April 11, 2018

Maximize your TV advertising efforts: throw CTV into the mix

Traditional TV is an unquestionably impactful medium. For decades, it has been a popular choice for broad reach advertising campaigns since it is widely believed to give you the most bang for your buck. So, of course, you should keep spending your ad budget on traditional TV, right? Wrong. Absolutely wrong.

Sure, in aggregate, linear TV offers both scale and efficiency. But, when it comes to margin or return on the additional dollars you spend, traditional TV actually performs quite poorly.

This gap becomes evident when you take an alternate look at a standard advertiser’s reach per point analysis, and focus instead on the cost per reach point for additional dollars spent. This sort of analysis typically comes into play during the planning stages of media buying as advertisers determine whether they should move budget from one channel to another.

Because those additional traditional TV ad dollars are ultimately allocated to buying more impressions across the same audience, the value of those added impressions is actually negative – particularly if the consumers you’re reaching are anything like me.

When the same TV ads appear to the same viewers over and over, the viewers are likely to become annoyed and use those commercial breaks to grab a snack or browse their mobile devices. In fact, for larger advertisers spending tens of millions of dollars on linear TV advertising, the frequency of ad repetition can be as high as 25 times within a period of two months or less for the same creative, according to proprietary data from The Trade Desk.

Now, however, with the growth of connected TV advertising, those additional and otherwise wasted linear TV ad dollars can be used to reach new and incremental TV-streaming audiences – many of which are unreachable through traditional TV – in a cost-efficient way.

According to an internally run analysis comparing traditional TV to connected TV, the ability to frequency cap with connected TV advertising allows for highly efficient prospecting. Even though connected TV ads are more expensive on a CPM basis, the cost per reach can be up to 25% less than that of traditional TV.

So, to circle back to the original question: what should you do with your traditional TV budget? I recommend that you allocate a portion of your upfront commitment toward connected TV channels. Not only will you reach an audience that you can’t reach through traditional means, but you’ll also reach them in a significantly more efficient and viewer-friendly way.