Advertising, Connected TV 8 Min Read

Linear TV versus Performance TV

Written by Melissa Yap

If you’ve been following this battle series closely, you’ll notice one thing in common: Performance TV is the winning contender, on every level – from both a branding and performance perspective. Today, we’ll take a walk down memory lane as we compare one of the legacy forms of advertising – Linear TV –  against Performance TV. 

Linear TV is defined as the traditional form of TV, which is programmed and watched as scheduled through satellite/cable, and is not streamed to a specific user. It generally caters to prime time viewing, which is when most people are in front of their screens. While Linear TV still holds some form of nostalgia, especially with a mature audience (more on that later), changes in consumer’s consumption habits have affected the way advertisers view linear TV as an advertising tool – in fact, according to media consultancy Ebiquity, linear TV will see an estimated 21% fall in  commercial impact by 2025. Here are some of the main challenges: 

  • Lack of Measurement: From an advertisers perspective, measurement is probably the biggest drawback to advertising on Linear TV. There is no guarantee that commercials will be viewed, and any insights into viewership location is restricted.  Advertisers can only target according to ratings and time of day, instead of audience segments. Targeting is one thing, but measuring conversions is another – how can you accurately track if a viewer visits your website after watching your ad? You can’t.
  • Ad Skippers: A study by Deloitte found that a whopping 86% of viewers skip Linear TV commercials, or are distracted by other activities like channel surfing or viewing their other devices. Given TV advertising comes with additional costs –  such as producing the commercial – it is important to know that their ads are being viewed in its entirety. According to eMarketer, It looks like the average cost per minute for US primetime TV ads is going up by an estimated 13.2% to $36.19 from 2019-2020, with CPMs increasing on Linear TV by at least 8.0% per year. 
  • Shrinking Viewership: Overall, Linear TV viewership is declining in popularity, as viewers shift to Connected TV. A study by Nielsen showed that younger generations are watching considerably less Linear TV than their older counterparts. Viewing among 35-49-year-olds fell by 6.1% year-over-year, traditional TV viewing among 50-64-year-olds declined by smaller 2.4% year-over-year,  and the amount of time 18-34-year-olds as a whole spent watching traditional TV (live and time-shifted) in Q3 2018 dropped by about 17.2% from the previous year. That’s a drop of about 1 in every 6 minutes in just a single year. Linear TV viewing in the over 65+ demographic, however, was down by just 1 minute – in line with industry predictions that this demographic are most likely to hold onto this type of viewing versus younger generations. Oh, and TV commercials are getting longer as a result to overcompensate for the declining viewership – combined with the skippable-ad issue, is a cause for concern.  As such, brands and advertisers looking to reach several segments may find this a risky investment.

Connected TV Enters the Ring

When you look at the combination of rising Linear TV production and advertising costs, a distracted audience and inability to measure results – it’s no wonder viewers and advertisers alike are cutting the cord in favor of Connected TV. Fast becoming the future of  TV as we know it, Connected TV can be accessed across multiple platforms including smart TV, mobile or OTT devices (think Chromecast, Xbox and Amazon Fire Stick). It is estimated that the number of Connected TV users will rise to over 204 million by 2022, roughly 60% of the population, a ripe opportunity for advertisers. Here’s why Connected TV, or Performance TV  as we like to call it, is the one to watch:

  • Performance TV as a Performance Channel: Think of Performance TV as a digital marketing channel like you would your other platforms, where analytics can be quickly drawn and measured. Unlike Linear TV, performance can be tracked down to the minutiae and covers everything from ROAS, CPCV, site visits through to conversions and more – key metrics that many advertisers look to gauge the effectiveness of their campaigns. One key advantage is the targeting capabilities of our platform, which goes above and beyond what Linear TV can do. We’ve partnered with Oracle Data Cloud, to provide third-party data, so you can directly target viewers in your target audience, no matter what they are watching. Our reporting interface is a powerhouse that allows you to easily customize reports across a multitude of metrics at any stage of your campaign. And not only that, Performance TV is fully compatible with Google Analytics, so you can track and measure your performance alongside the rest of your marketing campaigns.
  • Non-Skippable, 15 to 30 Second HD Ads:  Unlike Linear TV – and other forms of digital advertising, like video) – Performance TV ads are non-skippable and can be easily loaded up onto our user-interface in a matter of clicks, and launched within the same platform. Linear TV advertising spots are usually operated by a media buyer, however we’ve eliminated that step completely to put the power back in your hands. 
  • A Triple Threat Trio: SteelHouse not only allows advertisers to build and launch their Performance TV campaign on a single platform, but provide a full ad immersion experience through retargeting this audience with display ads across other devices, such as mobile and laptop. This, combined with Living Room Quality ads across a premium network inventory including CNN, ESPN and Food Network, among 150+ others – makes it a force to be reckoned with. 

It is no surprise that Performance TV is the  clear winner yet again. Who’s next in the ring? Watch this space as we announce our next battle next week.