Complementing Linear TV with Connected TV

 


 

When the yellow pages first went online, it was a scanned version of the printed book. When advertisers became aware of the added benefits that came with placing their ads online, Search was born and the rest is history.

Today, linear TV buyers are discovering that they can run the same commercials they know and love on connected TV and just as it was with internet yellow pages, CTV offers advertisers a whole new set of benefits. Precise targeting and advanced attribution provide insights unheard of with linear advertising and the ability to generate incremental reach when running CTV with linear make the combination invaluable when trying to capture your audience.

Join us this month on The Simpli.fi Webinar Series as we explore those new benefits and help advertisers know what to expect when complementing their linear TV buys with CTV.

 

Transcript

 

Hello and welcome to the Simpli.fi Webinar Series. I’m David McBee, director of Training. today I’m going to share the reasons that linear TV buyers, or agencies that sell linear TV advertising, should consider complementing their traditional campaigns with connected TV.

My goal will be to convince you that it’s time to migrate some of your advertising onto connected TV, telling you about several of the benefits that come with CTV, and we’ll do a little comparing and contrasting of linear and connected television.

Now you might think that a full-length webinar is overkill on this topic. You might be thinking, “Hey it’s just TV on the internet. What’s so different or special about that?”

I get it. I really do. It feels like it should be that simple. And on one hand, it kinda is. Its the same, or can be the same creative content … so you don’t have to reinvent the wheel. And it’s delivered to the prospect in the same way, while they’re watching episodic content and movies on TV.

It’s business as usual…Until you start looking at how audiences are built, where ads are delivered, differences in inventory and costs. At the end of the day, there’s plenty to talk about and I’m hoping to provide you the information you need to make the best decisions for your business or your advertisers.

I’ll start by telling you that… a hundred years ago, I sold print yellow pages. Today, that medium has mostly been replaced by the internet. But it wasn’t as simple as replacing the traditional version with a duplicate digital version was it?

Yes, there was a time, believe it or not, when yellow pages companies actually scanned the print book and posted it online. That was the very first online yellow pages. In fact, I found this company in New Zealand that is still doing it that way!

Back in the early 2000s, it was considered revolutionary. Access to your print yellow pages via your computer any time. You could lose your book, throw it away, or prop your toddler up on it, and still have access to the directory via the world wide web (remember when we used to call it that?)

Anyway, that version of the online yellow pages didn’t last long (at least here in the US) because the internet comes with benefits that neither a print book or a scanned version of the print book could offer.

I’m taking about precise audience targeting – the ability to put your business in front of the right person at the right time, and advanced attribution – the ability to track a lot of that activity to discover how well your online ads are working.

Of course, the digital version of the yellow pages became what we now know as SEARCH. They’re basically the same thing – directories where you can find a business. But search is a whole lot more than that isn’t it? And so, I think you will find, is connected TV when compared to its traditional counterpart.

But enough about yellow pages. My point, if it isn’t clear already, is this: moving from traditional media to digital media is as simple as “Just put my TV commercial on CTV and let’s call it a day.” PLUS some added benefits that come with the ads being delivered over the internet.

There’s actually a lot to talk about so I’m gonna jump right in.

Let’s start with the most obvious reason to consider CTV:

 
THE LINEAR AUDIENCE IS WATCHING CTV.

Just like the yellow pages and newspaper who came before, the audience that watches linear TV is now consuming that same content via the internet.

New consumer research from Leichtman Research Group finds that 80% of U.S. TV households have at least one Internet-connected TV device, including connected Smart TVs, standalone streaming devices (like Roku, Amazon Fire TV, Chromecast, or Apple TV), connected video game systems, and/or connected Blu-ray Disc players. This is an increase from (A) 74% in 2018, 57% in 2015, and 24% in 2010. (source)

How often are we watching our connected TVs? 40% of adults in U.S. TV households watch video on a TV via a connected device every day. (source)

And among those with any connected TV device, 64% have three or more devices — with an average of 4.1 devices per connected TV household. (source)

Bruce Leichtman, principal analyst for Leichtman Research Group had this to say: “The data in this study indicate that there are now nearly 400 million connected TV devices in U.S. TV households. This is an increase from about 250 million connected TV devices in 2016.” Leichtman said the data does not even include pay-TV set-top boxes that can access the Internet. (which is also a version of connected TV). (source)

Have I made my point? With the death of the print yellow pages and the state of printed newspapers, not to mention the rise of streaming audio, is this any surprise?

