More consumers are streaming, and platforms driven by user-generated content (UGC) are helping to fuel the shift. Yet not all inventory is created equal.
While the pandemic accelerated the shift to streaming TV, social platforms driven by user-generated content (UGC) also experienced a boost.1 So naturally, UGC has become top of mind for advertisers. These platforms are appealing because they offer mass reach and lower-cost impressions, but not all reach is created equal. In fact, many believe that advertising is only as good as the quality of the content you’re running on.
UGC ≠ TV
For years, leading UGC platforms have been making the case that they are a viable alternative to television,2 with millions of viewers watching on big screens in the living room. But UGC is not the same as TV.
The industry defines premium CTV content as professionally developed and curated — broadcast-TV quality — typically long form or episodic with full-screen creative ads, where consumers choose what they want to be watching. These foundational qualities are what drive these desirable audiences to the big screen every evening.
On the other hand, while the snackable nature of UGC videos does have its value, it is inherently not the same for these very reasons. UGC, in comparison to TV, is made by content creators with varying levels of professionalism; it’s only required to adhere to community guidelines, which are not necessarily brand suitable; it defaults to standard definition; it’s fueled by short-form video bites rather than longer-form or episodic content; and typically the algorithm chooses what content the consumer sees next.
Most consumers agree. In the U.S., only 1 in 3 people (36 percent) say that watching content on one of the UGC platforms is the same as watching TV.3 And the vast majority of content that people view on these platforms is music videos, viral videos, memes, and tutorials.4 It’s a very different consumer mindset than watching TV in the living room.
Premium can drive greater value
When UGC sits behind a walled garden, as many of these platforms are, there can be an inherent conflict of interest. Walled-garden platforms that represent their own inventory could be incentivized to operate in their own best interests rather than those of their advertisers. Plus, platforms driven by user-generated content could leave advertisers vulnerable to running ads against sensitive or inappropriate topics, which can have significant consequences for brands.
Many advertisers realize the risks but feel pressure to invest in UGC strategies for the sake of mass reach and cost efficiency. This logic doesn’t necessarily equate, as premium content can deliver greater value. In fact, studies have proven that Connected TV’s (CTV) premium content typically outperforms user-generated content, offsetting the difference in cost and delivering longer-term value.
According to a study by Kantar and PubMatic, “exposure to ads in premium OTT [over-the-top] platforms improved unaided brand awareness, delivering a 37 percent uplift over exposure on non-premium video.”5 Professionally generated content (PGC) comes out on top when it comes to consumer preference and attention. A recent Yahoo study found that three times as many consumers prefer professional over user-generated content.6 What’s more, according to a ThinkTV study, TV commands around two times more attention compared to UGC platforms.7
Why brands choose The Trade Desk for CTV
Because we don’t compete in content or supply, we’ve been able to build lasting relationships with top networks and content providers, offering one of the largest scaled Connected TV inventory marketplaces in the industry. That means you can run your ads on top-tier premium content across major networks and streaming services, including live sports and high-profile events.
And we agree that reach and cost efficiency matter. If mass reach is your main goal, of course you should consider UGC on your media plan. But if you’re measuring to reach, you’re likely optimizing to low-cost, lower-quality inventory. If quality reach matters to you, you need to consider prioritizing quality content.
Advertising works best when shown in premium media environments. That’s why brands choose us for CTV. That’s also why we’re exploring new ways to help advertisers measure the quality of inventory they’re running on. We want you to be able to distinguish high-quality from low-quality impressions, which can help you better understand the value of your investment. That way, we can support you in optimizing spend towards higher-quality media and help you drive more effective CTV campaigns overall.
To find out more, reach out to your designated account manager at The Trade Desk.
1 Debra Aho Williamson, The US Short-Video Landscape (eMarketer, 2021), https://content-na1.emarketer.com/the-us-short-video-landscape
2 Garett Sloane, “YouTube Tells Brands ‘Let’s Get Seasonal’ in NewFronts Pitch,” AdAge, April 20, 2021, https://adage.com/article/media/youtube-tells-brands-lets-get-seasonal-newfronts-pitch/2329436
3 Rune Werliin, Insights 2020: Traditional TV and Streaming (AudienceProject), https://www.audienceproject.com/wp-content/uploads/audienceproject_study_tv_streaming_2020.pdf?x92029
4 L. Ceci, “Most popular video content type worldwide during 3rd quarter 2021, by weekly usage reach,” Statista, January 2022, https://www.statista.com/statistics/1254810/top-video-content-type-by-global-reach/
5 Susan Wu, “Video Advertising Efficacy in Premium OTT and Non-Premium Video Environments,” Kantar and PubMatic, 2021, https://pubmatic.com/wp-content/uploads/2021/04/PubMatic-Infographic-Video-Advertising-Efficacy.pdf
6 Yahoo, cited in Emily Dalamangas, “Why Not Maximize the Value of Your Inventory Through Premium Ad Experiences?” AdMonsters, December 13, 2021, https://www.admonsters.com/maximize-the-value-of-your-inventory/.
7 ThinkTV, The Benchmark Series: Overview, https://thinktv.com.au/facts-and-stats/the-benchmark-series-summary/
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