In the face of Connected TV’s (CTV) allure growing ever stronger, its linear counterpart is seemingly in decline. Marketers have rightly recognised CTV’s benefits, firstly as a result of compatibility with advanced reporting tools — allowing for marketing efficiencies achieved by monitoring transparent performance reviews and clear demonstrations of ROI — and secondly the flexibility to pivot campaigns according to clear consumer behaviour insights.
In 2021, all forms of TV advertising saw record-levels of investment – reaching a total of £5.46 billion, an increase of 24% on the channel’s 2020 investment. However, ad spend predictions for CTV investment in 2023 overshadow linear considerably, with CTV spend expected to grow by 14.4% year-over-year, compared to a projected decline of 6.3% in linear. Looking ahead, marketers are certainly hedging their bets on an upward trend of digital viewing.
However, linear has long been a trusted source of reach and awareness for brands – and marketers should not turn their backs on the channel so hastily, especially when a total of 85.2% of UK individuals are reached by linear every week. To stay cost-effective and meet long and short-term targets, it makes more sense for marketers to implement incremental shifts in budget for a more balanced approach between the two channels. This is especially true when linear’s vast reach means it is still securing large budgets; a shift of 10 – 15% of current investment would represent huge value in the CTV space, making that redistributed investment extremely cost-effective.
The TV balancing act
Buyers that are simply sticking to linear because it is what they know could be missing out on shrewd CTV investments, particularly when justifying and measuring these investments. It’s true that linear TV does not provide the same granularity as CTV, relying on metrics like reach and frequency as proxies for demonstrating effectiveness – and understandably, budgets are shifting away from offline as a result.
With a likely recession ahead and inflation running high, it’s easy to focus overwhelmingly on digital solutions to satisfy immediate targets such as low cost per acquisition (CPA) demands and strong return on ad spend (ROAS). However, it’s important not to forget about long-term growth and the high-funnel objectives where linear adds value. It is a crucial platform for brand building, and overlooking it could be a wasted opportunity for individual brands, but also an over-investment in digital solutions on a macro level could lead to under-developed industries — especially in unconsolidated industries such as cryptocurrency or blockchain technology.
Marketers must also consider generational viewing differences when balancing their channel investment: while younger consumers may opt for CTV, subscription video on demand (SVOD) or advertising-based video on demand (AVOD), older consumers still dedicate over two hours a day to watching broadcast TV (35-44 year-olds), which increases to over three hours for 55-64 year-olds. Missing entire cohorts – especially those who potentially hold a higher disposable income – may mean brands lose out on important leads.
Harnessing the power of digital
While long term viability and high-funnel awareness should be a consideration, short-term success is equally important, therefore the results of budget decisions must be measured and accessible. Through robust and comprehensive reporting, CTV affords advertisers the ability to accurately evaluate, in detail, the return on every penny spent. As a result, marketers can activate, optimise, and dial-back campaigns quickly and effectively, facilitating agility in the face of economic uncertainty. What’s more, CTV has the added capability to target niche audience segments while simultaneously appealing to a range of demographics.
Further developments in measurement, supported by artificial intelligence (AI) and machine learning, mean that marketers can now combine data from linear and CTV to provide omnichannel, comparable key insights such as cost and incremental reach by channel. Accurate customer trends reports allow companies to optimise prospecting and retargeting efforts away from low-scoring audiences and towards those with high purchase probability – this robust analysis can guide companies in strategic decisions that set them up for success. Core KPIs such as customer propensity to purchase and lifetime value allow for a more holistic approach to ad spend, where marketers meet both long and short-term goals in a turbulent economy.
While CTV is an incredible tool to reach highly targeted audiences and receive detailed measurements, it is by no means the only channel worth investing in. Instead, implementing an omni-channel, digital approach supported by a robust first-party data strategy and strong attribution model will bolster a brand’s long-term position.
A holistic approach towards long-term success
It’s true that CTV offers up extensive opportunities in measurement and attribution for brands, but focusing solely on immediate success can lead marketers into a fluctuating spend spiral as they switch between short-term and long-term objectives.
Overall, linear TV – delivering high view-through rates and broad audiences – is still a key performance driver and crucial component of brand building, and marketers should not forget the good value it can provide long term. By contrast, CTV’s ultra-targeted and traceable offering gives advertisers clear visibility of key metrics, leading to accurate analysis and insights to allow for informed investment decisions.
Instead of rushing to shift large amounts of budget to CTV, brands must keep a holistic view of their investment to optimise results, and bind together CTV and linear as a mutually complementary partnership.