According to Paul Harrison, Simpli.fi’s Chief Technology Officer, “All Linear TV as we know it will become CTV.” He recently told me that he purchased a TV for his daughter and that even if he had wanted to use it as a traditional TV, the setup process REQUIRED an internet connection and an email address.

He pointed out that the minute the cable companies committed to the “TV Everywhere” concept, they were embracing connected TV.

Finally, Paul told me that the audience watching CTV isn’t necessarily a different audience than the one that watches Linear TV. He said there’s a perception that baby boomers still rely on antennas and cable or satellite, but that his mother (who is in her 70s) also watches CTV. I can back this up with a similar story. In fact, when she moved into her new apartment, I convinced my mother not to spend her money on cable, thinking instead that I’d save her a little money by sharing all my CTV passwords with her.

The point is, we’re all migrating to CTV. Everyone from early adopters to seniors are finding themselves watching television streamed into their homes via the internet.

This leads us to the second reason one might consider investing in CTV: Incremental Reach.

 
INCREMENTAL REACH

Because so many of our eyeballs are moving to CTV, advertisers need to move into that space to reach the cord cutters. But a move to CTV also brings them incremental reach because there is a whole generation of cord NEVERS that they don’t currently have access to via linear TV.

According to Pew Research, almost 40% of people without traditional TV have never subscribed to it in the first place. (source)

57% of those aged 18-29 cite high costs as the most significant reason they won’t go the cable route. The percentage is even higher with those who are older – 72% of 30 to 49-year-olds and 77% of those over 50 share the same sentiment. (source) These are the folks most likely to enjoy free ad-supported video on demand CTV services like Pluto, Tubi and Plex.

But incremental reach doesn’t just mean reaching a new audience. It can also mean more access to your current audience.

Even cable and Satellite subscribers are embracing the concept of “TV everywhere” and watching their favorite channels through vMVPDs (or virtual multichannel video programming distributors). The likes of HGTV, The Discovery Channel, Fox News and many others are available through linear of course, but are also available via streaming apps on Connected TV.

So the person who was previously only able to watch their content on their television at home can now take it with them wherever they go. That means more screen time and more opportunities to reach prospects with ads.

I can tell you from personal experience that when I’m traveling for work, I’m so committed to CTV that I bring my own CTV device to the hotel TV so that I can watch what I want to watch, not whatever is on the local channels where I’m staying.

Bottom line, TV streaming over the internet means advertisers have the ability to reach a new audience that has never subscribed to linear, while also having even more access to their current audience who is now consuming more TV than ever, on any screen, anywhere.

This next reason to embrace connected TV is my favorite. I’m taking about precise audience targeting.

 
PRECISE AUDIENCE TARGETING

Before we jump into the benefits of audience targeting via CTV, let’s talk about how advertisers target their audiences on linear TV.

It’s not uncommon for an advertiser who sells… makeup, for example, to say something like, “We’d like to reach affluent women between 18 and 34.” Or an advertiser who sells hearing aids to say, “We want to reach seniors over 65 and the children of seniors.”

Let’s take these two examples and run with them.

You want to reach affluent women. Okay, what are they watching? Most advertisers lean on Neilsen’s data which uses a technique called statistical sampling to rate the shows.

Nielsen creates a “sample audience” and then counts how many in that audience view each program, making note of their age and gender. Nielsen then extrapolates from the sample and estimates the number of viewers in the entire population watching the show.

Ever wonder how large that sample audience is? According to data I found on howstuffworks.com, there are 121 million TV households in the U.S., and Nielsen provides estimates for viewership based on a panel of around 20,000 households that report their viewing patterns on a daily basis. (source) That’s 0.016% of the TV viewing population, or about one and a half people per 1000. I’ll let that sit with you for just a moment.

