In recent years, the advertising space has experienced a notable shift towards connected TV (CTV) advertising, largely driven by the growing popularity of streaming services. In July 2023, streaming achieved a record-breaking milestone, securing 38.7% of the total TV usage share. This has understandably caught the attention of advertisers and marketers who are eager to capitalize on this growth.
However, maintaining a balanced perspective is crucial. Despite the dominance of streaming services, linear TV, with its traditional broadcast format, should not be hastily discounted. In 2023, linear TV’s share of total TV viewing dipped below 50% for the first time. Yet, it still holds a considerable audience base that savvy marketers can’t afford to overlook.
Forecasts by Insider Intelligence in June 2023 indicated that 235 million, or approximately 69% of the US population, were expected to tune into linear TV. Moreover, major events like the US presidential election and the Olympics are expected to boost linear TV ad spend to an impressive $60.56 billion in 2024.
That said, the real game-changer lies in the technological advancements enabling advertisers to target linear TV audiences with the same programmatic precision previously reserved for digital advertising. This development presents a powerful tool for advertisers to diversify and strengthen their campaigns across both digital and traditional platforms.
Considering the advancements in programmatic deployment across both streaming and linear TV, it begs the question: what differentiates them? The answer lies not just in the content delivery methods but also in the unique audience dynamics and engagement opportunities each platform offers.
Streaming Vs. Linear TV: What’s the Difference?
Linear TV refers to traditional television broadcasting where a network schedules programs and viewers tune in at specific times to watch. This is the classic form of TV viewing, where programming is broadcast over cables or airwaves.
Morning news shows like “Good Morning America” or evening news programs like “World News Tonight” on specific channels at designated times are all classic examples of linear TV.
Characteristics of linear TV:
- Scheduled programming: Shows and movies are aired at specific times. For example, a popular TV show might air every Thursday at 8 PM.
- Channel-based: Viewers flip through channels to find something to watch.
- Live events: Linear TV is the go-to for live events like sports, award shows, and news broadcasts. Programs are typically broadcast live, and viewers see the content as it happens in real time.
- Limited interactivity: Viewers on linear TV have limited control over the viewing experience. They cannot pause, rewind, or fast-forward live broadcasts.
- Advertisements: Commercials are scheduled and cannot be skipped.
On the other hand, streaming services represent the new era of television. Services like Netflix, Hulu, and Amazon Prime Video allow viewers to watch content over the internet on-demand.
Take Netflix, for example. Instead of making viewers wait a week for each new episode, the platform often releases entire seasons at once. This “binge-watching” phenomenon, fueled by streaming giants, has completely changed how we consume content and added to the convenience.
Characteristics of streaming services:
- On-demand viewing with no fixed schedules: Viewers can watch shows and movies whenever they want. There are no time slots; all content can be streamed anytime.
- Personalized recommendations: Algorithms suggest shows and movies based on viewing history.
- Subscription-based: Typically, users pay a monthly fee for access to a content library.
Flexibility and control: Viewers can stream content on multiple connected devices; download content for later viewing; pause, rewind, fast-forward, and skip commercials; and create separate profiles for different users in the household, each with personalized recommendations and watchlists.
Advantages and Drawbacks of Linear TV Advertising
Linear TV advertising has been a staple of marketing campaigns for decades, and it continues to play a significant role in reaching audiences across the globe. This form of advertising, which involves scheduling ads to air during specific television programs at predetermined times, has both advantages and drawbacks.
Strengths of Linear TV Advertising
One of the primary advantages of linear TV advertising is its ability to reach a wide and diverse audience. Advertisers can target different demographics, age groups, and geographic regions by selecting specific TV channels or programs.
For example, if a new car model is being launched, an advertiser can air commercials during a popular prime-time sports event to reach a broad audience.
TV commercials are known for their ability to create a lasting impression on viewers due to the combination of visual and auditory elements. The immersive experience offered by TV ads often leads to increased brand recognition. Take a catchy jingle or a memorable visual story in a TV ad, for example. Both can linger in viewers’ minds for a long time, boosting brand recall.
Nearly 50% of adults consider TV ads to be more trustworthy than those appearing on other advertising channels, according to MNTN research.
Being featured on established TV networks can lend credibility to a brand or product, as viewers tend to associate ads on reputable channels with trustworthy products and services.
