In our latest conversation, Brett Hall, VP of Sales and Marketing at EMG, discusses how to succeed on connected TV and streaming.

What are dealers doing to differentiate their brand?

We are seeing, probably for the first time in four years, is a more balanced equilibrium between demand and supply in the space.

Of course, when COVID started, there was a lot of just fear and a lot of marketers pulled back. They weren't sure what was going to happen, or I should say dealers pulled back on their marketing. Then of course, we had the supply chain crunch, thought that was kind of out of the woods and then you have interest rates. There have been a lot of distortions in the market.

What we're observing is dealerships have to be competitive again, and they have to think strategically about moving inventory, basically as they did in pre-COVID. It's no longer the case, they can just have a car, sell it, and at a markup. They have to be better and more strategic.

So we see dealers really leaning into now, and it's a primary benefit of the space we operate within streaming is, that they're being much more strategic with an audience-first strategy. It's not just about put the ad out there and I want to try to have a certain number of channels or apps, that don't exist, we can talk about in a minute within the streaming space. We want to be much more strategic in aligning a creative message with an audience that we can resolve and target within the streaming ecosystem. They're being much more diligent about flighting creative to a certain audience at a certain time and being good about giving us different creative to manage that aligns with the things and the capabilities we can do.

And we're seeing various outcomes from that, whether it's more awareness of the dealership or the brand, more lead generation, more foot traffic, and increases in market share. Now they're really able to spend their dollars very efficiently and get more traction or more bang for their buck with that enhanced top of mind strategy, which again, is going to be an audience first strategy that is accommodated within the streaming ecosystem.

The value of connected TV and streaming.

We are continually surprised by either the lack of awareness or just the lack of inclination to really fully take advantage of the precise targeting options that exist in our space. It sometimes comes as a shock is, you know, we're not just going to be able to target a demographic or use, let's say a particular app or set of inventory, meaning ad inventory to get in front of a certain type of demographic and audience. We really can just go right after the person who's in market for a car right now, by class, by type, by model, et cetera.

And that's what I was saying earlier about really, because now the inventory is starting to stack up because they're starting to feel the pinch. They're really leaning into, they have more pain, they have more pain. And so they're more, they being the larger kind of ecosystem are more interested in leaning into those capabilities and those conversations in a way that we really hadn't seen before.

And so now the, the demand for the capabilities catching up to the actual capability that's existed for some time, but that is a huge, that is the differentiation between streaming and traditional, the targeting and the attribution that comes along with it.

How should a dealer approach advertising on connected TV?

In most cases, what we'll call it the, the demand ecosystem, those that are spending the dollars, whether that's an agency or a dealership or a group or an ad association, the way that they would articulate a strategy, what they want, what they're hoping to achieve largely was rooted in the tactics that you would use in traditional advertising.

So that might sound like this, I'm interested very kind of prototypical, stereotypical example. I'm interested in selling more trucks on my lot. Men generally buy more trucks than women. I need to get in front of men. I need to be on ESPN plus, just as a really simple example.

And what, that's the surprise factor, which is, you know, we actually are flipping it. We're not using the app, the content, the inventory to try to get in front of a certain audience using demographics. We're actually first creating an audience it's, you know, it's an audience for strategy. We are creating an audience of consumers who we believe with a high degree of confidence are in market for the type of car you are selling right now.

And we are going to activate that audience. We're going to target that audience into an array of streaming apps and ecosystems that independent of what we think about that alignment, meaning you're trying to get in front of men, but the Bravo app is streaming the bachelor doesn't matter.

We believe a car shopper, we know a car shopper because of our audience is streaming a certain piece of inventory or content. And we are going to let the data, the audience drive where and how we buy certain streaming inventory.

We still get this question a lot. Why is this app inside of my targeting mix? If I'm trying to go after this type of consumer, right?Maybe I'll mix it up a little bit. Why am I seeing a Bloomberg TV, which typically you would think is more going to attract and engage an affluent high net worth individual? Why is that in my mix when I'm selling an economy sedan? And it's like, well, you know, someone who doesn't, you know, who makes, you know, the median income who, you know, has a, has a good job, but not, you know, some crazy C suite one is really interested in financial news and they watch, they watch Bloomberg. You know, we can't really control that.

What we can control is getting that message with that audience in front of them at the right time.

And so to answer your question, it's hard to say if it's a lack of awareness or it's so rooted that their belief system is so rooted in, in how TV worked before and how targeting worked before. And so it, I think without sometimes they even knowing it just assume, well, that's how it's going to work here. You know, it largely is the same consumer experience.

The huge difference is what's happening behind the scenes because it's connected to the internet. We now can take advantage of all the digital technology and capability that allows us to do targeting, allows us to be audience first.

