What Linear TV Advertisers Should Know About Connected TV

TV viewing habits have changed. Viewers are trading in their linear TV/cable/satellite subscriptions and choosing to instead stream content using Connected TV (CTV). In fact, people are now watching more CTV than linear TV [1]. Advertisers and media buyers are facing a new reality: fragmented TV viewership mixed with data technology has created a consumer landscape that requires (and provides!) diversified media strategies.

CTV ad spend is expected to grow 14.4% in 2023, more than any other channel, while linear TV is expected to drop 6.3% [2]. Linear TV isn’t dead, though. Rather than choosing one or the other, brands are blending linear and CTV media buys to reach their target audiences more efficiently. If you’re a linear-only TV advertiser here are a few things you should know about adding Connected TV to your media strategy.

1. CTV Offers Unique Advertising Opportunities

A growing ad trend in streaming is ad-supported video on demand, or AVOD. AVOD platforms provide consumers access to video content for free in exchange for watching in-content ads. Premium streaming service providers like Netflix and Disney+ have recently adopted AVOD to attract the rising number of consumers willing to opt in to ad-based versions as a cheaper alternative to the higher-priced, ad-free subscriptions [3].

What This Means For You

All you old-school ladies and gents rejoice! AVOD provides an ad experience that looks and feels like traditional TV advertising for the viewer, with the added benefit of hyper-targeting CTV audiences. The days of seeing denture ads during Saturday morning cartoons is now replaced with seeing denture ads only in households with adult seniors living in the home who are in the market for dentures, while a different ad plays in the exact same slot for households that don’t meet those criteria. Mind (and teeth) blown.

2. The CTV Marketplace Is Complex

The rapid growth of streaming content and content platforms offers nearly limitless viewing options for television audiences, and more places than ever for brands to reach them. To fully realize CTV’s advertising potential, brands must have a clear understanding of the inventory available, which is vastly more complex than linear. CTV inventory is purchased programmatically through either an open exchange, within a private marketplace (PMP), or directly from publishers.

Open Exchange – a public marketplace where anyone can bid for inventory.

PMP – a private marketplace where premium publishers offer their media inventory to a select group of advertisers at a pre-negotiated price.

Direct – similar to traditional TV advertising, direct media buys are a one-to-one exchange with a specific publisher.

What This Means For You

Where you buy your CTV media will depend on your goals. If you want the most cost-effective way to buy media with access to the largest pool of inventory, an open exchange might be your best option. If your goal is to access to a more exclusive, premium inventory with stable volume, PMP is the way to go [4]. Direct buys allow brands to advertise exclusively with a publisher of choice but can be pricier and offer less scale. If you’re new to CTV, it’s important to understand the basics of programmatic media buying so you can be sure your ad dollars are aligned with your advertising goals and budget.

3. Linear TV Content Is Accessible Via CTV

Big TV networks understand that CTV has grown tremendously in the past few years, so many are launching FAST (Free Ad-supported Streaming TV) channels to reach streaming audiences [5]. FAST channels are like traditional linear television, in which you watch a broadcast TV program at a scheduled time, the difference being that FAST programming is viewed through the internet instead of through a linear TV cable package. FAST channels also use in-content advertisements. At the local level, FAST ad content is the linear feed. At the national level, FAST ad content is part of CTV inventory available for purchase.

What This Means For You

If a brand previously had success reaching customers on traditional broadcast television, FAST channels are a great way to reach the cord cutting pool of their demo.

4. Premium, Brand-Safe Inventory Is Not A Given

The risk of running ads alongside objectionable content exists on CTV just as it does on linear channels. Purchasing media inventory through an open exchange auction is like a blind, random purchase. While the open exchange offers the most affordable CPMs, advertisers have no control over where their ads will appear. Companies can protect their brand reputation by purchasing ad inventory through a Private Marketplace (PMP) auction that ensures their ads are served on trusted networks with reputable publishers.

A Private Marketplace (PMP) auction is different from a public auction because only a selected group of invited advertisers can participate in the bidding process. PMP deals give priority access to inventory to an exclusive group of advertisers before it becomes available in the open marketplace. Additionally, advertisers know which publishers they are working with and where their ads will appear.

What This Means For You

To protect your brand from reputational risks, you should be mindful of where your ads are served. PMPs offer increased transparency into media placement, so brands get a clear idea of what kind of inventory they are buying and at what price. Brands that do not have existing PMP deals can partner with a media buying agency offering PMP inventory to their clients.

What Strategies Make CTV Most Effective?

Unduplicated Reach

By identifying audiences who haven’t been exposed to your ads on linear TV, you can achieve unduplicated reach with CTV. A recent analysis by Samsung Ads found that advertisers waste linear ad spend on excessive frequency. For example, one advertiser served their ad an average of 65 times to linear TV viewers in households with Samsung TVs [6].

Moving some linear media dollars to CTV could help increase reach while keeping frequency below the point of diminishing returns. Viewership data allows for audience building that excludes consumers who’ve already been exposed to your ad. Brands looking to build awareness can leverage CTV to achieve highly efficient, incremental reach.

Using CTV For Retargeting

CTV and linear audiences aren’t mutually exclusive. Many viewers are consuming a combination of linear and CTV. Brands can use CTV to retarget consumers who’ve “raised their hand” in interest of the product or service. The audience data available in CTV can be used to identify audiences who have been served an ad on linear TV and then expressed interest in the brand, driving those audiences to convert with lower funnel messaging on CTV.

You’re In The Know About CTV…Now What?

CTV has emerged as an invaluable channel for advertisers. To get the most out of TV advertising in this new media landscape, media strategies should combine linear and CTV into a hybrid strategy that leverages the strengths of each channel and balances the weaknesses of the other. If you’re interested to learn more about how Wingman Media could help you with a hybrid media strategy, let’s chat.