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What It Is & How it Works

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What It Is & How it Works

For evidence of the rise in streaming TV usage in recent years, most of us have to look no further than our own television sets. Linear TV (i.e. cable and broadcast) viewership and advertising has been on a steady and continuing decline, leaving many advertisers looking for alternative solutions to reach the large audience that commercials on traditional television have historically offered. In fact, this year, it’s expected that cord-cutters will officially outnumber cord-nevers, who have never used a traditional cable TV or satellite service.

“This market has grown by double digits each year since we began tracking it in 2017, and it will continue to do so through the end of our forecast period in 2026.”eMarketer

 

Source: https://chart-na1.emarketer.com/259798/us-connected-tv-ctv-ad-spending-share-by-company-2020-2024-of-total-ctv-ad-spending

But this new territory comes with its own set of major players, definitions, methods and manners of streaming content, and ad inventory and buying options. For those new to the streaming advertising landscape, it can seem like an entirely new path for which they have no directions.

Streaming landscape infographic

In this post, we’ll work to take some of the confusion out of streaming ads by breaking down one of the most popular marketing avenues—Connected TV advertising.
 

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What is Connected TV (CTV) Advertising?

 
chart showing US CTV ad spending in billions and as a percentage of total digital ad spending from 2022-2026

Source: https://forecasts-na1.emarketer.com/584b26021403070290f93a3a/5d9671494945300bf4895bf9

Connected TV advertising includes digital ads shown to viewers who are watching streaming video content on an internet-connected television, including Smart TVs. Ads are displayed before, during/alongside, or after the television shows, movies, or livestreams being watched. Popular CTV ad types include display banners, traditional commercial-style placements, pop-up ads, and interactive ads that allow viewers to take direct action, often by using their phone camera or remote control.

Some recent stats that highlight the incredible growth and opportunity already underway for CTV advertising, which is expected to continually climb for many years to come, include…

  • Nearly 68% of the US population (230 million people) uses a connected TV (Source)
  •  

  • Annual CTV ad spend in the US is expected to reach $43B in 2026 (Source)
  •  

  • eMarketer forecasts that connected devices will account for 39.2% of time spent with YouTube by 2024 (Source)

“In the US, CTV is the fastest-growing ad format we track, with a projected growth of 27.2% in 2023, for a total of $26.92 billion. By contrast, we project US retail media ad spend to increase by 20.5% and US social network ad spend to grow by 8.8% in the next year.”eMarketer

 

CTV Advertising vs. OTT

‘Connected TV advertising’ and ‘OTT advertising’ are often used interchangeably, but there are practical differences between the two that relate most directly to the device on which the content is being consumed.

As their name implies, Connected TVs are able to deliver streaming content thanks to their “connection” to the internet. This connection is often built-in to the television, as is the case with Smart TVs, but a connection can also be facilitated through the use of after-market internet-capable devices, including the Amazon Fire TV Stick, Roku devices, gaming consoles, and Apple TVs.

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While not all streaming content is viewed or listened to through a Connected TV, all CTVs deliver streaming video content. Looking at advertising specifically, CTV advertising would be viewed by prospective customers through apps they were accessing via their television screen. For example, while watching YouTube or streaming Twitch content on a Connected TV, viewers may be shown display banner advertising. That type of advertising is considered Connected TV advertising, but it is not OTT. OTT typically implies content streamed by a “network” like Hulu, NBC, or Pluto.

OTT is an acronym for “over-the-top,” and refers to streaming content that is “delivered over” (not through) a cable box. Unlike CTV advertising, which is exclusively shown on televisions, OTT advertising can be delivered on TVs, personal computers, tablets, mobile phones and more.
 

CTV Advertising vs. Addressable TV

Addressable TV provides advertisers with 1:1 targeting in a traditional TV environment, enabling them to segment and deliver ads to selected, internet-connected linear TV and OTT/CTV audiences (households), thereby ‘addressing’ the audiences they want to reach through their ads. This level of targeting is accomplished by matching an advertiser’s first or third-party dataset to a cable TV provider’s dataset in a privacy-safe way.

