Sponsored by Samsung Ads • August 22, 2024 •
Justin Fromm, head of insights, Samsung Ads
For years, advertisers have prioritized navigating the linear and streaming TV landscape, with ongoing efforts to reach viewers effectively and drive business outcomes. Keeping pace with the evolving ecosystem remains a significant challenge as audiences consume more content across more platforms and cross-platform measurement remains difficult and inconsistent.
Marketers have recognized the advertising opportunity with streaming and CTV, and leaned in, with growth projected to continue. According to the IAB, total digital video ad spend including CTV, social and online video is projected to grow 16% in 2024. CTV, in particular, is expected to increase by 12% to $22.7 billion in 2024 — 32% faster than media overall.
While advertisers recognize CTV’s ability to reach their desired audiences, modern TV viewing is multichannel. Successful TV advertising campaigns require a strategic share of budgets across both linear and streaming — the key is determining the optimal balance between the two. Advertisers need actionable viewership insights across the TV landscape to achieve this balance.
As viewing behaviors shift, linear becomes incremental to CTV
“The Rule of 40,” first published in 2021, called for 40% of TV budgets to move to CTV to reach audiences effectively, given viewer behavior at the time. Fast forward to 2024, and viewing behaviors have shifted further. According to Samsung’s proprietary data, 63% of its Smart TV viewers spend more of their TV time with streaming content than with linear TV. These viewers use streaming as their primary viewing source — many don’t consume any linear at all. Additionally, now that streaming content is no longer primarily ad-free, strategies need to shift.
Samsung Ads evolved its “Rule of 40” report to help advertisers reach these growing streaming-centric viewers. Samsung Ads used its proprietary automated content recognition (ACR) data, which identifies all content and ads that air on linear TV, to understand the capability of linear ads in reaching streaming-centric viewers.
Using ad campaigns across several industry verticals, the team built a reach curve analyzing the delivery of linear ads to streaming-centric viewers.
Even the largest linear ad campaigns reach only 17% of the streaming-centric audience (a campaign delivering 1,000 linear gross rating points [GRPs] would reach 16.6% of streaming-centric viewers). This means that linear ad campaigns cannot reach 52% of the total TV universe, so, it’s time for marketers to rethink how they approach TV advertising. The paradigm has shifted: linear is now incremental to CTV.
With the growth of ad-supported streaming, marketers can now reach most streamers with their advertising — both streaming-centric viewers and viewers who use streaming to supplement their linear viewing. Samsung Ads’ internal data show that ad-free viewing has declined every quarter over the last year and ad-supported streaming now accounts for nearly two-thirds of streaming time.
CTV’s power extends beyond reach
To make a meaningful business impact, it’s essential to start with streaming and CTV, fully exploring its capabilities as a powerful tool for driving outcomes. CTV allows advertisers to go beyond extending reach — it transforms how advertisers connect with their desired audiences. With dynamic, interactive ad formats, advertisers can drive immediate viewer engagement and action from the largest screen in the home. CTV unlocks new optimization, measurement and attribution possibilities, ensuring ads are seen and effective.
While the “Rule of 40” has been a suitable north star for advertisers to aim for, it can no longer be just a suggestion. It’s time to revisit long-held assumptions that linear TV budgets should lead allocation. For the modern multichannel viewing experience, TV advertisers are making CTV the foundation of their strategy for efficient and effective reach, incorporating linear TV to reach the incremental viewers remaining there.
Sponsored by Samsung Ads
https://digiday.com/?p=553340
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