Connected TV 5 Min Read

As Linear TV Ad Buys Get Pricier, Advertisers Look to Connected TV

Written by Tim Edmundson

Advertisers are attempting to navigate the new media landscape, and that’s made for some interesting developments in television advertising—both on linear and Connected TV.

AdAge recently published their list of the most expensive shows on network television, and of the 80 returning shows they track, 38 of them saw price increases for their ad inventory. Prices remained the same for 22, while only 21 saw prices fall. 

Here’s the top 10 priciest shows from that list (based on a 30 second spot):

  1. NBC | Sunday Night Football | $783,718
  2. FOX | Thursday Night Football | $624,626
  3. NBC | This is Us | $476,352
  4. NBC | The Voice (Monday) | $254,224
  5. FOX | The Masked Singer | $225,764
  6. NBC | The Voice (Tuesday) | $216,970
  7. ABC | Grey’s Anatomy | $213,829
  8. ABC | The Bachelorette | $170,278
  9. CBS | Young Sheldon | $157,213
  10. ABC | The Bachelor | $154,886

75% of the top network shows either rose in price or stayed the same for the upcoming 2020-2021 season, which is actually a bit surprising. These price increases come on the back of years of price declines for major networks’ top shows, coinciding with linear television’s declines in viewership. Per Nielsen, broadcast networks saw a 20% drop in viewership in 2019 vs. 2014, with an even steeper drop (35%) among adults aged 18-49.

The COVID-19 epidemic changed the narrative though. TV viewership spiked dramatically for both linear and Connected TV in 2020 thanks to stay-at-home orders. More Americans stayed home and tuned in—which seems to have reversed the fortunes for the network TV ad business. 

Thus, the money has started pouring in. But will it last? Or did advertisers overpay for 2021? The numbers seem to suggest that’s the case for traditional linear television.

Linear TV Ratings are Heading Back Down, But Not Connected TV

The uptick seen in the early days of COVID-19 seems not to have stuck for linear TV. Research analysis of Nielsen data showed a decrease of 15% to 20% in July versus the same time last year, despite a 5% increase in March and April. 

The return of sports surprisingly hasn’t helped viewership either, with every single major sports league posting double digit ratings losses versus 2019. Both the NBA Finals and the World Series reported some of the worst ratings in their history. That doesn’t bode too well for the advertisers who spent big on the NFL. 

Linear TV may be falling back down to pre-COVID levels (or even worse), but Connected TV has consolidated its gains. Time spent streaming by viewers has continued to outpace last year’s numbers by significant margins, with Nielsen reporting a 74% increase year over year. 

So what does this mean for advertisers? Is linear TV’s decline bad news? Not so—in fact it’s looking to be a net gain as Connected TV rises to prominence.

Connected TV Advertising Outclasses its Linear Counterpart

Don’t let those massive price tags up top fool you. Advertisers may be eager to shell out big budgets for linear TV ad buys now, but this year’s price increases will most likely be an outlier. The viewership trends just aren’t in its favor any longer, and it’s likely we’ll see linear TV’s ad buys return to the mean and continue their decline. 

Connected TV’s strength, meanwhile, isn’t just limited to its increase in viewership. It offers a better advertising solution than linear television. It functions more like a digital ad channel,  complete with advanced audience targeting and accurate measurement. 

Both of these are absolutely critical for advertisers in today’s uncertain climate, where revenue matters more than ever. Ad impressions can’t be wasted en masse on uninterested viewers, and advertisers can’t deploy campaigns without some sort of assurance they’re generating the desired results. Connected TV advertising delivers both of those needs, while linear television cannot.

Better Targeting, Better Measurement

Advertisers looking to reach their audience, even those who are watching the top 10 network shows, can do so on Connected TV. Of the top 10 priciest ad buys on linear, everything except Sunday night football is available on ad-supported streaming services. And these audiences can be reached far more efficiently on streaming television, and at a much lower cost per impression. 

That’s because it operates on an audience-first targeting approach. That means: 

  • Rather than attaching ad buys based on shows or networks, ads are served to an audience regardless of what they’re watching. 
  • This programmatic approach ensures ad budget is spent solely on viewers who the advertiser wants to reach. 
  • So instead of dropping $600,000 on an ad buy to reach viewers in their target demo on linear TV, advertisers can reach that same audience at a fraction of the cost via streaming. 

And there’s not a drop off on content quality, either. SteelHouse Performance TV, our Connected TV ad solution, offers Living Room Quality inventory which ensures ads are only served on top-tier streaming networks. This approach ensures advertisers maintain the prestige of TV advertising, but with a far more efficient spend. 

That efficiency is monitored via reporting capabilities that offer the same metrics found in digital advertising. 

  • Everything from revenue generated by the ad campaign, to the total number of website visitors can be accurately reported via cross-device measurement, 
  • Cross-device measurement tracks viewers online actions from device to device, giving insight into the full customer journey. 
  • SteelHouse advertisers use our proprietary Cross-Device Verified Visits technology to track when a viewer sees an ad, all the way to when they visit the advertiser’s website and convert.
  • And it’s fully integrated into Google Analytics, so they can compare campaign performance right alongside the rest of their digital channels.  

Advertisers are Making the Move to Connected TV – You Should Too

eMarketer estimates ad spend on Connected TV will reach $10.81B by next year, and we expect that number to climb even higher. And as more viewers make the switch to streaming, more advertisers will follow suit and drive that number even higher. 

Interested in learning more? Schedule a demo of Performance TV and we’ll run you through everything you can do on Connected TV.