The audience segments you’re able to target through Addressable TV advertising can be built on a number of factors, including specific demographics a viewer falls within, and their geographic location. Have you noticed you get different ads than your friends when you’re watching the same program? Addressable TV advertising is likely at play, serving up better-targeted-to-you-specifically ads, rather than traditional TV ads, where all viewers of the same program (and in the same region) are shown the same commercials.
 

CTV Advertising vs. Linear TV

Linear TV is what most of us think of as traditional TV, with cable or satellite programming and adjacent advertisements running on a largely predetermined schedule. Today, linear TV typically reaches a much older demographic than streaming TV.

While linear TV watching is on the decline, there are still a very high number of subscribers. Advertising on linear can be incredibly impactful when leveraged in complement with CTV advertising. Targeting is available in the linear space, though it is often less granular than in streaming. Linear TV can be bought on a guaranteed demographic basis—i.e. a network can guarantee your ad will run to a certain audience (gender, HHI, etc)—with Addressable TV being a version of this.

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Linear TV advertising can be beneficial for brands with an older customer base and very wide appeal, who want to reach the most varied group of potential consumers as possible—and it might be more affordable than you’d expect. Non-guaranteed linear CPMs (cost per thousand impressions) are actually often lower than streaming CPMs.
 

Benefits of Connected TV Advertising

 
chart showing how many millions of connected TV households there are projected to be from 2023-2027

Source: https://forecasts-na1.emarketer.com/584b26021403070290f93a3a/5851918a0626310a2c1869b5

Key benefits of CTV advertising include…

Reach more customers: Not only are there 113 million CTV households in the US, but those households include a large number of people from all current adult-inclusive generations. Whether you want to reach Gen Z, Gen X, Millennials or Baby Boomers, you’ll reach them all by the tens of millions with CTV ads (Source)

chart showing breakdown of how many US CTV users are millennials, Gen Z, Gen X, and baby boomer viewers

Source: https://forecasts-na1.emarketer.com/584b26021403070290f93a3a/5f624727ce286916fc72277e

Automated Optimization and Media Buying: The use of programmatic is on the rise in CTV advertising, though it isn’t the only way to purchase ad space. Because most CTV ad inventory is “delivered against premium video content from broadcast TV, cable, and streaming studios,” there is often a heightened degree of brand safety. (Source)

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Precise Audience-Based Targeting: CTV ad options are continuing to expand—particularly programmatic inventory—with audience targeting capabilities that rival what social media networks and Paid Search provide (Source). Common targeting options include: age, location, gender, known interests, education or income level, and purchase history.

Real-time measurement: The great news with CTV advertising is that results are often deterministic and available in real-time, meaning you don’t have to wait weeks or months to adjust based on performance.
 

How Does CTV Advertising Work?

 
Investing in CTV ads can help you reach your desired audiences within the 113+ million streaming viewers across many popular apps and services, but how do you actually make those ads happen? Let’s dive into the steps…
 

Choose a platform

Whether you want to start small with one CTV platform, or design a fuller campaign that targets viewers across a variety of popular apps, there are an abundance of options to suit your goals and needs. Once you’ve selected a platform or platforms, explore all the available ad types offered by that provider. There are an expanding number of platforms to choose from, with some popular options including YouTube and Hulu. Once you understand the foundational capabilities of each, you can better design a campaign that leverages a mix of ad options and/or audiences.
 

Upload creative

Once you have all your creative polished and ready to help you reach your advertising goals, work with your agency partner to upload it to the platforms you’ve decided to advertise with.
 

