Striking a balance between linear and connected TV ad spending is becoming a challenge for buyers wanting to ensure they reach their targets in both environments. Although viewership is still not equal to linear, connected TV and AVOD (ad supported video on demand) are growing rapidly, both in terms of audience size and dollars from advertisers attracted by the greater targeting a measurement capabilities.
So how are advertisers budgeting to ensure they’re reaching their audiences, including cord cutters and heavy streamers?
Debbie Medeiros, director of communications design at Initiative, says that, from a holistic video planning perspective, connected TV and linear each have an important role to play to drive effective reach.
“Linear TV provides the foundational coverage and builds quick reach, while premium video placements such as CTV and AVOD compliments by extending campaign reach. Understanding the optimal reach threshold for each video tactic and running budget and channel mix scenarios provides guidance on how to budget per channel to achieve the optimal campaign reach, given the variation of how audiences are consuming video content.”
Research from Samsung Ads, based on data from five million of its own Smart TVs and Vividata’s Study of the Canadian Consumer, suggests that to achieve a balance in gross rating points between connected TV and linear, 20% of Canadian TV ad budgets need to be allocated to connected TV.
To come to the 20% figure, Justin Evans, global head of analytics and insights for Samsung Ads, said at a CMA event earlier this month that budgets were simulated at different levels of allocation to CTV.
“What we found is if you’re too low on the CTV allocation, that means you’re over-serving the linear audience. If you get your budget to 20% allocated to CTV, then you’re right in the sweet spot where your target GRP plan is reaching linear audiences and streaming audiences the same amount.”
According to Vividata, penetration of connected TVs has reached 46% in Canada. And while 60% of all Canadians watch a combination of linear and streaming TV, 27% are streaming-only, with connected TV owners watching fewer linear TV broadcasts across content genres. Samsung Ads’ research also found that having too low of connected TV spend would lead advertisers to missing mostly streaming households. In households with Samsung’s TVs, there is an average of just 42 minutes of linear TV consumed each week.
However, looking at allocation purely at the household level leaves valuable data on the table.
“It’s imperative to dissect the target audience, as there are sizeable differences in viewing habits between a Gen Z and millennial, versus a baby boomer, for example,” says Jennifer Bidwell, VP of business solutions at Horizon Media.
Jarrod Charron, also a VP of business solutions at Horizon Media, says that older audiences tend to favour linear TV, whereas younger demos consume more video by connected TV and streaming, but also non-traditional channels such as social and online video. “With more ad-supported options entering the connected marketplace such as Crave and Disney+, we can assume that both linear and digital dollars will start migrating to these platforms, depending on how quickly Canadian viewers develop an appetite for ads within their subscriptions.”
This is why the question of allocating between linear and connected TV needs to consider other video platforms as well. A recent study Horizon conducted with Blue Ant Media found that, outside of live sports, Canadians most prefer comedy content.
“That is easy to find across linear and connected sources and appeals across all demos,” Bidwell says. “But we also learned that social plays a huge role in the discoverability of content which, creates an opportunity to consider Instagram, Facebook and TikTok as part of a video strategy.”