This is the standard targeting methodology that advertisers have accepted for decades, but now that CTV has more insight into who is watching what, Nielsen’s tactics are being scrutinized. In fact, the Media Rating Council recently stripped Nielsen of its National TV ratings accreditation.

Nielsen’s issues aside, let’s go back to our scenario.

Our makeup company wants to reach affluent women aged 18 to 34. Linear has no way of targeting that exact audience so they use programming as a proxy to reach them, choosing to advertise on shows they believe (or that someone is telling them) are an audience of affluent women.

Maybe it’s a reality TV dating show, or Grays Anatomy or The Good Wife. That sounds reasonable, right? But it could be totally wrong too. I’m a little embarrassed to admit it, but I’m a card carrying member of Bachelor Nation. True story. Don’t judge.

Why did I share that with you? The advertisers who choose to advertise on The Bachelor probably wouldn’t be keen to hear that their commercial is being delivered to this 50 year old male.

Ask yourself, do you watch anything that would be considered outside of your demographic? Men, do you only watch “masculine shows?” And ladies, you’re probably not just watching feminine shows. (whatever that even means, right?!)

And what about a show like American Idol and Modern Family? Who is watching them? Don’t they appeal to all age groups and genders? I certainly know people of every demographic that watch shows like those. So if you’re advertising on a show that isn’t specifically created for a male or female demo, or a specific age, is that targeting at all?

Let’s talk about the hearing aid company. What shows are aimed at “an older audience”? You might assume a show like NCIS would be a good fit, right? Well I just so happen to know a thirteen-year-old who will tell you that NCIS is her all-time favorite show. There are exceptions to every assumption about audience when it comes to reaching them via a specific program.

Okay maybe, in an effort to reach seniors, you target based on time of day. You run your ads on daytime television because you want to reach individuals who are retired. Hello? Have you noticed how many people work from home now? I’m not saying that I’ve ever snuck away from my desk at 3 o’clock to watch Ellen, but I’ll bet some people who work from home have.

These are just two examples of how using programming or even time of day as a proxy to reach a target audience might not be the best methodology.

I hope I’m not painting a picture of doom and gloom here. With its ability to broadcast a message far and wide, Linear TV is the king of reach. Even if, say 95% of the audience isn’t the target market (I’m thinking about so many of those prescription medication commercials we all see), there’s still a very good chance that ENOUGH OF the target market will see the commercial for it to be a wise investment.

Advertisers understand that, as long as their message is reaching “enough of” their target audience, they can live with the wasted ads.

How is it different on CTV?

On one hand, it’s not at all. Many advertisers are buying CTV exactly the same way they bought linear, using the programming as a proxy to reach their audience. They pick and choose the shows or channels where they want their ads to run. And there’s nothing wrong with that. Simpli.fi is happy to utilize private marketplace deals to place ads where advertisers want them when possible.

Still, we think that it’s worth asking the question, “do you REALLY WANT to reach an audience of affluent women 18 to 34?” Because coming from a targeted digital world, we take that very seriously.

And in fact, Simpli.fi has the ability to target EXACTLY that audience. Here’s how:

Utilizing data, Simpli.fi can identify households within a certain geography where the household income is considered “affluent.” For the purposes of this example, let’s say that means a household income of 150 thousand dollars or more. Utilizing additional data, we can then identify households where a female between 18 and 34 is present.

Once we have that list of households, we build geo-fences around those homes and deliver the advertisers’ ads directly to the digital devices – including connected TVs of those homes. A geo-fence, by the way, is simply a virtual perimeter that is used to collect location data. Or said another way, we can literally show your ads to the households where your exact target audience is.

How about the hearing aid company? Utilizing data, we can target households that include individuals over the age of 65 (or maybe they want to get to them a little sooner, so whatever age the advertiser wants to target). We can even target households composed of multiple generations like child, adult, and parent so they can not only reach the senior, but also the child of the senior.

The digital world has been targeting based on data for over a decade. It allows advertisers access to multiple tactics that can reach hundreds of audiences of all shapes and sizes. Tactics like Site retargeting, search retargeting, contextual targeting, geo-fencing, CRM targeting and demographic targeting have been working for advertisers with display for years and now they can apply the same precision targeting to the world of connected TV.