Target an audience

The advanced targeting options CTV advertising offers are what draws many advertisers to this avenue, with the measurable results keeping them coming back. Consider the audiences you want to reach, and the actions you want them to take, in deciding who you’ll target with which creative and placements. Consider the audiences available within the platforms themselves, audiences you might want to reach based on your own first-party data, which KPIs you are interested in measuring, and whether measuring incrementality is important
 

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Choose campaign placements

Available placement options vary depending on the platform you’ll be advertising on. It’s important to consider when and where a given ad placement will be displayed so you can ensure appropriate messaging.

For example, if your ad will display when a viewer pauses their programming, you’ll want to make your ad eye-catching enough that they’ll read it before returning to their show. Making it interactive can also prove beneficial, such as incorporating a QR code for viewers to take further action.
 

Set budget and launch

You’ve likely already considered your budget in the previous steps as how much you’re willing to spend can greatly influence the platforms, placements, and breadth of audiences you want to reach. Once you’ve finalized your budget, you’re ready to send your ads off into the streaming universe! Note that this is a highly scalable channel, and can be used to both drive brand awareness and bottom funnel performance.
 

Optimize and refine based on results

Like all digital advertising campaigns, there is no set-it-and-forget-it approach. Once you’ve given your ads enough time to reach statistically significant results, carefully review what’s working best, and where there might be room for improvement. Consider the full scope of what can be influencing these results, including targeting and the creative itself.
 

Platforms & Devices for CTV Advertising

 
chart showing which CTV devices were most used by North American internet users in Q2 2022

Source: https://chart-na1.emarketer.com/259649/connected-tv-ctv-devices-currently-used-by-internet-users-north-america-q2-2022-of-respondents

CTV devices and platforms are already numerous, with options for platforms in particular most likely to continue to climb in the near future.

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CTV Devices are the physical products that facilitate watching streaming content. In the Connected TV space, that includes Smart TVs (internet-capable by design), and regular TVs that have been “made smart” through the use of an after-market, internet-capable device (Roku devices, gaming consoles, Apple TVs, Amazon Fire TV Sticks, and more.)

CTV Platforms are the apps and services that viewers will be watching when they see your CTV ads. Some popular, ad-supported platforms include:

  • Hulu
  • Facebook Watch
  • YouTube
  • Pluto TV
  • Peacock
  • Amazon Freevee

 

Examples of CTV Ad Types

 
While the available ad units can vary from platform to platform, there are certain ad types that are most common. Below, we dive into four popular and widely-offered CTV ad types…
 

Display ads

Display ads on CTV function similarly to the display ads we see elsewhere, including on our favorite websites and blogs. These ads appear above, below or alongside the content being viewed, helping increase and improve brand awareness.

eMarketer estimates that “CTV will account for 16.5% of all US display ad spend” in 2023.
 

In-stream Video ads

In-stream video ads are served to customers once they’ve begun a streaming session. These ads can be shown before, during, or after they’ve viewed their selected content. In-stream video ads are most similar to what most of us consider traditional television commercials.

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Instream ads are the most common ad type shown “on platforms like YouTube,” and are also commonly referred to as pre-roll, mid-roll, and post-roll video advertisements.
 

Interactive ads

Interactive ads are a newer ad type that viewers can interact with in some way when they are displayed, with a few different interactive options. These might include scanning a QR code shown on the screen to be taken to a website, or sent more information via email. Some interactive ads even enable viewers to make a purchase, or add an advertised item to their cart, directly from the ad.
 

Pop-up ads

CTV pop-up ads include those that display beneath the content being viewed, or when a streaming viewer has paused their programming. These ad types don’t require that users interact with them in any way, helping boost brand awareness without interrupting their streaming session.
 

How Are Connected TV Audiences Targeted?

 
chart showing the household reach of select US streaming apps on CTV in H2 2022 with Netflix in first place

Source: https://chart-na1.emarketer.com/261554/household-reach-of-select-us-streaming-apps-on-connected-tv-ctv-h2-2022-reach

Different platforms offer a variety of audience targeting options, including the ability to target based on your own data. Below, we explore some of the most common and popular targeting options.
 

