The New Model for TV, Talking OTT & CTV, YouTube - Ep. 38

Foreign Hi everyone and welcome to another episode of CPG Insiders. I'm your host, Mark Young with my co host and comrade Justin Gerard. Justin, how are you today?

Oh, I'm fantastic. Always a pleasure to be here with you, Mark.

Come on, it's always a pleasure. You have no idea how much pleasure we just have just hanging out every day. So Justin, I'm going to do a little interview interview today.

Yes, sir.

And here's what we're going to talk about when we talk about television. In today's world of advertising, people have a tendency to think of TV as being abc, cbs, NBC. And then they think of cable, CNN and Fox News and TNT and all the different cable channels, which There are about 700 cable channels, but television isn't that anymore. Television is Amazon and Hulu and YouTube and Paramount and all these subscription services. So television is being fractionalized, but along with that, fractionalization also becomes the ability to become addressable.

Right, Absolutely.

Where we can start to get more targeted. So let's start with some of the terms. So if somebody's looking at TV today, we're going to talk about broadcast. Abc, cbs, NBC, Fox, so on and so forth. Cable, which everybody knows what the cable channels are. But now we have other terms. We have things like OTT and ctv. So tell us a little bit about that. What is ott?

OTT is over the top television. Okay, so when you're thinking about ott, what you're thinking about is exactly what Mark was talking about. You've got your ABC and your CBS and they all have apps now to work with these connected devices. So you can get the CBS or ABC app where you can watch your shows, things like that.

Kind of like On Demand.

Exactly. So that's what OTT is. OTT is your On Demand. But it's done for me.

Watch Blue Bloods when.

Yeah, yeah, exactly.

Okay.

Yes. So your CTV is your connected tv. So your connected tv. The difference between the two is your connected TV goes far beyond just your, your network TV apps. So that's going to be all your devices. So now what we can do is we can connect to Hulu, we can connect to your, your Fubo apps. Fubo is how you pronounce it. Your Sling tv, all of those items.

Roku, whatever the case.

Exactly. That's your connected TV now. So those are the biggest differences now. I mean there's, there's incredible things that can be done with it. So one of the things that I always want to start out with here we're talking about these items and television in general, we'll do, we can do an entire show that talks about TV and how our viewership has changed. Right now we want to kind of stick in this realm. But the biggest thing to understand first is that we all have now the Disney plus and the Netflix and the Amazon. Yeah.

And everybody's got more than one subscription.

All of them.

I mean, you've got Netflix and you've got Amazon and you've got Hulu and you got Disney plus. You got Paramount.

Everybody's on there. Right, exactly. Now the first thing to understand as an advertiser is, well, where can I be so.

Right. Because like I have a Hulu subscription, so I don't get commercials.

Right, exactly. So we're not going to reach you because you're paying for the premium subscription for it.

But a lot of people use the free Hulu. I use the free Hulu and then you get commercials.

Exactly. Or the lower subscription one, if you will, because they're not necessarily free anymore. But yes. So there's a difference between your ad supported, we'll call apps for lack of a better term, and then your Netflix of the world. Right. You can't buy Netflix, you can't buy your Disney plus, all those things.

Right, But I can buy on demand.

But you can buy on demand. You can buy Peacock, that just came out, your Paramount plus, we can buy ads there. So there are ad supported platforms and there is a ton of people on them.

Now why should I buy those? Because from a cost per thousand standpoint. And let me back up folks. When we talk about cost per thousand in television and in all media, we focus on how much does it cost us to talk to 1,000 people in a particular demographic group.

Correct.

Now when we're talking about broadcasting cable, these demographics are pretty broad because the demographics are, well, 1849.

Right.

Or you know, 12, 24 or whatever the case is, 55 plus, 65 plus. When we start to get into these modes, we start paying a lot more for a thousand people, don't we?

You do, you start paying a lot now, now let me, let me kind of back up here a little bit. You start paying a lot more compared to the television that here at our agency we buy. So let's be very clear about that.