And let’s not forget about geo-targeting. Linear TV often targets areas that are larger, often much larger, than local businesses can service. Ideal for targeting a DMA, this often means wasted ads on prospects who are unwilling to drive the distance to the advertiser or prospects that are too far for the advertiser to service.

With CTV, advertisers can target areas as small as a neighborhood, or a zip code, or specific neighborhoods or zip codes.

Take my home town of Kansas City for example. I live on the Kansas side, so when I see an ad for a business on the Missouri side, it might be as much as an hour away. It might even be an attorney or another kind of professional who is only licensed in Missouri. More waste.

And don’t even get me started on politicians. Every time there’s a political race, I get to see ads for Kansas and Missouri, even though I can only vote in Kansas. With CTV, not only can politicians target one state or the other (even when DMAs cross state lines), they can even target specific congressional districts.

CTV finally fulfills the promise of ads that target the right audience, in the right geography.

As Frost Prioleau, Simpli.fi’s CEO likes to say, “Content based demographic targeting (as is used by most linear TV advertising) is fine for products bought and used by a large percentage of the population (like beer, toilet paper, cars, toothpaste, etc.), but is inefficient for products with more targeted audiences (luxury autos, B2B products, political ads, etc.). Focusing budget on appropriate audiences, even at a higher CPM, makes sense for many advertisers.”

I could go on and on about targeting, but it really comes down to this simple distinction:

Linear TV defines its audience by assuming what consumers are watching. CTV defines its audience using data that identifies who they are with no concern about what they are watching.

Now let’s talk about:

 
ATTRIBUTION

attribution – the ability to measure the impact of CTV advertising. Before I dive into the things that we can measure with CTV, indulge me for a moment for a story. Back when I was selling yellow pages, I was working with an advertiser and asked him how he tracked all of his advertising. Like a lot of advertisers before the internet came along, he said he asked his customers how they heard about him.

Setting aside the fact that he surely wasn’t able to ask EVERY customer this question, he told me that quite a few of his customers claimed to have heard his ad on the radio. Thing is… he didn’t run any radio adverting. And that wasn’t uncommon. Before the internet, advertisers struggled to determine how effective their traditional media was, often resorting to crossing their fingers and saying things like, “Hey, business is up, so it must be that TV commercial I’m running.”

When the internet came along, it suddenly started getting all the credit for driving traffic to the business, even if the advertiser was doing a lot of traditional TV. Advertisers would ask, “how did you hear about me?” and the most consistent answer they started to hear was “I found you on Google.” Okay, sure, Google was probably how they found your phone number or address, but they also saw your TV commercial, drove by your billboard, while listening to your ad on the radio. But when asked, “how did you hear about me?” the easiest and most top of mind answer was… “I found you on Google.”

Today, traditional TV advertisers are employing some clever ways of measuring the impact of their commercials. They can look at their google analytics to see if there are spikes in traffic at the times when their commercials run. Some are using QR codes that they hope people will scan from their sofas. And of course, they can put a call tracking number in their commercial to try and track those who are so motivated by the commercial that they take immediate action by calling. Pretty clever strategies, but even these don’t tell a complete story. They really only measure the activities of those who are motivated to take immediate action after watching the commercial.

What about the prospect who sees the commercial, doesn’t take immediate action, and then visits their website later in the day or on another day… or they skip the website completely and just go to their store?

Another thing that linear TV can’t tell advertisers is how many people were delivered their ad. Using that Nielsen data, they can get an estimate of viewers, but that’s all it is – an estimate. There’s really no way of accurately knowing how many potential customers were viewing any given show at any given time – at least not in the way that CTV can.

So let’s explore that.

What kind of reporting and attribution is available with CTV?

First of all, CTV is usually purchased on a per thousand impressions basis – meaning that the advertiser may buy 100,000 ad impressions or a million ad impressions or whatever might make sense for their business. Because the ads are delivered one at a time, advertisers get a report at the end of their campaign showing just how many ads were delivered.

So if your advertiser runs a campaign with a million impressions, you can pretty much count on a million ads being delivered – and in fact, sometimes companies like Simpli.fi even over-deliver a bit.