Geolocation

In real estate and advertising, location matters! Even if brands plan to advertise heavily across the US and beyond, targeting their ads by location can help improve relevance and expand their messaging options.

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For example, you might not want to waste money letting viewers in California know that your warmest winter coats are on sale. Or, perhaps your product names or available options vary by location? In these instances, you can enlist different ads for each location to eliminate any confusion, or cause upset when customers can’t find an advertised item near them.
 

Demographics

For many products and services, to make the most of your advertising dollars, selecting specific demographics to target can help reduce costs without sacrificing hitting your desired audiences. Different household demographics advertisers might want to target include: people of certain ages, income levels, or education levels; homeowners / renters; and parents of young children.
 

Platform targeting

Targeting by platform enables advertisers to reach only viewers using specific devices. This is typically done if you want to reach viewers that you know will be more interested in your product or service because they’re using a complementary product, or to reach viewers using a competing/different product that you hope to convert.
 

Contextual targeting

Contextual targeting aims to serve ads that ‘make sense’ in context with the content that is being viewed.

For example, if a viewer is watching a program about running, ads for athletic wear and sneakers would make good contextual sense. You can assume with relative certainty that most viewers watching a television program or movie about running might have interest in those items.
 

Channel targeting

Channel targeting allows advertisers to reach viewers on a specific network. This can be especially beneficial if your product aligns with an overall theme of a given network.

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For example, a company that sells bathroom lighting fixtures might want to target all viewers watching HGTV as many of that network’s shows are focused on home renovation projects. This would give reasonable certainty that a sizable number of viewers may be interested in making their own renovations, or that they’ll remember your brand in the future when they are. It also means your advertising will almost always work in harmony with the content a viewer is watching.
 

First and third-party data

Because CTV advertising is typically part of a larger digital marketing plan, it can be beneficial to leverage first- and third-party data in your audience targeting. This can include your first-party analytics and CRM data, and third-party audiences offered by CTV platforms.
 

Frequency caps

Frequency caps are limits on the number of times a given viewer will be shown your CTV ad. Due to CTV having a fragmented landscape across many networks, services, and platforms, without frequency caps in place, the same viewer may receive your ad numerous times in a short period of time—sometimes even repeatedly during the same ad break. To avoid annoying viewers with repetitive ads, caps can help you preserve your ad effectiveness and brand safety.
 

Important Metrics and Measurements for CTV Advertising

 
The measurability of streaming advertising on the whole makes it an attractive channel for advertisers of all niches and budgets. Some of the key metrics and measurements to help you track your CTV advertising performance include:

  • Impressions
  • Return on Ad Spend (ROAS)
  • Cost per Completed View (CPCV)
  • Cost per Acquisition (CPA)
  • Incrementality
  • Reach
  • Brand Lift
  • Frequency
  • Conversions
  • Gross Rating Point (GRP)
  • Cost per Point (CPP)
  • Cross-Screen Measurement
  • Target Rating Point
  • Video Completion Rate (VCR)
  • Revenue
  • Website Visits

 

Conclusion

 
With customers rapidly shifting from cable and satellite television to streaming TV, advertising options like CTV ads make an increasingly sound investment for advertisers trying to reach any audience. Because CTV advertising has a lower cost of entry than linear TV ads—and brings much higher targeting and measurement options—the playing field has been leveled a bit, giving a significantly larger number of brands and services the opportunity to reach relevant audiences on the biggest screen in the house. How’s that for smart TV?

It’s also important to note that many viewers, particularly those who have grown up watching streaming television, understand that ads are part of the equation. They are open to ad-supported video content when the tradeoff is a lower (or free) subscription that grants them access to quality content.

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Want to learn more about CTV and other forms of video and streaming advertising? Visit our Performance Streaming services page, download our Ultimate Guide to Performance Streaming, or reach out today to chat with an expert. 

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Streamlining Processes for Increased Efficiency and Results

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Streamlining Processes for Increased Efficiency and Results

How can businesses succeed nowadays when technology rules?  With competition getting tougher and customers changing their preferences often, it’s a challenge. But using marketing automation can help make things easier and get better results. And in the future, it’s going to be even more important for all kinds of businesses.

