CMO Strategies: Marketers say demographic data is most important for ad targeting on streaming platforms

This article is part of a special research series on where CMOs are investing. More from the series →

This is the fourth installment in Digiday’s multi-part series covering the top ad-supported streaming services and part of Digiday’s CMO Strategies series. In case you missed it, the first installment provided an overview of the various platforms’ offerings, including pricing and plans, ad options, and new ad formats, along with our methodology. The second installment examined which platforms receive the bulk of marketers’ ad budgets and ad placements. And the third installment uncovered which ad attributes matter the most to marketers on streaming platforms.

Advertisers lean on demographic and geographic first-party data for ad targeting

When advertising on ad-supported streaming platforms, marketers have to determine the types of audiences they want to reach and what types of audience data are most important to have to achieve their goals. 

According to a recent survey conducted by Digiday+ Research, the vast majority of advertisers (81%) said it’s more important for ad-supported streaming services to offer premium or targeted audience reach capabilities than it is for them to offer higher total audience reach (chosen by 19% of respondents). 

Interestingly, that’s an increase of 21 percentage points for premium or targeted audience reach capabilities in 2024 vs. last year, and a decrease of 21 percentage points in 2024 for total audience reach capabilities — indicating that advertisers’ desire to reach specific audiences has only grown stronger during the past 12 months.

Targeting a specific audience is important to many brands because doing so gives them the ability to focus almost exclusively on the part of the market they’re trying to reach. As a result, the return on investment may be higher because they’ve presumably spent their marketing budget efficiently, targeting only the consumers they know are in the market, or fit the specific demographic, for their products. 

“We lean towards FAST channels and subscription services that align with content passions, as our audiences are within the value segment,” Verizon Value’s CMO Cheryl Gresham said in an email. “The most important thing is to always be reaching new qualified audiences, therefore, finding incremental reach to complement linear, like we do for [our brands] Straight Talk and Visible. Or, taking a streaming-first approach to align with viewership behavior to maximize time with the consumer is key, for [our brand] Total by Verizon.”

Harry Browne, vp of media innovation at performance marketing agency Tinuiti, said that for smaller, younger brands, niche targeting can be an effective tool to capture existing consumer demand for a product and to meet a brand’s short-term financial goals. But as an advertiser’s business expands, targeting goals can shift. 

“Once you start to think about growing brand awareness and creating future steady growth for your business, broader targeting becomes more important,” Browne said. “Nobody can afford to gather up only the low-hanging fruit. … There’s always a place for an advertiser to do some form of niche targeting because there’s always going to be a set of demand to easily gobble up. But, it’s equally important for an advertiser to think about growing their future, so that broader reach is always going to be important as well.”

As advertisers consider how to best reach their intended audiences with targeted ads, and as deprecation of the third-party cookie slowly becomes a reality, (and we mean very, very slowly), first-party data reserves are increasingly becoming a crucial selling point for platforms to attract advertisers.

“The deprecation of third-party cookies has a lot of bearing on our ability to do targeting in some of these [ad] environments,” Browne said. “We have definitely encouraged clients who have resources of first-party data to try to leverage that, particularly in their programmatic buys, but also in their streaming service buys.”

The majority of brand and agency respondents in Digiday’s survey (65%) said that demographic information, including age and income level, is the most important type of first-party data reserves for streaming platforms to have for ad targeting. Geographical information, such as the city or region a viewer is located in, was the next-most important first-party data type — 47% of respondents selected it. Meanwhile, websites visited and actions taken, such as purchases and browsing patterns, was almost equally as important as geographical information — 43% of marketers chose this response.

Verizon Value’s Gresham said the type of first-party data that matters most for ad targeting varies based on the brand-consumer relationship. “For example, for Straight Talk, which is our Walmart-exclusive brand, we look at retailer data and shopping behaviors to identify the Walmart consumer as a baseline, with switching indicators and demographics to refine,” Gresham said. “For Total by Verizon, which is a brand with a high concentration in urban areas, we look at location data relevant to store footprint and multicultural demographics.”

Tinuiti’s Browne said customer lists play an important role that varies depending on campaign goals. “Customer lists are really useful to exclude existing customers for campaigns trying to gain new ones and vice versa. It’s useful to be able to target specifically existing customers, if you’re trying to fight against churn or resuscitate turned clients,” Browne said. “Demographic and geographic information are other really important pieces of information. It is just uniformly helpful to know who your customer is, and be able to target people like them. There are very few advertisers who have so saturated a demographic that they can’t get some advantage from targeting their existing customer demographic.”

But successful ad targeting, regardless of first-party data type, can be a fine line to walk for both advertisers and platforms. Some viewers are turned off by targeting that feels too precise while others find irrelevant ads more annoying. And data privacy is an increasing worry for most consumers.

Ad-supported streaming platforms collect first-party data for use in ad targeting in a number of ways, depending on their size and whether the platforms are smart TV-based streaming services or owned by larger media companies.

Platforms owned by larger parent companies have the advantage of accessing large reservoirs of first-party data spread across media properties. Google’s YouTube and Disney’s Hulu and Disney+ Basic (with ads) have the largest first-party data reserves compared to other platforms, and they rely on those reserves and in-house tech stacks to appeal to brands and target ads. Similarly, NBCUniversal’s first-party identity platform NBCUnified consolidates first-party data across all of its media properties, including Peacock, and across NBCU’s data clean room.

On the other hand, smart TV-based streaming services like The Roku Channel and Samsung TV Plus use first-party data collected during device registration and through automatic content recognition (ACR) technology built into smart TVs for ad targeting.

Jordan Rost, The Roku Channel’s head of ad marketing, said there are several ways platforms can address consumers’ data privacy concerns. “The first is being transparent about any information that is being collected with clear simple language on what’s being collected and how it’s being used,” Rost said. “Second is control over how that’s being used and what’s being shared, and third is a clear value exchange. So, if I’ve [the viewer] provided my information to you [the platform], demonstrate the value you’re giving back to me in exchange for that sharing.”

“One of the features that we enable with some of our data sharing is the ability for our platform to make recommendations about what to watch next,” Rost added. “So if you [the viewer] provide a little bit of information about what you’re searching for and browsing, we can help you find other shows across all services that map to your interests and your preferences.”

Roku recently expanded its data collection capabilities by partnering with e-commerce platforms like DoorDash, Shopify and Instacart on shoppable retail media action ads. “That has enabled us to say not just what percentage of an advertiser’s audience bought a product, but to use that [information] for consumer insight to say ‘people who buy a certain brand of soft drink, what types of content are they watching,’ which presents interesting media buying opportunities,” Rost said. “Understanding a holistic view of consumer behavior across all media types, and being able to tie that to real-world commercial behaviors has been really powerful for advertisers.”

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