Completion rate is another metric that can be measured. CTV ads can’t be skipped so they normally deliver in the high 90% completion rate, meaning nearly every ad is watched completely through. Why not 100%? Well, it is possible for someone to stop watching their entire program in the middle of a CTV commercial, but that doesn’t happen terribly often.

CTV can also show you on which devices the ads are being delivered. We can show an advertiser that their ad was delivered on Samsung Smart TVs, or LGs, or via Amazon Fire Sticks or Rokus or Apple TVs, or whatever device is being used to stream the content – and that includes laptops, tablets and smartphones too.

We’re also able to show on what OTT apps CTV ads are delivered.

But those metrics simply prove that the ads the advertiser ordered got delivered. That’s nice, but more and more advertisers want some kind of metric that proves their ads are working. I want to talk about performance marketing.

CTV ads can’t be clicked. (I know there are some exceptions, and some new tech is being proposed in this space, but for now, it’s accurate to say that most CTV ads can’t be clicked.) So if the ads can’t be clicked, how can advertisers know that the prospects are taking action?

Measuring actions associated with CTV ads is made possible with the use of cross-device matching.

This isn’t a webinar about cross-device matching, so I’m not going to take the time necessary to explain HOW cross-device matching works, but I do want you to know what it is.

Basically, it’s a graph of data that identifies all the devices that belong to the same individuals at the household level. Or said another way, we’re able to see that a CTV, a laptop, a tablet, and a phone all belong to the same person or are from the same household.

Why is that important? Because after a CTV ad is delivered to a prospect, there’s a good chance they are going to take some kind of action that IS measurable on one of their other devices.

For example, if they visit the advertiser’s website from one of the devices that is cross-device matched to their CTV, we can measure that visit and tie it back to the household where we delivered the CTV ad. This allows us to measure website traffic and engagement.

Better yet, if they visit the advertiser’s store, they probably have their smartphone with them. And because most of us keep our location services enabled and we often have many many apps running at a time, when that smartphone enters the geo-fence that we’ve built around the advertiser’s store, we can see that a device from the same home where we delivered their CTV ad has come to their store. AKA Foot traffic conversions.

This is true performance marketing. The ability to measure the online and offline actions from the households where the CTV ads are delivered. THIS … is very exciting to linear TV buyers who are tired of asking their prospects, “how did you hear about me?”

By the way, this ability to measure the impact of the advertising leads to another advantage that CTV has over traditional TV:

The ability to optimize the advertising campaign.

 
OPTIMIZATION

Let’s say that we’ve run a CTV campaign for an advertiser who is targeting that affluent audience I described earlier. And let’s say that the campaign isn’t working quite as well as everyone had hoped. And by working, I mean that it isn’t driving a lot of activity on the advertiser’s website or a lot of foot traffic to their store.

First of all, YAY that we even know that it’s not working! That’s new information, right? With a linear campaign the only way to know that it didn’t work would be if there was zero increase in sales. And even then, it may be that the campaign was too small, or it may have been running on the wrong shows or there could be any number of reasons that it isn’t working. No way to tell.

But when we see a campaign that isn’t performing as well as we’d hoped, that doesn’t mean we should abandon it. It means we should optimize it. Remember how I defined affluent earlier? I said we could target households that made more than $150k. Maybe we’re reaching an audience that isn’t interested in what the advertiser sells. Maybe we should change our audience and target households that make $75K.

Or maybe we should target a different neighborhood or zip code. Maybe we should change out the creative or the frequency of how often we deliver the ads. There could be any number of reasons the campaign doesn’t work right out of the gate, but with the addition of data to the equation, now we have some levers to pull and buttons to push that could change the effectiveness of the campaign.

And with the ability to track actions, we can see the impact of these optimizations. Who knows, a simple adjustment could increase foot traffic significantly. And when we see things working, we can do more of them.

 
COST

Let’s talk about cost briefly. Many linear TV advertisers struggle with this because linear TV often reaches a much larger audience for less money.

I’ve got a couple of thoughts on this.

The first, relates to the targeting I mentioned earlier. I contend that when a product or service has a specific target audience, linear may reach more individuals overall, but that the majority of those people simply aren’t interested.