And so really moving their understanding and really stressing that this isn't ethereal. This is possible. It will create wildly better results and there is immense opportunity and value to be found if you can break away from the old way of doing things or the way that they were done in traditional.

How does a dealer get started?

Well, the short and the simple answer to get started with us in this space is actually pretty simple. We need to know what your dealership is literally just the name and the address. We have every dealership in the country franchise dealership database in our ad system.

We then would need a piece of creative to flight and that's where our agency partners come into play along with giving us other inputs along strategy that's happened in other ecosystems. So there's parity and synergy between them.

And then using the vast amounts of data, both public and that we've curated over the last seven years, we create a tailored strategy for your dealership.

So I'll unpack that a little bit. I'm sitting here in Orange County, California, more specifically Irvine, California. There are two Mercedes dealerships about four and a half miles away from each other. Same PMA, certainly the same state, the same county, practically the same city. They're four and a half miles away, but because we have database and are understanding things like what's your sales footprint, what's the OEM, where and how much do you sell cars outside of kind of a general footprint of your backyard, historical trends, foot traffic, all the media data that we've collected. We're able to prescribe two very different strategies to the same OEM practically in the same city.

It's because they have, like I said, different characteristics of, let's say, how many cars they sell, how far away do people come to their store? The two stores I'm thinking of specifically, one's kind of the Mac daddy that everyone goes to practically if they want a Mercedes. The other one is sort of a little brother. The strategy that both of those stores need to employ is very different.

And so what we try to do is understand where each dealership is today, and then reflect back to them a strategy that will help them move market share, traffic, increase sales, increase web traffic, et cetera, prescribed to who they are and where they are right now, with the anticipation and the hope that we can help improve your overall position in the market.

Transitioning from traditional to connected TV and streaming.

I think a lot of times, brands, dealerships, associations, they sometimes overthink it. They think that because now we're in a connected ecosystem, a streaming ecosystem, that the ad experience is wildly departed or different from what they're doing typically already in traditional.

And so where we kind of help make them comfortable and dip their toe in the water, we typically start by saying whatever ad, whatever video you're using in traditional, let's start with that. Let's start with that because while we're starting with the same creative, which generally is pretty good, like it's been well-produced, it's well-made, it has a good message that's been honed over years, we're keeping that the same, but then what we're changing obviously is what we're doing with that creative.

We're employing an audience-first strategy. We're able to figure out where we should be buying ads based on where people are streaming, who are in that market, how that we can target them using all the different controls that exist and even better, we can report on what happened when they consumed an ad that we put in front of them. What did they do? Did they go to your website? Did they go to your dealership? Did they go to someone else's dealership? Did they buy? Is your market share moving? Is it down? Is it up? All of that because again, at the end of the day, it's connected, it's internet-based, it's internet-enabled, we get the benefits of digital.

So I like to say the consumer experience is largely the same. There's obviously a difference in how you're consuming the content.

You're turning on your smart TV, let's say a Roku. You're hopping into an app, not a channel like Hulu, and you're typically pulling up a video-on-demand library. Sometimes you're watching TV live, but we'll kind of save that for another day.

So from a consumption standpoint, it's a very similar experience with the added benefit of I get to watch what I want, when I want, but from a marketing, from a targeting perspective, it's a whole new world of opportunity.

Reporting and attribution.

With our history as a company with direct response advertising and just having very outcome-based kind of approach to any marketing ecosystem, including streaming, that was key for us, and we use that old adage, you can't manage what you can't measure.

So we fundamentally approach the space with the premise, we have to be able to understand what is going on and the impact that we're having, good or bad, or neither, on the market that we're putting that message in front of. And so there's been an evolution, no pun intended, in what we've been doing, what we're able to track, and principally that starts with so that we can understand the true value and impact that our marketing is having on behalf of the dealership.

And so very kind of reductively and practically having accurate, truth-seeking attribution, not just producing the biggest number that you can or an inflated one, but really getting a good grasp on what is happening once I put my message out there.

Let's just start with how many homes am I reaching? How many of those homes are taking an action? How many of those homes are taking an action that tells us we're swimming in the right pond, but they're actually not visiting or engaging with the dealership that we're supporting? What's going on here?

And then we can, because again, it's all digital, we can have a very precise understanding of what's happening, what's called a bid stream level without getting too technical, but every single impression delivered on connected TV has data and metadata associated with it. We can take that and really get a fundamental understanding of what's going on and then optimize to it. We can separate the wheat from the chaff as it exists from an audience standpoint, from inventory, this inventory is not working very well, we got to cut it, we got to bid less for it and so on and so forth.

