The number of consumers shedding their pay TV subscriptions is accelerating, and that’s a concern in an industry still heavily reliant on traditional TV advertising.
Cord-cutters are set to grow by 32.8 percent in 2018, according to a revised estimate released by eMarketer earlier this week. It puts total cord cutters at 33 million U.S. customers overall, or 12.9 percent of the population. eMarketer also upped its viewership projections for streaming services like YouTube, Netflix, Amazon, Hulu, HBO Now, and Sling.
The rapid change in consumption habits will increase pressure on political advertisers to adjust to an environment where consumers can watch what they want, when they want, while not being confined to the boundary of their home.
DSPolitical’s Mark Jablonowski said there’s little doubt the value of over-the-top (OTT) platforms will continue to increase. But for advertisers, there’s still much to figure out.
“That’s why it’s important to have the technology and the capability to match against OTT inventory and do it at scale, which is something where the technology is rapidly evolving,” he said.
Getting to scale is one of the biggest hurdles for advertisers right now. The myriad of providers means targeting methodology varies depending on the service. For some, devices are able to match on email addresses or user names, for others on IP addresses.
None of the strategists C&E asked were surprised by the acceleration of cord cutting, and they universally predicted it will continue.
The chief concern, according to one Republican digital strategist, is that this isn’t a 1:1 transfer. Consumers aren’t moving to a new targeting location intact, which makes many of them significantly harder to reach with any sort of efficiency.
“In the beginning, the early adapters are always gen-Xrs and millenials, but now we’re seeing that baby boomers are the fastest using ownership class, because the device prices have been so affordable,” noted Kate Holliday, political sales director at the ad tech company RhythmOne.
By 2021, eMarketer expects 50 million will cut the cord. A sizable increase over what its forecasters predicted just last year.