Streaming TV vs Linear; Challenges & Opportunities

Streaming TV vs Linear; Challenges & Opportunities

Streaming TV ads leverages the best of TV advertising and performance marketing combined to optimize campaigns and maximize ROAS. In our new paper; “The Definitive Guide to Programmatic Streaming TV for Performance Marketing” you can find out from experts such as Roku, AppsFlyer, Samsung, and tvScientific how to plan, buy & measure CTV campaigns.

Linear TV has been the king of the video advertising landscape for decades, but that reign may be coming to an end. Shifting viewing habits, greater adoption of smart TVs, and an ever-greater need for actionable data are forcing advertisers to rethink how much of their marketing mix should be devoted to this legacy channel.

Instead, marketers looking for real-world data on the effectiveness of their video ad campaigns are increasingly turning to programmatic streaming TV ads, which combines the high-quality creative of TV advertising with the raw power of performance marketing. Ad spend in this channel continues to rise — by 2023, advertisers will spend nearly $20 billion harnessing streaming TV’s targeting and analytic power. Read on to learn more about the challenges ahead for linear TV ads and how programmatic streaming TV ads will rise to meet them head-on.

Streaming TV vs. Linear TV

The most significant difference between programmatic streaming TV advertising and linear TV advertising is the delivery mechanism. Linear TV ads are presented through traditional over-the-air, satellite, and cable television networks while streaming services like Hulu, Paramount+, and The Roku Channel deliver streaming TV advertising over the internet.

Both channels provide advertisers with a canvas for displaying eye-catching creative. The television’s presence as the centerpiece of a family or living room ensures that any content becomes the focal point for whoever is watching. Studies show that TV ads command the highest and most consistent levels of attention compared to other forms of advertising.

But that’s where the similarities end. Linear TV is facing an uphill battle, and streaming TV’s unique feature set is poised to meet those challenges head-on.

The challenges facing linear TV

While it still receives the lion’s share of ad spend, linear TV’s control on the video ad market is shrinking, dropping by 14% between 2020 and 2022.

This shift is due in part to several factors:

  • Wider adoption of streaming content: The COVID-19 pandemic has accelerated the adoption of digital methods of entertainment, including streaming. As of 2022, 92% of households are reachable via streaming TV as audiences find new programming sources, and smart TVs become more accessible to the average family.
  • Increased cost of linear TV advertising: There’s no denying linear TV’s total reach, but the cost of advertising and the limited inventory available ensures that only the most prominent brands and corporations can compete nationally. Linear TV advertising is out of reach for potential challenger brands like start-ups and SMBs with limited funds.
  • Lack of attribution data: Linear TV advertising is great for promoting brand awareness campaigns to a large audience. However, the lack of data tracking tools makes connecting advertising efforts with definitive results nearly impossible. Linear TV becomes harder to justify as businesses demand the most efficient ways to spend ad dollars and require data to back up those decisions.

As streaming adoption continues to grow and demographic shifts favor internet-connected entertainment options, adding streaming TV to your marketing mix is vital for ensuring long-term brand engagement and campaign success.

92% of US households are now reachable via programmatic CTV

Bringing digital performance marketing tactics to television

Linear TV spots attempt to reach as broad an audience as possible by design. Marketers buy ad inventory based on reported demographics for accompanying content and design creative to reach as many people as possible within that demographic. This approach is excellent for reaching users in the attention phase of the funnel, but the data reporting for linear TV cannot tell you whether your spots are reaching your intended audience.

Comparatively, specificity makes programmatic streaming TV a powerful performance marketing tool. Advertisers have access to a swath of data about who is viewing streaming TV content, everything from viewing and purchasing habits to household size and composition, income, and more. Marketers can then hone their ad creative to target specific people within a household — especially those most likely to engage with an ad’s CTA — at a far more granular level than linear TV can provide. 

Linear TV campaigns purchased the traditional way are quite inflexible. Advertisers may design a few spots for a campaign, but once it’s running, the campaign is largely hands-off until it’s done. Programmatic streaming TV, on the other hand, allows for incremental testing and on-the-fly adjustments. See what an audience responds to, adjust creative to lean into this new data, and make decisions based on real-time data.

Programmatic streaming TV has evolved to suit performance advertisers who need to analyze CTV’s impact on sales and down funnel KPIs. With cross-channel attribution, marketers can determine if a viewer who was exposed to the CTV advertisement took further action, such as a website visit, Google search, or completed purchase. Some partners are even specializing in retargeting audiences who saw your competitors’ CTV advertisement or similar exposures that indicate some relevancy or intent. 

All this information is at your fingertips and generated mid-campaign, allowing for unprecedented KPI optimization.

CTV ad spend has increased to 18% of the total share of spending, while linear TV has been in steady decline.

A tale of two KPIs

To determine how linear TV and streaming TV differ in their approaches to maximizing ROAS, look no further than the typical KPIs marketers use for each channel:

Linear TV KPIs

Streaming TV KPIs

  • Cost per mille
  • Reach
  • Brand lift/awareness
  • Social media follows/engagement
  • Cost per completed view
  • Cost per acquisition
  • Cost per walk-in
  • Average order value

As you can see, linear TV’s KPIs want to reach as many viewers as possible, while streaming TV’s KPIs are more concerned with reaching the viewers who are most likely to convert and minimizing the cost of acquiring them. Details are more concrete and directly connected to real-world data, thanks to the increased access to attribution across multiple devices and channels.

Discover how streaming TV can elevate your marketing mix

Streaming TV is a relatively new space for many, and we want to make it as easy as possible to jump in and try out this exciting new channel. That’s why we teamed up with some of the most prominent players in the programmatic streaming TV space to bring you The Definitive Guide to Programmatic Streaming TV for Performance Marketing. Learn critical insights about who’s watching streaming TV, how to reach them, and get answers to your biggest questions. Download the guide today and get the most out of your streaming TV campaign.

Want to learn more about the power of streaming TV? Click below to download “The Definitive Guide to Programmatic Streaming TV for Performance Marketing.”