As connected TV (CTV) and over-the-top (OTT) advertising becomes more popular, some have begun to worry that the push toward digital connected TV advertising will start to hurt budgets for more traditional linear TV ads.
This concern may lead some marketers to look at whether their budgets can (or should) incorporate both CTV and linear TV advertising. A review of the data behind CTV and linear TV ad spending suggests that marketers have nothing to worry about.
In fact, industry trends suggest that the two forms of televised advertising are actually working as complements for each other. This is due in large part to the fact that they target audiences in significantly different ways. Most dedicated TV ad buyers don’t see CTV as a danger, but instead as a new tool that can increase their reach without taking away from their existing marketing plans.
Linear TV Ads vs. CTV Ads
One reason why TV ad buyers aren’t threatened by CTV and OTT content is the significant difference in how the two platforms service ads.
With traditional linear TV ads, the advertisements are placed against the content of the show or channel they appear on. Depending on the programming that an ad slot is contained in, ad buyers can place different advertisements in slots to better match the likely audience for that content. The ad buyer can look at market demographics for the programming and determine which slots are best for the product or service being sold, optimizing the chances of viewers engaging with the ads based on who’s likely to be viewing at that time.
With CTV and OTT advertising, however, the ad content is served up programmatically based on the users themselves, allowing for specific targeting of ad content, and only showing it to viewers whose history and metadata matches targeting data selected by the ad buyer. Two different viewers watching the same show might see significantly different ads because of their online histories, physical locations and other factors that cause them to fall into the criteria established by two different ad buyers.
Because the two types of TV content serve up ads in such different ways, ad buyers see them as being very complementary to each other.
Linear TV advertising is good for reaching large audiences, and while it lacks the in-depth targeting of CTV ads it makes up for this in reach within what is considered to be an agreeable demographic for the product or service being sold. There is a greater chance for potential customers to have access to linear TV than CTV as well, even though CTV adoption rates are at an all-time high; using linear TV ad spots increases the likelihood that any specific consumer will see an ad for the company or product being sold.
CTV ads can then target individuals more specifically, serving up ads to those who are more likely to be willing to make a purchasing decision. In some cases, an ad buyer might even target individuals who are likely to have seen linear TV ads previously based on their physical location or use of relevant search terms or hashtags. Because of the programmatic nature of CTV ads, other advertisements can be created for those who are less likely to have seen the linear TV spots.
Balancing the Budget
There is room for both linear TV ads and programmatic CTV ads within most marketing budgets, and it’s up to the marketing team to determine exactly what percentage of the budget should go to each.
This decision should be made based on the priorities of the company, the nature of its products and even the market in which it operates, but there are very few companies that will truly benefit from going all-in on only one type of televised advertisement. Just remember that the two types of ads aren’t competing against each other, and be sure to balance them so that they can best work together to achieve the brand’s goals.