So, let’s discuss how businesses can leverage marketing automation to stay ahead and thrive.

Benefits of automation marketing automation to boost your efforts

First, let’s explore the benefits of marketing automation to supercharge your efforts:

 Marketing automation simplifies repetitive tasks, saving time and effort.

With automated workflows, processes become more efficient, leading to better productivity. For instance, automation not only streamlines tasks like email campaigns but also optimizes website speed, ensuring a seamless user experience. A faster website not only enhances customer satisfaction but also positively impacts search engine rankings, driving more organic traffic and ultimately boosting conversions.

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Automation allows for precise targeting, reaching the right audience with personalized messages.

With automated workflows, processes become more efficient, leading to better productivity. A great example of automated workflow is Pipedrive & WhatsApp Integration in which an automated welcome message pops up on their WhatsApp

within seconds once a potential customer expresses interest in your business.

Increases ROI

By optimizing campaigns and reducing manual labor, automation can significantly improve return on investment.

Leveraging automation enables businesses to scale their marketing efforts effectively, driving growth and success. Additionally, incorporating lead scoring into automated marketing processes can streamline the identification of high-potential prospects, further optimizing resource allocation and maximizing conversion rates.

Harnessing the power of marketing automation can revolutionize your marketing strategy, leading to increased efficiency, higher returns, and sustainable growth in today’s competitive market. So, why wait? Start automating your marketing efforts today and propel your business to new heights, moreover if you have just learned ways on how to create an online business

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How marketing automation can simplify operations and increase efficiency

Understanding the Change

Marketing automation has evolved significantly over time, from basic email marketing campaigns to sophisticated platforms that can manage entire marketing strategies. This progress has been fueled by advances in technology, particularly artificial intelligence (AI) and machine learning, making automation smarter and more adaptable.

One of the main reasons for this shift is the vast amount of data available to marketers today. From understanding customer demographics to analyzing behavior, the sheer volume of data is staggering. Marketing automation platforms use this data to create highly personalized and targeted campaigns, allowing businesses to connect with their audience on a deeper level.

The Emergence of AI-Powered Automation

In the future, AI-powered automation will play an even bigger role in marketing strategies. AI algorithms can analyze huge amounts of data in real-time, helping marketers identify trends, predict consumer behavior, and optimize campaigns as they go. This agility and responsiveness are crucial in today’s fast-moving digital world, where opportunities come and go in the blink of an eye. For example, we’re witnessing the rise of AI-based tools from AI website builders, to AI logo generators and even more, showing that we’re competing with time and efficiency.

Combining AI-powered automation with WordPress management services streamlines marketing efforts, enabling quick adaptation to changing trends and efficient management of online presence.

Moreover, AI can take care of routine tasks like content creation, scheduling, and testing, giving marketers more time to focus on strategic activities. By automating these repetitive tasks, businesses can work more efficiently, leading to better outcomes. AI can create social media ads tailored to specific demographics and preferences, ensuring that the content resonates with the target audience. With the help of an AI ad maker tool, businesses can efficiently produce high-quality advertisements that drive engagement and conversions across various social media platforms.

Personalization on a Large Scale

Personalization has always been important in marketing, and automation is making it possible on a larger scale. By using AI and machine learning, marketers can create tailored experiences for each customer based on their preferences, behaviors, and past interactions with the brand.  

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This level of personalization not only boosts customer satisfaction but also increases engagement and loyalty. When consumers feel understood and valued, they are more likely to become loyal customers and brand advocates. As automation technology continues to evolve, we can expect personalization to become even more advanced, enabling businesses to forge deeper connections with their audience.  As your company has tiny homes for sale California, personalized experiences will ensure each customer finds their perfect fit, fostering lasting connections.