Okay, fair point. With our buying power and what we do, we get some pretty great rates.

We we, the way that we're able to buy te television, we're getting CPMs that you cannot get if you're buying on the upfront, if you're trying to buy spot market tv.

Right. And let's be fair. When you buy, when you buy a television and you pay five dollars for a thousand viewers, you're not getting a thousand viewers.

No.

Because somebody went to the bathroom, somebody got up and went to the kitchen, somebody's reading their email. And some people might be using a DVR and fast forwarding through the commercial. Right. This is one of the reasons why here at this agency we're such big news and sports buyers.

Yeah.

Because we realize nobody dvrs the news.

Yeah.

And most people don't even DVR sports. Right. Because I want to see it now. I don't, I don't want to watch it tomorrow because somebody will already tell me what the outcome is in the news.

Right.

And it's been ruined for me. So I want to see it in real time.

Right. But that, that, that doesn't diminish the value of the, the amount of reach and dealership we're able to get. Because you're still going to have some people that are going in and out. True. Right. But again, when you're paying five dollars.

A thousand and we can reach millions.

We'Re reaching millions of people at once. So. So when we're talking about these OTT or CTV connected TV. So your CPMs are going to jump traditionally anywhere from, again, where we're used to buying television. When we're Talking about linear TV, our CPMs are generally in the ballpark of, let's just say, five to ten dollars. If we're really trying to get that younger demographic and a more valuable consumer on CTV, your CPMs are going to be anywhere between, I would say, 26 to $40 per thousand. Now, there is a reason for that. So there is a value. It really depends on your situation because like anything else, the more targeted you get, the more expensive that viewer is going to be. But they also could be more valuable.

To you because less waste.

Exactly.

So let's say that I just got my product into Publix, and Publix is my first retailer.

Yep.

My first retailer.

Yep.

They have about what, 1200 stores.

Yeah.

1400, Florida and Georgia.

Exactly.

And I want to advertise my product that's in Publix.

Yep.

It doesn't make sense yet necessary for me to advertise 50 states across America because I'm only in one and a half states.

Right, right.

So these addressable TV models allow me to go after that group of people.

Exactly.

And it allows me to do it without having to buy local tv.

Yes.

Because so as an example, there is still local television. But if I was to buy a local TV in Florida, Florida has, what is it, seven or ten DMAs?

Ten.

So I would, if I wanted to buy ABC primetime in Florida and I wanted to buy locally, I'd have to go to 10 different television stations and negotiate a deal with all 10 of them in order to get my spot to air there. And they would not all air the spot at the same time. Nope. Because it would be whatever's working for that station. But with a CTV or an ottoman, I can run my spot in Florida and cover that whole state of Florida and cover that piece of Georgia, whatever it is I want and I can reach those people. Now let me ask you this. I'm in Publix, I'm not in Walmart yet, and I'm not in Kroger and I'm not in the other stores. Can I get even more granular? Can I say, okay, let's just show this to people who live five miles from a public store.

Not only can you get that granular to say, hey, I only want to target a five mile radius around the public store, but we can target only people that shop at those publics.

How do you know that?

So through data partners and a lot of these different platforms have different data partners that they partner with, but they are able to track their purchase behaviors and their location behaviors through their phone. So we can track, we can target people. And depending on how well in the audience you know, we can target people by how many times they shop at the stores. We can granular target based on, well, you know what, I know my consumer, for example, really only shops Friday and Saturdays. Fine, we'll get the people that shop there only on Friday and Saturdays if that's what you want. We can target people by how much they buy. So we can say, hey, they shop here frequently, but they also, they buy a lot of stuff when they're here. If we think that it's valuable to have a higher rank consumer.

Okay, so I'm selling a product that is a family size food product.

Yes, sir.

So I'm going to say, okay, so I want people who go to publix at least two times a month or three times a month and who spend over $100 or $150 so that I'm more likely to be tilting toward a larger family.

