Lockdown Spurs Growth of Streaming Video, Driving More Opportunity for Local Dealers

by Ed Steenman

The COVID-19 pandemic has changed many aspects of our lives, including the way we work, learn, shop and communicate. In regards to consumer video consumption, the pandemic hasn't so much changed the paradigm as it has advanced significant trends already in motion, mainly the impacts of cord cutting and streaming on the growth of digital video and the continued audience erosion of traditional TV. 

BIA Advisory Services (a recognized media industry consultancy) labeled OTT and connected TV as "game changers" citing "advancements in ease and ability to purchase fragmented inventory and more advanced audience targeting" in releasing its forecast for U.S. local advertising in 2021. According to BIA's Rick Ducey " (the) local viewership shares gained in Q2 and Q3 of 2020 (are expected to) be maintained and expanded" According to eMarketer research, connected TV (CTV) audiences have now surpassed those of cable TV. Simply put, the audience growth that has occurred as a result of the lockdowns is here to stay. 

OTT's growth, along with advances in data integration, provides new opportunities for dealerships to use more personalized TV advertising to deliver targeted video ads.

Advertisers are now able to layer in-market data from first-party and third-party vendors to target in -market buyers based on make/model or class of vehicle. It is now possible to deliver, on a local level, specific unique commercial messages by household or even individual viewer. This means that different creative messages can be delivered to different people viewing the same content at the same time based on a number of household demographics or characteristics. 

There are also continued advances in attribution. By adding a tracking pixel to their website, advertisers can more easily track and manage the performance of their OTT campaign(s) to ensure they are driving traffic that converts to actual vehicle sales.

 How does OTT compare to television, YouTube or social video platforms?

In comparing OTT and programmatic advertising to index-based broadcast or cable TV; comparing the cost per thousand (CPM's) of impressions each media delivers has been the traditional approach. Other factors typically considered in this type of analysis are factors such as age, sex, geography, rating survey area, live versus delayed viewing. Here you might see comparable CPM's for a linear or traditional TV buy when compared to OTT. However, this level of analysis fails to account for the targeting advantages OTT delivers in the ability to target in-market shoppers. Assuming that 11.51% (14.8 MM SAAR projected for 2020) of U.S. households plan a new vehicle purchase within a year, and assuming a three-month purchase cycle, counting only those "in-market shoppers" would result in an adjusted broadcast/ cable CPM easily in the $500+ range vs. a $30-40 CPM for OTT. While this analysis assumes that 100% of the OTT campaign is in fact targeted to in-market shoppers, the magnitude of a 10-fold difference in effective reach vs. cost builds a strong case in favor of the OTT model.

OTT video ads


OTT advertising also offers some key advantages compared to other digital platforms such as YouTube and Facebook. While both YouTube and Facebook offer the target ability of in-market shoppers, the granularity available in the attribution of OTT campaigns is currently not easily duplicated in either of those media. Another advantage unique to the OTT platform is the high completion or view thru rate of the video campaigns which often exceed 95%. This means that OTT video messaging has a high completion rate. Compare this to YouTube with a view completion rate in the 31% range (bigcommerce.com) or Facebook, where the scrolling nature of the format also translates into a low completed view-thru on the video ads.

In Conclusion

The pandemic has accelerated consumption of on-demand content while, at the same time, the capabilities of OTT advertising continue to evolve. While this will eventually be a crowded field, similar to local search advertising, right now there exists a unique opportunity for savvy automotive retailers to use video to position their dealerships with greater local competitive dominance and drive tangible and measurable incremental store sales.


Ed Steenman

Ed Steenman is owner of Steenman Associates that provides traditional and digital media services to automotive dealerships and dealer groups nationally. An internationally recognized writer and presenter on social media and digital strategies, Ed Steenman and his team have been on the 'bleeding edge' of the digital revolution both presenting and implementing digital strategies for a diverse group of clientele. Recent engagements include keynotes and breakout sessions for Volkswagen of Mexico, the Associated Equipment Dealers Lawson Executive Summit in Chicago and others.