“On TV & Video” is a column exploring opportunities and challenges in advanced TV and video.
Today’s column is by Elizabeth Herbst-Brady, chief revenue officer at Yahoo.
The explosive growth of CTV and other digital video channels is changing the way buyers are thinking about advanced TV (ATV).
ATV presents a robust set of opportunities for data-driven advertising and measurement. As such, the roles of linear and ATV are changing in the buyer’s media mix. And the efficiencies and targeting capabilities are pushing ATV front and center.
Does that mean ATV is going to supplant linear in buyers’ marketing strategies? Well, it’s more complicated than that – and buyers need to understand how to successfully manage and optimize across both linear and streaming.
As 2022 comes to an end, it’s important to assess the trends that have brought us toward this inflection point and consider where ATV is heading in 2023. Here’s what we’ve learned so far:
Various forms of addressable TV buying are converging
Addressable TV is legacy to linear buying teams. Meanwhile, many digital-first buyers today haven’t been dedicated to it. But brands and agencies are realizing that CTV, digital and addressable linear TV are more effective when silos are eliminated.
TV buyers plan campaigns alongside their digital buying peers. We’re now seeing some agencies, such as Horizon and OMG, doing just that. We’re also starting to see more addressable TV buys at the upfronts, which demonstrates that convergence is picking up steam.
CTV viewership is on track to surpass linear
Time spent viewing linear has been dropping steadily in recent years. In 2023, it’s projected to be neck and neck with time spent viewing digital. Ad spend is even farther along in a parallel trend, with digital’s share projected to top linear’s as soon as next year.
But remember: Viewership of, and time spent with, CTV doesn’t necessarily equate to more ad opportunities. All of this time spent includes streaming via ad-free subscription services. While there are 16 minutes of ads per hour in linear, viewers may be exposed to as few as four minutes of ads per hour in streaming.
There’s an optimal mix of linear and streaming ad spend. Buyers will need to find theirs, per their specific brand and campaign goals.
Buyers will need to reconsider live sports spending
The largest number of premium-level games have typically been reserved for linear, where they’re very highly sought after. But more and more games are making their way to streaming services.
The problem is they’re generally not optimally monetized, considering their potential value.
Meanwhile, the fragmentation of CTV is now increasingly present in the ownership rights of live sporting events, too. To optimize spend, an omnichannel DSP is a critical tool.
Growth of interoperability in linear and streaming measurement and frequency
Buyers need to be able to measure the impact of linear TV on business outcomes. Having automatic content recognition (ACR) and set-top box data (that is, viewership data) is essential to that.
Buyers also need interoperable measurement to enable them to determine optimal frequencies across linear and digital. It’s crucial to see where increasing frequency leads to diminishing KPIs and to manage cross-channel frequency. Fortunately, programmatic platforms offer this ability.
As buyers navigate these shifts throughout 2023, we’ll see a natural progression from where we are now. In 2022, the industry began to fuel the advanced TV rocket ship. In 2023, we’ll really start to see it soar.
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