We can target just those people. We can granularly target just those people. We can even target people. So based depending on the category. So let's say that you're a premium product in a category that has different classes of product. So we can target competitors. We can target people who are buying competitors of yours that you want to go after and steal market share from. We can do that.

Okay, now talk to me about YouTube. Now YouTube is becoming television today.

It is.

So it used to be you watch YouTube on your phone, your iPad, your computer, but now more and more people are watching YouTube on their television set. Because more and more people now have a smart TV.

Yep.

Which is becoming commonplace. So I watch YouTube all the time. I watch YouTube on my 60 inch television. I'm not watching it on my, you know, my 5 inch phone. I'm watching on a 60 inch screen.

Yep.

And the quality of what I get on YouTube is amazing. So, I mean, the videos are, they're not grainy, they come out tremendously good. But when I'm watching YouTube, an ad pops up and it says, you can skip this ad in five seconds.

Yep.

Now some I can skip in five seconds, some you can't. I can't skip what's going on there.

So what's going on there? Is it depending on your buy? So there's different ways to buy YouTube. You can buy pre roll, you can buy in ad. You can buy an ad based off of the skippability. So you can say, hey, I'll allow skippability after three seconds, I'll allow skippability to five seconds. Or I'll buy the ad and say, no, I don't want people to be able to skip my ad. All that happens is you're gonna pay more for an ad that is not skippable for every impression. That's it.

Okay.

Now what we can do on the beauty of YouTube is when you think from a targeting capacity, there are so many different ways to target because Google bought YouTube. So now we can target based on topic, we can target based on keywords, we can target based on content they've consumed. So let's just say that, for example, if you're leveraging a celebrity, that maybe it is an influencer that's in YouTube a lot or has a lot of videos within YouTube. You can target people that engage in their content. You can target people that engage in similar types of influencer content if you want to.

So if I was selling my new Cajun spices.

Yep.

I could Target Emeril Lagasse's YouTube channel.

Yep.

And so I know now that people who are watching Emeril Lagasse like spicy food and they like Cajun food and they go and they click on his new recipe, and before they see his recipe, they've got to watch my commercial on my new Cajun spices.

Yep.

Or maybe halfway through the video, my commercial of my new Cajun spices will pop up.

Right. And remember that YouTube, like you said, they have a lot of longer form videos and even television shows. So there are commercial breaks in the shows.

Oh, absolutely.

So there's a lot of different ways that you can buy on YouTube now.

Now we're also learning that long form is working on YouTube.

Yes.

What we used to do in this agency, we used to produce a lot of infomercials, but infomercials, and the reason infomercials work so well, they were 30 minutes long, 28 and a half minutes. What made them work was the fact that people would get up on Sunday morning, pick up a remote control and they'd start clicking. They'd start at channel two and they start clicking north until they found something that caught their eye and then they would watch it. So a 30 minute infomercial was really three, eight minute selling loops with an offer. Yeah, because you never knew where somebody was going to come in the loop. Well, the infomercials aren't working today because when was the last time you got up and grabbed your remote control and look for something to watch?

I don't remember the last time I did that exactly.

Because you have Hulu, you have Amazon, you have Netflix, you have On Demand.

I can control the content I'm going to engage in.

You have stuff that's recorded to your dvr. You don't need to go hunting for random programming because you can find the programming you want. So you're not likely to fall upon an infomercial. However, long form ads on YouTube are starting to really make sense. We're seeing a lot of Tony Robbins has a great one running right now where I go to watch a video and Tony pops up. Everybody, this is Tony Robbins. Are you looking to do this, this and this? Do you wish that you could get out of a rut? Do you wish know your life was so cool that you'd be as cool as me? Well, if you want to be as cool as me, hang with me for the next five minutes and I'm going to show you how to be as cool as Tony Robbins right now. People. What's so great about this is the people who are not interested in being as cool as Tony Robbins skip the commercial. Right. And Tony didn't have to pay for that. No, the people who do want to be as cool as Tony Robbins. Stay with it. Yep. Tony pays for that view, which is probably about 12 cents. 10, 12 cents. And now Tony's got them for the next 2, 3, 4, 5 minutes of being able to tell his story.