Mass Event Advertising
Linear TV is still the go-to platform for advertising during major events like the Super Bowl, the Oscars, or the World Cup. These events draw millions of viewers, making it an ideal opportunity for advertisers to showcase their products or services to a massive audience.
As an example, brands frequently invest substantial sums to broadcast commercials during the Super Bowl halftime show, knowing that the level of exposure and engagement is unparalleled. Per Statista findings, during the 2023 Super Bowl LVI broadcast, advertisers paid an average of $7 million for a 30-second commercial spot.
Weaknesses of Linear TV Advertising
Producing high-quality TV ads and securing airtime on popular channels can be prohibitively expensive for many businesses (think about the $7 million Superbowl commercial). Smaller companies with limited budgets may find competing in the linear TV advertising space challenging.
While linear TV allows for some degree of demographic targeting, it falls short of the precise audience targeting capabilities offered by digital advertising platforms. Advertisers may reach a lot of irrelevant viewers.
Inability to Measure ROI
Measuring the return on investment (ROI) for linear TV advertising can be complex and less accurate than digital advertising. Advertisers often rely on ratings and viewership data, which may not provide a complete picture of campaign effectiveness. For instance, an advertiser may struggle to determine whether a spike in sales is directly attributable to a TV ad or other factors.
However, the rise of addressable TV is changing how advertisers approach linear TV advertising.
How Addressable TV Is Bringing Programmatic Abilities to Linear
According to Business Wire, 40% of advertisers plan to spend more on addressable TV in 2024, and for good reason.
Addressable TV advertising combines the mass reach of linear TV with the precision of programmatic advertising. It allows advertisers to deliver targeted ads to specific households or individuals based on data-driven insights. Let’s take a deeper look at how addressable TV transforms linear TV advertising:
- Precise targeting: With addressable TV, advertisers can target households based on factors such as income, interests, and past purchasing behavior. This eliminates wasted ad spend on irrelevant viewers. For example, a luxury car manufacturer can show its ads primarily to households with a higher income bracket.
- Data-driven insights: Advertisers gain access to real-time data and analytics, allowing them to measure campaign performance accurately. They can track viewership, engagement, and even offline conversions.
- Dynamic content: Addressable TV delivers dynamic, personalized content to different households within the same ad slot. Advertisers can create tailored messages for various segments of their audience.
- Efficient budget allocation: Advertisers can optimize their budgets by allocating resources to high-performing audience segments, ensuring that ad spend is used efficiently.
Put another way, linear TV advertising offers broad reach and high impact but comes with high costs and limited targeting. Addressable TV is improving things and helping advertisers maximize their campaign effectiveness by introducing precise targeting, data-driven insights, dynamic content, and efficient budget allocation.
Advantages and Drawbacks of Streaming TV Advertising
Streaming platforms offer unique advantages and drawbacks compared to traditional linear TV advertising.
Strengths of Streaming TV Advertising
Precise, Targeted Reach
A significant advantage of streaming TV advertising is its ability to deliver highly targeted, personalized, and relevant content to specific audiences and viewer profiles. Advertisers can leverage user data and preferences to ensure their ads reach the right people.
Interactive and Engaging Ads
Streaming platforms offer interactive features like clickable ads, allowing viewers to engage directly with the content. This interactive element can boost engagement and drive higher click-through rates. Consider how, for example, viewers can click on an ad for a new video game and be taken directly to the game’s download page.
Streaming TV advertising provides detailed analytics, enabling advertisers to track the performance of their campaigns accurately. Metrics like views, clicks, and conversions help assess ROI effectively.
The precise targeting provided by streaming TV eliminates wasted ad impressions on irrelevant viewers, maximizing return on your ad spend. Plus, platforms often offer flexible pricing models and budget controls.
Flexibility and Creativity
Streaming platforms embrace diverse ad formats, from traditional commercials to interactive overlays and sponsored content. This creative freedom allows advertisers to tailor their message to each platform’s unique viewing experience and engagement potential.
Time-Shifting and On-Demand Viewing
While live events on linear TV require viewers to be present, streaming lets viewers consume content in their own time. This flexibility accommodates busy schedules and increases the shelf life of ads.
Weaknesses of Streaming TV Advertising
While streaming platforms offer targeted ads, users may still experience ad fatigue due to the sheer volume of ads they encounter during their viewing experience.
