There are four different types of video viewers, says Roku: cord-shavers (who have trimmed their pay TV bills, but still have pay TV), traditionalists (who enjoy pay TV), cord-cutters, (who said sayonara to pay TV), and cord-nevers (who never had pay TV in the first place).
Those first two groups still have cable or satellite service and can be reached by standard commercials. But those last two groups are a challenge.
Speaking at the Audience x Science conference in Jersey City, New Jersey, hosted by the Advertising Research Foundation (ARF), Dan Robbins, Roku’s head of ad research, offered tips for reaching those unreachable viewers. It starts with understanding who they are.
For starters, the unreachables enjoy different content. Cord-shavers and traditionalists like sports and news, which they watch live. But cord-cutters and cord-nevers have less interest in live news and sports. They’re more about on-demand entertainment. Since they’re friends with other people who don’t have pay TV, they don’t hear word-of-mouth recommendations for network shows. They think cable has to many fees for the value it offers, and they find streaming apps easy to use.
But just because people cut the cord doesn’t mean they watch less TV. Roku finds that people stream three times as much video after they cut the cord. They still want the same programs, Robbins said, but without the expense of pay TV.
After surveying over 14,000 active customers, Roku found that these so-called unreachables are surprisingly willing to watch commercials. Ad-supported channels are the fastest growing category on Roku, and “free” is the most searched-for term. Also, 87 percent of its users aren’t willing to pay to avoid ads, and millennials are 20 percent more likely than baby boomers to watch ads if they get free access to movies and TV shows.
These findings led Roku to debut the Roku Channel last year, which now offers free access to TV shows, movies, and live news, with no pay TV authentication required.
As a takeaway, Robbins offered advertisers three key learnings from Roku’s research:
- Streaming is now a mainstream activity enjoyed by people of any age.
- Ad-supported and free content has a place in the OTT world.
- Cord-cutting is done more often by younger people and those open to new ideas.