Yep.

This works really well for products that are more complicated.

Yes, yeah, absolutely. And just like you're talking about, think about the majority of users that are in YouTube. Okay? When you're going to YouTube, you're going there to engage, you're going to discover in content. So many. And that's what's fantastic about the, the medium is that you can target keywords, you can target the viewership you want and you'll understand that, hey, these people are looking to discover this information. So you shouldn't be afraid of something that's long form because that's what they're there for. They're there in search and create a video asset that educates them on the topic they want. They're not going to go anywhere as long as it's a great asset.

So I think the big thing to come away from this, folks, is you still need a great TV commercial, you still need great video and great work. It doesn't change how you sell something.

The foundations of advertising are not changing.

What we're changing is the technology. Instead of saying, let's go randomly advertise to 3 million people, we can say let's go advertise to one person at a time who meets the certain criteria, who shops in this certain door, who has this certain behavior, has this income, has this, whatever the case is, likes watching Emeril Lagasse videos, likes watching videos about auto racing, whatever the case is, we can super, super granularly fine tune them and then deliver them a video message which is practically addressed to them.

Yeah, absolutely. And the other thing to remember too here, folks, because in what we've talked about here, especially when we were talking about the OTT and ctv, is that we really talked about the granularity of the targeting. So I want everyone to understand that if you have a brand that has massive national distribution right now and leveraging the reach of television, absolutely makes sense for you because that $5 CPM across the country is getting you what you need. That doesn't necessarily mean that, well, I don't need any technology like this because this is a way that you can really, you can really drive through a lot of the noise and hit the audience that you want. This is also a way that you can say, hey, I've got this really successful what we'll call tactic and Television. Now, do I need support in certain areas? Does Walmart need a little more love or does Publix need a little bit more love? I can do that. Also, you can layer, you can layer the CTV or OTT buy with your television and use it as added frequency. Yeah.

And the other thing, as he was just saying, as Justin just said to you, when we're running a national buy, we might want to say available at Walmart, Target, Kroger, cvs, Walgreens. But it doesn't make sense for us to start putting Publix, H E B Meyer, Harris, Teeter, right? It doesn't make sense to load your national TV commercial up with all of these regional brands because there'll be so many brands in your spot that the consumer won't be able to find where to shop for it.

Right?

So all of a sudden I have a spot on Fox News that says find it at Walmart, Walgreens, cvs, Target, and Rite Aid. But now I have a spot in Florida that says find it at Publix, Walmart, cvs, Walgreens in Detroit, it says find it at Meijer, Walmart, cvs, Walgreens, Target, Rite Aid in Texas, it says find it at HEB and Walmart and Target. So we can really fine tune the tagging to get specific for the account. And here's another little thing. Regional accounts always feel like unwanted stepchilds to companies that are doing national advertising because they always want to be in the ads and they never get to. This is now a chance for you to go to that regional account and say, hey, we're going to run TV commercials just for you.

Right?

We're supporting Publix, Heb, Meyer, Harris, Teeter, whatever the brand is, we're going to support you specifically.

Exactly, exactly. And for. And for the brands that are working with smaller budgets and trying to see how do I maximize the dollars that I have. The nice thing about some of these more addressable TV options is that unlike your traditional linear tv, that the cost of a spot is the cost of a spot. It is what it is, right? To be on this network, it costs this much money or that much money, whatever the case may be. We can customize how much money you need to spend based on what your goal is. So it doesn't mean that if I want to run a national buy and just throwing out a number. All right, great. So based on your goals, you need to spend 150,000. That's just the way it has to be. Not the case with CTV or YouTube or addressable TV. We can say, great. How much money do you have? Not a problem. We can make this work. Yeah.

And it's not unusual for us to get a call from a client that says, hey, our Walmart numbers are fabulous, but we're struggling a little bit at Meijer or wherever. I'm using Meijer as an example.

