By Mark Taylor, partner development director at Quantcast
The world of TV is undoubtedly changing. In fact, it’s safe to say it has been for well over a decade, ever since the current streaming industry leaders launched OTT platforms, providing subscribers with thousands of hours of content at their fingertips.
While some may have assumed connected TV (CTV) would be a flash in the pan, it’s proven to be a successful model that has been duplicated by everyone from traditional TV stations (BBC iPlayer, ITVX) to movie production companies (Disney+).
As such, CTV currently receives significant and well-deserved attention within the advertising industry. According to the IAB Compass Report, 66% of households currently use a CTV device, and this number is expected to continue growing, especially as traditional linear TV broadcasters increase their resources and focus towards video-on-demand. Netflix’s decision to sign up to the UK rating service Barb also serves as a clear indicator that CTV consumption is influencing the way viewership statistics are assessed as a whole.
However, the theory that traditional linear TV is dying is certainly premature. While Ofcom data shows a slight decline in TV viewership, from 83% in 2021 to 79% in 2022, that still equates to a substantial 22.3 million households. It’s also worth noting that much of H1 2021 saw large portions of the UK in lockdown, so a decrease in TV consumption in 2022 was to be expected.
Future of TV ad budgets
The ongoing evolution of TV viewing habits – whether traditional or via on-demand services – is sparking discussions about the allocation of TV budgets within advertising and marketing teams across the country. Frequently, linear and connected TV are considered separately, either due to the distribution of purchasing responsibilities across different teams or the distinct infrastructure, resulting in limited comprehension of both platforms.
What isn’t being discussed frequently enough is how both TV and CTV can be utilised together within an advertising budget by taking a holistic view. Doing so will highlight that both have benefits that complement each other.
CTV harnesses the power of digital by offering precise targeting along with frequency capping. It therefore allows marketers to reach audiences that are either cord cutters or light TV viewers, and offers many of the advantages of TV advertising, such as full-screen takeovers and capturing viewer attention effectively.
Conversely, traditional linear TV provides the opportunity to reach large audiences at a significant scale. It has a well-established track record of enhancing brand recognition, and consumers continue to regard TV advertisements as a trustworthy and credible form of advertising.
Unifying media budgets for 2024
While finalising advertising plans and budgets for 2024 over the coming weeks, it’s important to integrate the advantages of both mediums. To do so successfully, consider the following five factors to ensure linear and CTV are utilised effectively in media strategies:
- Audience segmentation – To establish a cross-medium audience segmentation strategy, categorise viewers as heavy, medium, or light TV consumers. This method allows for identifying correlations between both mediums.
- Reach vs precision – Linear TV offers mass reach, while CTV provides the ability to be more precise in reaching target audiences. It’s therefore key to understand the drop-off point for return on ad spend on TV when carrying over to CTV, and vice-versa, whether for increasing frequency or adding incremental reach.
- Frequency of exposure – Understanding the effectiveness of ad exposure helps in budget allocation. It’s noteworthy that exposure across different advertising channels can boost brand resonance. Therefore, reaching viewers who have previously been exposed on either medium can still be advantageous.
- Funnel campaigns – TV has always been an upper-funnel awareness driver, and while CTV can also be leveraged for this purpose, advertisers should consider how CTV allows them to be more targeted across the wider funnel to complement TV branding campaigns.
- Repurposing creative – Broadcast advertising is a cost-intensive medium. With CTV being such a familiar environment for large-screen advertising, taking a holistic view will allow teams to carry over TV creative to help minimise extra costs.
Linear TV and CTV undoubtedly have their advantages when considered separately. However, treating them as a unified medium that harnesses the strengths of each offers an exciting opportunity to improve campaign results across channels. Advertisers that don’t realise this before finalising their budgets for 2024 may find themselves falling behind come the new year.