Integration Across Channels

Another trend shaping the future of marketing automation is the integration of multiple channels into a cohesive strategy. Today’s consumers interact with brands across various touchpoints, from social media and email to websites and mobile apps. Marketing automation platforms that can seamlessly integrate these channels and deliver consistent messaging will have a competitive edge. When creating a comparison website it’s important to ensure that the platform effectively aggregates data from diverse sources and presents it in a user-friendly manner, empowering consumers to make informed decisions.

Omni-channel integration not only betters the customer experience but also provides marketers with a comprehensive view of the customer journey. By tracking interactions across channels, businesses can gain valuable insights into how consumers engage with their brand, allowing them to refine their marketing strategies for maximum impact. Lastly, integrating SEO services into omni-channel strategies boosts visibility and helps businesses better understand and engage with their customers across different platforms.

The Human Element

While automation offers many benefits, it’s crucial not to overlook the human aspect of marketing. Despite advances in AI and machine learning, there are still elements of marketing that require human creativity, empathy, and strategic thinking.

Successful marketing automation strikes a balance between technology and human expertise. By using automation to handle routine tasks and data analysis, marketers can focus on what they do best – storytelling, building relationships, and driving innovation.

Conclusion

The future of marketing automation looks promising, offering improved efficiency and results for businesses of all sizes.

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As AI continues to advance and consumer expectations change, automation will play an increasingly vital role in keeping businesses competitive.

By embracing automation technologies, marketers can simplify processes, deliver more personalized experiences, and ultimately, achieve their business goals more effectively than ever before.

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Will Google Buy HubSpot? | Content Marketing Institute

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Why Marketers Should Care About Google’s Potential HubSpot Acquisition

Google + HubSpot. Is it a thing?

This week, a flurry of news came down about Google’s consideration of purchasing HubSpot.

The prospect dismayed some. It delighted others.

But is it likely? Is it even possible? What would it mean for marketers? What does the consideration even mean for marketers?

Well, we asked CMI’s chief strategy advisor, Robert Rose, for his take. Watch this video or read on:

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Why Alphabet may want HubSpot

Alphabet, the parent company of Google, apparently is contemplating the acquisition of inbound marketing giant HubSpot.

The potential price could be in the range of $30 billion to $40 billion. That would make Alphabet’s largest acquisition by far. The current deal holding that title happened in 2011 when it acquired Motorola Mobility for more than $12 billion. It later sold it to Lenovo for less than $3 billion.

If the HubSpot deal happens, it would not be in character with what the classic evil villain has been doing for the past 20 years.

At first glance, you might think the deal would make no sense. Why would Google want to spend three times as much as it’s ever spent to get into the inbound marketing — the CRM and marketing automation business?

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At a second glance, it makes a ton of sense.

I don’t know if you’ve noticed, but I and others at CMI spend a lot of time discussing privacy, owned media, and the deprecation of the third-party cookie. I just talked about it two weeks ago. It’s really happening.

All that oxygen being sucked out of the ad tech space presents a compelling case that Alphabet should diversify from third-party data and classic surveillance-based marketing.

Yes, this potential acquisition is about data. HubSpot would give Alphabet the keys to the kingdom of 205,000 business customers — and their customers’ data that almost certainly numbers in the tens of millions. Alphabet would also gain access to the content, marketing, and sales information those customers consumed.

Conversely, the deal would provide an immediate tip of the spear for HubSpot clients to create more targeted programs in the Alphabet ecosystem and upload their data to drive even more personalized experiences on their own properties and connect them to the Google Workspace infrastructure.

When you add in the idea of Gemini, you can start to see how Google might monetize its generative AI tool beyond figuring out how to use it on ads on search results pages.

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What acquisition could mean for HubSpot customers

I may be stretching here but imagine this world. As a Hubspoogle customer, you can access an interface that prioritizes your owned media data (e.g., your website, your e-commerce catalog, blog) when Google’s Gemini answers a question).