Yeah, exactly.

So we're struggling a little bit at Meijer. We need a little extra love over at Meijer because we really. We're selling a piece a week. We want to be a piece and a half. We need to push Meijer up a little more.

Right.

Great. Here's a little splinter by focused on Michigan, Ohio, Kentucky. That's literally addressed to only people who go to Wall or go to Meijer.

Right.

Who live by there, who their phone has been there. And that's what we're doing, folks. We're tracking where your phone goes. Yes. That's how we know you've been there, because your phone went there.

We're also tracking your purchase behavior. So every time you use a debit card, we get that information.

So it's creepy, but you're being followed.

You are.

So all those apps on your phone, when you open up, when you have Facebook on your phone, the weather channel on your phone, I mean, Twitter, we can go on and on and on. All those apps are following you wherever you are, and they report that data. So now we know that this person has been in a Myer store.

Right.

Every 14 days, roughly every two weeks, this person goes to a Myers store.

Right.

And their debit card data tells us that every time they go there, they.

Spend 140 bucks and exactly what they buy. And you think about also, I mean, we're talking. We talk a lot of grocery here, but let's talk about something that. Where we. We know there's a real distinction in the shopper drug. If you need to move cvs, if you're trying, if you're wasting impressions on a Walgreens shopper, they're not going to CVS to buy that product.

No. 86% of a wall. 86% of Walgreens shoppers are ded will not go to another drugstore.

Exactly.

So only 14% can you move.

Right.

CVS customers, I think, is 82%. They're not quite as loyal as Walgreens.

No.

But still, it's only 18% of people that you could get to go across the freaking street to go to the other drugstore.

Exactly. So this way we can make sure we know they shop at that Store. And that's where you need to move. That's the only people we're talking to.

So as complicated as all this sounds, we're actually living in an amazing time right now. It's incredible because everybody was concerned, oh my God, television is dead.

Right?

Nobody's watching tv. Let me tell you, television viewership is more than it's ever been.

It's through the roof.

We just have to keep in mind, we have to redefine what a television is.

Yes.

A television is a 60 inch smart screen. It's an iPhone, it's an iPad, it's a laptop. Because television is where do people watch video entertainment.

Right, Exactly.

And how can you get your message there? But we can now get that message. They're so highly targeted and so focused. And the last thought I will leave people with, and that is this is one of the ideal tactics for a company that's, that's just getting into retail. And they're getting a 200 store test at Walmart or 600 store test at Walgreens. We can get that list of test stores. We could target the customers to go to those 600 stores and not throw money away on the other, on the rest of the country.

Right.

We're just going to focus on these 600 Walgreens stores where your product is.

Absolutely. And especially if you have a very niche product or if you have, if you're going after a consumer that is truly in high demand, this is a way that we can really, really highly target and reach only those people. If you've got a tight indication that there could be potentially a lot of waste, we can track the content that they're looking into to determine. Yep, these people are researching this indication or are buying products that are in the same realm. So we know that they, they are in a need state for your product. We can do that.

So I think when we come back for our next show, I'm just thinking here we should pick this show up and talk about native ads, Internet, native ads. And how again, we can become so freakishly targeted with somebody's behavior because we've talked television. Next show we'll talk about just how we can target people on that phone in that online environment.

Oh, it's insane.

So as always, folks, if you have any questions about television or OTT or CTV or anything that we're talking about, you can always get a hold of us. Go to jekyllheidlabs.com or to the website for the show, which is cpg insiders.com and you can always get a hold of Justin. You can get a hold of myself, Mark Young. And there's lots of other people here that are happy to take calls and answer any questions that you have.

Absolutely.

That's it for this week. We'll see you on the next episode of CPG Insiders. If you're looking to greatly increase sales on your CPG product, don't hesitate to contact us at Jekyll and Hyde Advertising and Marketing, by the way, the only advertising agency with a guaranteed result. Just go to jekyllheidagency.com or feel free to give us a call at 800542. Sam.