This article originally appeared in Marketing Toolbox
By: James Moore, Chief Revenue Officer at Simpli.fi
Linear TV advertising has long dominated a large portion of the advertising spend pie. Although there is still a place in advertising for linear TV, the unquestionable reality is that consumers are increasingly turning to streaming and on-demand TV options. This shift in consumer behavior has flipped the television advertising industry on its head. eMarketer estimates that advertisers spent $1.16 billion more on programmatic connected TV ads in 2020 than in 2019, and in 2021, incremental spending will increase to $2.37 billion.
The rise in connected TV has brought into question whether the way in which linear TV ads are bought and measured, as it has existed for years, will suffice in the digital era of today. With more consumers turning to streaming, TV media buying can no longer rely on upfront buys and traditional rating metrics. As the industry continues to evolve, advertisers should think of consumers, and not content, as premium when they consider their media buys.
Media Buying of the Next Decade
Television has remained a prominent force in advertising for decades, and one reason for this is that it is the largest and most prolifically used screen in a consumer’s life. Even as consumers have moved to viewing content via internet-enabled options on mobile devices and tablets, televisions are a mainstay for many. Therefore, television advertising is powerful for its wide reach and physical presence in a home.
In the past, TV media buying has been rooted in the idea that advertisers can reach an enormous audience with their message by buying ad space during specific shows at specific times that may be popular among a desired demographic. However, linear TV ads often do not offer accurate and precise measurement capabilities to track how these ads performed on a household basis. Furthermore, there is little guarantee the target demographic is actually viewing the content on that channel at that time.
The TV media buying approach so far has prioritized content over the audience, and advertisers buy based on the content they assume their target market is watching. And since the most desired shows are likely to be the most expensive, ad buyers often end up buying their fair share of questionable placements at a more efficient, blended cost per point to meet budget needs. The result is thousands of ad impressions served outside the target demographic and a rate blending exercise that is, frankly, wasteful.
The prolific access to connected TV across devices has scattered audiences across a vast ocean of content with a diverse mix of viewing habits and preferences. This has made it more difficult for linear TV advertisers to predict the most effective way to reach consumers and subsequently the most accurate way to measure success. With this, media buyers need to be focusing on targeting the right consumers rather than wasting impressions targeting select content in the hopes their target audience tunes in. Targeting the right audiences with privacy-friendly online and offline data, regardless of the content they are consuming, will ultimately lead to more meaningful results, fewer wasted impressions, and more direct response measurement on desired business outcomes.
Media Buying Must Be Audience-First
Looking back on the migration to real-time programmatic from traditional direct sale network models, one can see parallels in the evolution of television media buys. Even more recently, the same evolution occurred in mobile advertising as more mobile ad networks scale back direct advertising sales as they push inventory and data into the programmatic ecosystem. In each instance, audience data paired with real-time advertising decisions that are properly measured have proven to be most effective and efficient for brand advertisers.
Now, a similar trend is emerging as digital advertising methods run into the historical norms in TV where defining content as premium and upfront and bulk buys still occurs. This is where true audience-first advertising comes into play. When all impressions are linked back to the target audience, advertisers can accurately measure results and make impression purchase decisions one impression at a time.
The industry has reached an inflection point. TV networks, media companies, and agencies are capitalizing on the major growth in TV streaming viewership, and many have made influential changes to accommodate the rising trend. We’ve already seen many prominent TV companies make this decision to move local TV buys to impression-based deals and more direct response measurements such as online and offline conversion lift.
The right ad served to the right consumer at the right time based on consumer behavior that yields a measurable result is, by definition, premium, regardless of the content they were consuming when they were reached. The future of TV advertising is connected TV advertising to premium audiences that are bought and optimized in real-time.