Recent reports also say Google may put up a paywall around the new premium features of its artificial intelligence-powered Search Generative Experience. Imagine this as the new gating for marketing. In other words, users can subscribe to Google’s AI for free, but Hubspoogle customers can access that data and use it to create targeted offers.

The acquisition of HubSpot would immediately make Google Workspace a more robust competitor to Microsoft 365 Office for small- and medium-sized businesses as they would receive the ADDED capability of inbound marketing.

But in the world of rented land where Google is the landlord, the government will take notice of the acquisition. But — and it’s a big but, I cannot lie (yes, I just did that). The big but is whether this acquisition dance can happen without going afoul of regulatory issues.

Some analysts say it should be no problem. Others say, “Yeah, it wouldn’t go.” Either way, would anybody touch it in an election year? That’s a whole other story.

What marketers should realize

So, what’s my takeaway?

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It’s a remote chance that Google will jump on this hard, but stranger things have happened. It would be an exciting disruption in the market.

The sure bet is this. The acquisition conversation — as if you needed more data points — says getting good at owned media to attract and build audiences and using that first-party data to provide better communication and collaboration with your customers are a must.

It’s just a matter of time until Google makes a move. They might just be testing the waters now, but they will move here. But no matter what they do, if you have your customer data house in order, you’ll be primed for success.

Want more content marketing tips, insights, and examples? Subscribe to workday or weekly emails from CMI.

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Cover image by Joseph Kalinowski/Content Marketing Institute

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5 Psychological Tactics to Write Better Emails

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5 Psychological Tactics to Write Better Emails

Welcome to Creator Columns, where we bring expert HubSpot Creator voices to the Blogs that inspire and help you grow better.

I’ve tested 100s of psychological tactics on my email subscribers. In this blog, I reveal the five tactics that actually work.

You’ll learn about the email tactic that got one marketer a job at the White House.

You’ll learn how I doubled my 5 star reviews with one email, and why one strange email from Barack Obama broke all records for donations.

→ Download Now: The Beginner's Guide to Email Marketing [Free Ebook]

5 Psychological Tactics to Write Better Emails

Imagine writing an email that’s so effective it lands you a job at the White House.

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Well, that’s what happened to Maya Shankar, a PhD cognitive neuroscientist. In 2014, the Department of Veterans Affairs asked her to help increase signups in their veteran benefit scheme.

Maya had a plan. She was well aware of a cognitive bias that affects us all—the endowment effect. This bias suggests that people value items higher if they own them. So, she changed the subject line in the Veterans’ enrollment email.

Previously it read:

  • Veterans, you’re eligible for the benefit program. Sign up today.

She tweaked one word, changing it to:

  • Veterans, you’ve earned the benefits program. Sign up today.

This tiny tweak had a big impact. The amount of veterans enrolling in the program went up by 9%. And Maya landed a job working at the White House

Boost participation email graphic

Inspired by these psychological tweaks to emails, I started to run my own tests.

Alongside my podcast Nudge, I’ve run 100s of email tests on my 1,000s of newsletter subscribers.

Here are the five best tactics I’ve uncovered.

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1. Show readers what they’re missing.

Nobel prize winning behavioral scientists Daniel Kahneman and Amos Tversky uncovered a principle called loss aversion.

Loss aversion means that losses feel more painful than equivalent gains. In real-world terms, losing $10 feels worse than how gaining $10 feels good. And I wondered if this simple nudge could help increase the number of my podcast listeners.

For my test, I tweaked the subject line of the email announcing an episode. The control read:

“Listen to this one”

In the loss aversion variant it read:

“Don’t miss this one”

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It is very subtle loss aversion. Rather than asking someone to listen, I’m saying they shouldn’t miss out. And it worked. It increased the open rate by 13.3% and the click rate by 12.5%. Plus, it was a small change that cost me nothing at all.

Growth mindset email analytics

2. People follow the crowd.

In general, humans like to follow the masses. When picking a dish, we’ll often opt for the most popular. When choosing a movie to watch, we tend to pick the box office hit. It’s a well-known psychological bias called social proof.