Many streaming services are ad-supported, but some users opt for premium, ad-free versions. This limits the reach of ads and requires advertisers to pay extra to access a broader audience.
Ad Skipping and Blocking
Some streaming platforms allow users to skip or block ads, reducing their effectiveness. Advertisers must find creative ways to capture viewers’ attention.
Streaming TV ads are often limited in length, typically lasting around 15-30 seconds. This constraint can be challenging for advertisers trying to convey complex messages. For example, advertisers promoting a detailed product demonstration may struggle to fit all the necessary information into a short ad.
The good news is that some of these limitations can be overcome with live TV streaming.
Live TV Streaming Services
With the rise of live TV streaming platforms such as YouTube TV, Sling TV, FuboTV, and others, advertisers have a unique opportunity to tap into a growing audience that blends the traditional TV viewing experience with the advantages of digital advertising. These platforms distinguish themselves from traditional linear TV in several ways:
- Programmatic ad inventory: Unlike traditional linear TV, live TV streaming services offer ad inventory that can be purchased programmatically. Advertisers can automate the buying process and use data to target ads more effectively, reaching specific audiences with precision.
- Diverse audience reach: Live TV streaming platforms cater to a wide range of interests and demographics, offering a mix of live sports, news, and entertainment. This diversity allows advertisers to reach specific segments of the audience who are increasingly moving away from traditional TV viewing habits.
- Measurable impact: Similar to other forms of digital advertising, live TV streaming services provide detailed analytics and engagement metrics. This means advertisers can track the performance of their ads in real time, adjust their strategies on the fly, and achieve better ROI.
Live TV streaming can address some of the limitations of traditional streaming and linear TV in a few key ways:
- Access to live content: Traditional streaming services primarily focus on on-demand content, which means viewers can watch shows and movies whenever they want, but they can’t watch live events like sports games, news broadcasts, or award shows. Live TV streaming services bridge this gap by offering live channels alongside on-demand content, providing the flexibility to watch what you want, when you want.
- Cater to specific interests: Many live TV streaming services offer targeted packages that focus on specific interests, such as sports, news, or entertainment. This can be a more cost-effective option for viewers who only watch a limited number of channels compared to subscribing to a traditional cable or satellite TV package that includes many channels they don’t watch.
- Flexible subscriptions: Unlike traditional cable, which often locks viewers into lengthy contracts of a year or more, most live TV streaming services operate on a month-to-month basis. This approach gives viewers the flexibility to cancel their subscription at any time if they’re not happy with it
Ultimately, both streaming and linear TV advertising provide various benefits, but they also have their disadvantages. Achieving success requires a strategic approach that effectively balances these strengths and weaknesses, especially within the ever-evolving digital marketing landscape.
Harnessing the Power of TV Advertising to Achieve Your Goals
Effectively leveraging both streaming and linear TV advertising can lead to successful marketing outcomes. But to maximize results, it’s essential to remember the distinct strategies that work well for each medium.
- Excels at reaching a broad, diverse audience, especially during major events like the Super Bowl.
- Is best for brands with substantial budgets for high-quality commercials.
- Is ideal for building brand awareness through the comfort and trust associated with traditional TV viewing.
- Is great for highly targeted advertising to specific demographics and interests.
- Is a prime choice for interactive and personalized ad formats on various devices.
- Excels at measuring ROI through detailed analytics and engagement metrics.
Making the most of both advertising channels can be challenging, even for the seasoned marketer — that’s why having an advertising partner in your corner is a good idea. At Grapeseed Media, we understand the intricacies of streaming and linear TV advertising. Our expertise allows us to develop customized strategies that align with your brand’s goals and objectives.
Whether you want to reach a broad audience with a compelling message during a big event or target a niche demographic with personalized content, we can help you achieve campaign success, just like we did with the Las Vegas Dome Project.
In 2016, the Oakland Raiders’ proposed move to Las Vegas and their plan to play in a $1.9 billion stadium needed the Nevada state legislature’s approval. Grapeseed Media was instrumental in making this happen, launching an effective online petition campaign that included digital video and CTV advertising.
The results were remarkable and included:
- A 2x increase in the average time spent on the microsite with the petition page
- Driving 35% of the total signatures supporting the project
Click here to learn more about this project and how we achieved these impressive results.