"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Martin Kogan, co-founder and CEO at Headway Digital.
I have a piece of vital advice for brand marketers everywhere: It is time to embrace programmatic video campaigns, or risk going out of style in a world increasingly run by millennials.
This may sound extreme, but I believe there is strong evidence that this advice could be the difference between success and total extinction.
Millennials are like no generation before them. They use their cell phones to text, not talk. They watch TV on their computers and tablets, not television sets. Having grown up fully immersed in a digital world, they’re accustomed to consuming whatever content they want, whenever and wherever they choose.
Sure, you’ve heard that before. But let’s put it in economic context. At 80 million strong, millennials are by far the largest generation in North American history, eclipsing even the baby boomers. By 2020, 1 out of every 3 adults in North America will be a millennial. Remember how all advertising and television used to cater to the boomers? Well, they’re outnumbered now.
More importantly, millennials are poised to outspend boomers in just a few short years. By 2017, millennials will spend some $200 billion annually, or $10 trillion over the course of their lifetimes, making them the most important demographic in the nation for most brands.
And that, in turn, means brand marketers need to pay close attention to how millennials engage with content and make purchasing decisions. They’ve changed many, but not all, of the rules. Let me explain.
In a February report on the digital consumer, Nielsen talks about the Digital Living Room, thanks to the proliferation of multiple devices. Families can now gather in the same room to consume content, with every family member watching a different show, thanks to the multitude of video-on-demand options, including Netflix, Hulu, YouTube, Sony Crackle, the websites of the content producers, DirectTV and the TV-on-demand services offered by all the major cable operators.
How are brands going to reach consumers – and specifically, the all-important millennials – now that they’ve essentially switched off their television sets?
The first step is to identify the types of content millennials consume most. Millennials still watch TV shows (37%) more than any other video content, according to research by Marketing Charts. They’re also by far the biggest digital consumers of user-generated content (33%), movies (28%), personal videos (11%) and other web videos (10%). These behavior changes mean marketers need to adopt video advertising campaigns now.
Fortunately for brand marketers, there are now massive volumes of video inventory now available to reach millennials. Video advertising is growing many times faster (19%) than TV (which shrunk by 2%), search marketing (8.6%) and display ads (2.9%), according to June 2014 research by Business Insider. In terms of revenue, video advertising topped $2.8 billion in 2013 and will climb to $5 billion by 2016.
Consider this: Video ad views exploded in 2013, hitting 35 billion in December alone. And with a click-through rate of 1.84%, video ads are the best performing digital channel.
The good news for everyone reading this article – there’s plenty of video ad inventory available in the RTB markets. Video inventory will account for 25% of the impressions available in the global ad exchanges, but will grow to 67% by 2017, according to MAGNA Global.
That means marketers can launch video campaigns aimed at millennials at scale using programmatic marketing. Need to reach recent college grads considering their first auto purchase? Brides planning their weddings? First-time homebuyers? Marketers can leverage robust demographic and behavioral data segments to pinpoint their exact audiences if they’re watching videos from their laptops or computers. And data-driven marketing is quickly catching up to the mobile channels as well.
Programmatic will soon come to the connected TV, so that a consumer who views a pair of shoes on Zappos.com via their laptop may soon see a Zappos ad as they watch their smart TV.
Make no mistake about it; Millennials are dragging us all into a digital future. Those who embrace early adoption will thrive.