CTV emerges as key channel for engaging black American audiences, study shows

LG Ad Solutions this week released a report titled The Inclusive Screen: Black Americans, shedding light on how Connected TV (CTV) is reshaping advertising strategies for engaging Black American audiences. The study, based in Mountain View, California, surveyed nearly 1,500 Black and African American CTV users, uncovering significant trends in viewing habits, ad responsiveness, and content preferences that could revolutionize how brands connect with this influential demographic.

The report's findings come at a crucial time for advertisers and marketers. According to a McKinsey study, Black American consumers' collective economic power is projected to grow dramatically, from approximately $910 billion in consumption in 2019 to an estimated $1.7 trillion by 2030. This substantial increase in buying power underscores the importance of developing effective, culturally relevant advertising strategies that resonate with Black audiences.

One of the most striking revelations from the LG Ad Solutions study is the high level of engagement Black CTV users demonstrate with advertisements. Nearly half of the surveyed users reported visiting a website after seeing an ad, while 29% went on to purchase a product, and 24% visited a physical store. These figures indicate a significant opportunity for brands to drive tangible actions through CTV advertising.

The study also highlights the pivotal role of the TV Home Screen in content discovery for Black American viewers. A substantial 44% of respondents cited the TV Home Screen as their preferred source for content recommendations, surpassing app homepages (41%), recommendations from friends and family (37%), and social media (33%). This insight provides advertisers with a clear direction for optimizing content placement and visibility.

Another key finding relates to the perceived relevance of CTV advertising. An impressive 63% of Black CTV users found streaming TV ads to be more relevant than traditional TV ads, a figure that is 30% higher than the total population. This statistic underscores the potential for highly targeted and personalized advertising campaigns on CTV platforms.

The report also reveals a strong preference among Black CTV users for free, ad-supported content. A significant 68% of respondents prefer streaming free video content with advertisements, and 65% watch over two hours of Free Ad-Supported Streaming TV (FAST) content per week. This consumption rate is 21% higher than the average CTV viewer, indicating a substantial opportunity for advertisers to reach engaged audiences through FAST channels.

Interestingly, the study found that Black CTV users are even more likely than the average user to engage in subscription app cycling. A remarkable 77% of respondents reported being likely to sign up for a subscription service and cancel after watching specific content. This behavior suggests that advertisers should consider strategies that capitalize on peak viewing periods and trending content.

Monica Longoria, Head of Marketing Insights at LG Ad Solutions, emphasized the timeliness of these findings. According to Longoria, as the United States continues to become more multicultural, it is crucial for marketers to adopt intentionally inclusive advertising strategies. She highlighted CTV's advanced targeting capabilities as a key tool for brands to market to diverse groups with authentic and relevant messages.

The technical capabilities of CTV platforms play a significant role in enabling these personalized advertising strategies. CTV allows for granular audience segmentation based on various factors, including viewing habits, demographics, and even specific household data. This level of targeting precision enables advertisers to create and deliver highly relevant content to Black American viewers, potentially increasing engagement and conversion rates.

Moreover, the interactive nature of CTV platforms offers unique opportunities for advertisers. Features such as clickable ads, QR codes, and voice-activated responses can create more immersive and engaging advertising experiences. These interactive elements can help bridge the gap between seeing an ad and taking action, contributing to the high rates of post-ad activity reported in the study.

The preference for FAST content among Black CTV users also presents interesting technical considerations for advertisers. FAST channels typically rely on server-side ad insertion (SSAI) technology, which seamlessly integrates ads into the content stream. This technology not only provides a smoother viewing experience but also helps combat ad-blocking software, ensuring that advertisements reach their intended audience.

The study's findings also have implications for content recommendation algorithms. With the TV Home Screen being the primary source of content recommendations for many Black CTV users, there's an opportunity to refine these algorithms to better reflect diverse viewing preferences and cultural interests. This could lead to more engaging content experiences and, consequently, more receptive audiences for advertisers.

As the CTV landscape continues to evolve, studies like this one from LG Ad Solutions provide valuable insights for advertisers looking to connect with specific demographics. The data suggests that CTV is not just another advertising channel, but a powerful tool for creating more inclusive, personalized, and effective marketing strategies.

However, it's important to note that while these findings present significant opportunities, they also come with responsibilities. Advertisers must approach these insights with cultural sensitivity and authenticity, ensuring that their campaigns resonate genuinely with Black American audiences rather than relying on stereotypes or superficial representations.

Key facts from the LG Ad Solutions study

Released on August 14, 2024

Surveyed nearly 1,500 Black and African American CTV users

44% of Black American viewers prefer the TV Home Screen for content recommendations

63% of Black CTV users find streaming TV ads more relevant than traditional TV ads

68% prefer streaming free video content with ads

65% watch over 2+ hours of FAST content per week, 21% higher than average

77% likely to sign up for a subscription service and cancel after watching specific content

Black American consumers' economic power projected to grow from $910 billion in 2019 to $1.7 trillion by 2030

Nearly half of Black CTV users visit a website after seeing an ad, 29% purchase a product, and 24% visit a store