Have you seen a commercial for a University or college lately? Maybe you don’t even know because you have no plans to attend college, or maybe you’re done with college, so you may not have noticed an ad like that.

In fact, research shows that only 10% of the U.S. population is in enrolled in college. It’s probably safe to say that that same amount or less are LOOKING to enroll in college, right? That means that when the school runs their commercial, maybe only one in ten of the recipients are potential prospects.

But what if the school could show CTV ads to a more relevant audience? What if they could (A) target households that include children age 13 to 18, or individuals whose search behavior indicates that they are looking to go to school? If that campaign cost even 10X more than the linear campaign, wouldn’t that be as valuable? It may cost more to reach the exact right audience, but there is little to no wasted ads.

Speaking of wasted ads, this is really applicable to those advertisers who have to target a whole DMA with their commercials when they only service a part of that DMA. CTV solves that problem with precision geo-targeting.

Secondly, we know that in order to get the cost of linear TV campaigns down, advertisers ask for a certain GRP. The linear TV seller may place a percentage of their commercials within the requested content (i.e. the news, or the bachelor or NCIS), but it’s pretty standard that they also deliver their commercials on some less popular shows, or they’ll deliver the ads late at night when the inventory is less expensive.

Or said another way, they BLEND the programming in order to give the advertiser what they requested at the price they can afford.

Over on the digital side, we also have strategies that can bring down the price. We really like targeting our relevant audiences using data, so we keep that in place. Our version of blending may involve delivering some pre-roll ads or display ads – which are less expensive than CTV ads – but STILL targeting a relevant audience.

Or said another way, if the proposed CTV campaign is more than a client’s budget, combining their CTV ads with pre-roll video ads, mobile display and desktop display ads, can bring the overall price down. It’s similar to what linear TV does (blending to bring the price down) but blending with CTV still targets a relevant audience.

Think of it like this. If I offered you a new kind of gas for your car that cost twice as much as regular gas, you’d probably scoff at first, right? But when you learn that this new gas more than doubles your miles per gallon, and comes with other advantages, then price shouldn’t be the reason you don’t use the new gas, right?

I guess what I’m saying is that if the price of CTV is the reason you haven’t added it to your mix or your advertiser’s campaigns, we’d like you to consider that a targeted audience means less wasted ads. And if the investment is still too high, blending with online video and display is a great way to reach the right prospects for less money.

 
BEFORE WE CLOSE

Before I leave you, I’d like to point out that I’m not suggesting that advertisers abandon linear TV. With its ability to create awareness and reach a large number of people, it still has a great deal of value. While targeting an audience that has shown interest or fits a demographic is awesome, sometimes it makes sense for advertisers to get their message out to everyone – to try and feed the top of the purchase funnel.

For example, I’m not currently shopping for furniture. That means no behavioral data exists that would warrant targeting me. But if the local furniture store was advertising their big Memorial Day sale to everyone, and I happened across their ad, I could possibly be persuaded to upgrade my sofa or mattress. See what I mean? I’m not actively shopping for furniture, but sometimes a good ad or a good deal PUTS people who aren’t currently in the market for their products into the purchase funnel.

Also, an added bonus of running both linear and connected TV is that you can use what you learn from the CTV metrics to inform your linear campaign. For example, if you optimize the campaign and discover that more men are interested in your product for example, or that you were targeting the wrong age group or something, you can adjust the programming where you deliver your linear ads to try and sync up and match what you learned from your CTV campaign.

To recap the most important points… we hope you’ll consider adding CTV to your linear campaigns so that you can reach the people who are consuming both linear and connected tv, as well as the cord cutters and the cord nevers. That you’ll make use of precision audience targeting, attribution and the ability to optimize your campaigns for better results. We hope you’ll look at the investment with new eyes – eyes that recognize the value of targeting and eliminating waste, even if it costs a little more initially, it means less wasted ads on the people who don’t want your product.

 
THANK YOU

Thank you for your time today. If you’d like to learn more about any of Simpli.fi’s solutions, please reach out to your Simpli.fi account manager, visit Simpli.fi, or send an email to hi@simpli.fi.

I’m David McBee and I’ll see you next time.

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