about the supposed death of traditional TV in terms of viewing figures when compared to other video media. While streaming and social media-based channels have definitely increased in popularity – and continue to do so – traditional TV is still way out in front. TV advertising reaches over 94 percent of the UK population – a figure that can’t be matched by any online alternative,” Ranasinha said.
Higher costs in Europe
In contrast to the US, which has a variety of widely used AVOD services, the UK only has a handful. These are mainly BVOD services, run by the broadcasters.
“Excluding production-related costs, traditional TV advertising slots are more expensive than similar slots on streaming channels. They require a larger overall budget due to placement commitment, plus there’s usually a pricing incentive to place multiple ad slots,” said Gee Ranasinha. “In contrast, many social streaming services such as YouTube don’t mandate a minimum placement quantity. For a small business looking to dip its toes in the world of video advertising, this makes the commercial barrier to entry somewhat reduced. Broadcast VOD channels, such as ITV Hub or All4, are somewhere in between these two in terms of cost.”
Ranasinha says that advertising on streaming channels is not right for every business.
“The kind of business you are, the kind of product or service you sell, the kinds of customers you have, the industry you’re in – all of these things influence whether this kind of advertising is right for you. Just like pretty much everything to do with marketing, there are no single right (or indeed wrong) answers,” he said.
But for businesses like CellDration, advertising on CTV is the right move for them.
“Streaming is now an integral part of who we are as a brand. We think it’s the fastest way to get our message through to our audience. It’s certainly the most efficient. So this is where we will be putting our nickels and dimes going forward for the foreseeable future as a brand,” Rudy Byfield said.