I’ve always wondered if it works for emails. So, I set up an A/B experiment with two subject lines. Both promoted my show, but one contained social proof.

The control read: New Nudge: Why Brands Should Flaunt Their Flaws

The social proof variant read: New Nudge: Why Brands Should Flaunt Their Flaws (100,000 Downloads)

I hoped that by highlighting the episode’s high number of downloads, I’d encourage more people to listen. Fortunately, it worked.

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The open rate went from 22% to 28% for the social proof version, and the click rate, (the number of people actually listening to the episode), doubled.

3. Praise loyal subscribers.

The consistency principle suggests that people are likely to stick to behaviours they’ve previously taken. A retired taxi driver won’t swap his car for a bike. A hairdresser won’t change to a cheap shampoo. We like to stay consistent with our past behaviors.

I decided to test this in an email.

For my test, I attempted to encourage my subscribers to leave a review for my podcast. I sent emails to 400 subscribers who had been following the show for a year.

The control read: “Could you leave a review for Nudge?”

The consistency variant read: “You’ve been following Nudge for 12 months, could you leave a review?”

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My hypothesis was simple. If I remind people that they’ve consistently supported the show they’ll be more likely to leave a review.

It worked.

The open rate on the consistency version of the email was 7% higher.

But more importantly, the click rate, (the number of people who actually left a review), was almost 2x higher for the consistency version. Merely telling people they’d been a fan for a while doubled my reviews.

4. Showcase scarcity.

We prefer scarce resources. Taylor Swift gigs sell out in seconds not just because she’s popular, but because her tickets are hard to come by.

Swifties aren’t the first to experience this. Back in 1975, three researchers proved how powerful scarcity is. For the study, the researchers occupied a cafe. On alternating weeks they’d make one small change in the cafe.

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On some weeks they’d ensure the cookie jar was full.

On other weeks they’d ensure the cookie jar only contained two cookies (never more or less).

In other words, sometimes the cookies looked abundantly available. Sometimes they looked like they were almost out.

This changed behaviour. Customers who saw the two cookie jar bought 43% more cookies than those who saw the full jar.

It sounds too good to be true, so I tested it for myself.

I sent an email to 260 subscribers offering free access to my Science of Marketing course for one day only.

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In the control, the subject line read: “Free access to the Science of Marketing course”

For the scarcity variant it read: “Only Today: Get free access to the Science of Marketing Course | Only one enrol per person.”

130 people received the first email, 130 received the second. And the result was almost as good as the cookie finding. The scarcity version had a 15.1% higher open rate.

Email A/B test results

5. Spark curiosity.

All of the email tips I’ve shared have only been tested on my relatively small audience. So, I thought I’d end with a tip that was tested on the masses.

Back in 2012, Barack Obama and his campaign team sent hundreds of emails to raise funds for his campaign.

Of the $690 million he raised, most came from direct email appeals. But there was one email, according to ABC news, that was far more effective than the rest. And it was an odd one.

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The email that drew in the most cash, had a strange subject line. It simply said “Hey.”

The actual email asked the reader to donate, sharing all the expected reasons, but the subject line was different.

It sparked curiosity, it got people wondering, is Obama saying Hey just to me?

Readers were curious and couldn’t help but open the email. According to ABC it was “the most effective pitch of all.”

Because more people opened, it raised more money than any other email. The bias Obama used here is the curiosity gap. We’re more likely to act on something when our curiosity is piqued.

Email example

Loss aversion, social proof, consistency, scarcity and curiosity—all these nudges have helped me improve my emails. And I reckon they’ll work for you.

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It’s not guaranteed of course. Many might fail. But running some simple a/b tests for your emails is cost free, so why not try it out?

This blog is part of Phill Agnew’s Marketing Cheat Sheet series where he reveals the scientifically proven tips to help you improve your marketing. To learn more, listen to his podcast Nudge, a proud member of the Hubspot Podcast Network.

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