And so we think of attribution as really the foundation that everything else we do is built on. It's how we know if we're doing a good job of getting in front of the right audience. It's how we know if we're doing a good job of not only buying inventory, but at what price is it worth buying because we can extract what kind of value it has. Which devices at which time of the day make the most sense to put a message in front of someone?

All of this is available if you look and have more importantly, a foundational accurate attribution framework and system in place. From there, so really for us, step one, get attributions, choose, seeking and accurate. And then from there we can do a lot.

Step two, or really value number two is, okay, now we have a really clean way of optimizing or we have a really good feedback loop so that we can optimize our campaigns.

Number three, second part of your question, reporting. That attribution now can be turned into customer facing reporting to give them an idea of how it's going. And what I would say is what we're trying to do is a lot of the reporting that we studied when we kind of entered the space, would say it really told the story of what we did, not how did it work.

And we try to get to the bottom of, here's what we did.

Here's how many households we reached. Here's the creative that we did. Here's how many impressions you've got. Here's all the inventory mix you had. This is the audience we targeted. But more importantly, here's what happened when we put that message out there.

What is the difference between connected TV and streaming?

And it's kind of evidence to the immaturity of the market, right?

The terms and the acronyms, and even those are kind of all over the place. And what do you mean? What's the difference here?

So at least I can speak for us. So when we refer to streaming, we are referring to any digital medium, any medium, typically the ones that are traditional, so TV and radio, that streaming is the counterpoint to those in a digital landscape, meaning instead of an airwave or a satellite dish or your cable box delivering your content on TV, the internet is now.

Instead of radio waves delivering a signal to your car radio, the internet is.

And so streaming for us refers to specifically connected TV, which I'll unpack in a minute, and streaming audio as advertising medium. So it's sort of an umbrella term that we use. Now sometimes people interchange streaming TV and connected TV.

I'll kind of get to that in a minute. But we generally refer to it as streaming because it kind of captures a few different mediums, like I said, namely connected TV and streaming audio.

Connected TV, which is really the one that's kind of newer and getting all the press and everyone's talking about. Connected TV, as opposed to OTT, which I'll unpack in a minute, connected TV really fundamentally refers to a device that's connected to the internet where the content that's consumed on that device, shows, movies, sports, however you get your content, that's delivered via the internet instead of, like I said, a cable box, a satellite, or a pair of bunny ears. So really it's just talking about how that device, a TV, is able to get content in front of a consumer.

Connected TV, OTT, which again, this is where it's like, oh my gosh, OTT, CTV, what are we talking about here, OTT is really long form content that could be delivered on a TV, but also, you know, it could be delivered to your phone, a tablet, a desktop. We like to talk about connected TV because of the value that it has as a device, as a living room experience on the performance of a campaign, I'll get to that in a second. And so again, connected TV refers to a device that then is able to get content via the internet.

Typically the experience here is I have Roku that's connected to my TV, I jump into it, I see Netflix as an app that I open up and I start streaming Stranger Things, or whatever your show is of choice.

Streaming audio is fairly similar. It's the counterpoint to traditional radio, think Spotify, Pandora, streaming music, podcasting, which is just becoming, you know, ever-present news. Any audio content that you consume, typically on a mobile device or a home device like an Amazon Alexa, is streaming audio. In both these cases, they both are ad-supported, or there's at least an ad-supported constituency within that ecosystem, and that's where we come in.

So we're able to put an ad, you know, in flight to an ad-supported ecosystem like Paramount Plus or Netflix or Disney Plus, which, you know, we can unpack a little bit later. Now, all of these streamers who formerly did not have an ad offering, they do.

And so now there's just this ever-abundance of kind of ad availability that is just opening up so many possibilities for marketers, including dealerships.

What is ad spoofing?

.So you know, taking a step back, once in any industry, you know, I don't care what you're talking about, once it gets to a certain size and threshold, is when the scammers start taking notice. So you have a tiny little industry that, you know, isn't really worth anyone's time, fraud and spoofing and all this other stuff, it doesn't really apply.

For years, your, you know, Apple computer was really not susceptible to bugs or to malware or to other malicious hacker activity, because it just wasn't a very big piece of the market share of computers. That's different now, that's changed because there's so many more Apple computers out there.

So once something becomes big enough, that's when the fraudsters and the spoofers come into play. And so now connected TV and streaming is, I'll try to keep my words, now that connected TV specifically is roughly, we'll call it a $25 billion a year industry. There's a lot of fraudsters who have woken up to, hey, I can go do my thing and fraud unwitting consumers or customers into, you know, my game.

App spoofing is simply a scammer presenting a app as something other than it is. They are presenting that whatever they're selling is Netflix when it's not.

And there's a few different ways you can do this. It's actually not terribly difficult to do if you know what you're doing.

And so now that the industry has gotten so big, it is increasingly becoming a trend to be aware of.

It's one of many different types of inventory issues, whether you want to squarely call it fraud or just non-performance that you want to be aware of.

And so going back to attribution and why it matters, if you have a systematic infrastructure set up that you are tracking the outcomes that your ads are producing, whether it's just outright fraud or just inventory that just isn't producing because people just aren't watching, whatever the reason may be, we would just simply stop buying.

And this is why really a huge takeaway I would say for anyone operating in space, this one or anything else is don't just be reliant on, oh, it says Netflix, good to go. Hey, I'm getting the report that says it's Netflix. Independent if it says Netflix or not, or whatever the inventory might be, independent of what the audience might say, how is it working? Like what are the outcomes it's producing?

And if it's having subpar outcomes based on what you're able to track with your attribution stack, there's a problem.

Whether or not it's app spoofing or something else.

Where are connected TV and streaming heading?

So at an industry level, independent of automotive, and then I'll kind of tie it into automotive, at just a pure streaming level, it's a very exciting time.

I mentioned earlier, every single major streamer now has an ad tier. They are now really actively engaged within this experience. It's interesting, if you look at the history of traditional TV, it started with an ad supported ecosystem first, and certainly with the networks, NBC, ABC, CBS, ad supported. That's how it was funded and subsidized. And then we'll call it in the late 70s, 80s, 90s, you had premium subscription based, the HBOs of the world, right?

No ads, you pay a price, whatever that is per month.

Streaming kind of started with the inverse of traditional TV. It actually mostly started with a subscription based model, we'll call it the premium model. Pay 15 bucks a month for your Netflix account, no ads, stream whatever you want whenever you want.

What's happening now is subscription fatigue. Consumers, including my household, we're just sick of paying for all these individual apps and other content providers, because it's adding up. And so now they've all been forced to have an ad tier, even despite the ones who said they never would, namely Netflix. They're now introducing ad tiers and the adoption rate on those is, I would say, much more and happening much faster than I think anyone predicted because of that fatigue. And so now, the big ones in the last year, Netflix, Disney+, Amazon Prime, those are kind of your big three. They all now have ad tiers.

Not only that, they are now making it very clear, this is a big part of our business. This just isn't sort of this thing that we're doing on the side that generates incremental income or revenue for the business. This is a big part of the offering. And so what I would say now is it is really ushering in kind of that last kind of, I would say, the early adopters have already kind of been in the mix with connected TV advertising. And now I think it's really gonna push that mainstream adoption because now the big brands that people know are starting to come into the space.

And so what I would characterize right now and probably for the next few years, this is the golden age of streaming.This is like Facebook ads circa 2010. They just came online. There's this huge supply of inventory because everyone's on Facebook and getting accounts in the droves, but there's not many marketers there.

The balance of demand and supply from a marketing standpoint and streaming is somewhat imbalanced. There's a lot more supply right now. And what I think is gonna happen the next few years, that demand is gonna catch up. So right now it's just this golden opportunity for the ecosystem, for any marketer that wants to jump in and get involved in connected TV advertising.

What I think is gonna happen specific to automotive is, you kind of keyed into it, 2018, 19, those were the first real murmurings of OTT or CTV or whatever acronym you wanna use. And then what happened? COVID happened in 2020 and all the distortions we've talked about.

And so what's interesting is, as streaming was starting to get momentum and growing, the automotive industry was sort of in this unique time period where in some cases dealerships thought and rightly so, and didn't really spend that much on marketing at all. Why would I? I don't have many cars and the cars I do have, I'm selling for 15, 10, 20% above sticker. I don't really need to commit to an advertising mix. And so when they did, either because they were being strategic and really wanted to understand a new medium, or because they had some co-op money, whatever it was, and they did commit to streaming, my experience has been, our experience has been, the scrutiny over its performance, what it's doing for the bottom line of a dealership really wasn't there because it didn't need to be. It was, you know, the party was rocking.

That obviously has come to an end in the last six months. And so what we're now seeing is there is, rightly so, more scrutiny being applied to streaming and what it's doing for a dealership in a way that we have not seen really since COVID began because of all the dynamics of supply and, you know, everything else.

And so what I think is going to come is the, we'll call it the automotive community is going to start asking and is starting to ask tougher questions and really going to force our industry, streaming for the automotive industry, to really get serious, which I'd like to say we've already been, about demonstrating the value the space is having.

So those are kind of the two big things that we haven't seen and that will, I think, continue to progress into the future.