Connected TV 5 Min Read

Stop Using DMAs: Connected TV Offers a Better Way

Written by Tim Edmundson

Linear television and precision targeting—two things not often heard in the same sentence. And a main reason for that is down to three letters: DMA. Standing for Designated Marketing Area, these are how advertisers target geographic audiences on linear television. They can then narrow their audience a bit more by targeting based on programming and networks, but those don’t truly provide a level of precision that can be considered reliable. Regardless of any other targeting they may elect to do, if they’re running ads on linear TV they need to use DMAs—and that can be problematic when trying to reach a specific, geo-targeted audience.

Why? Because DMAs are massive. Say an advertiser has retail locations in the city of Los Angeles, and they want to drive more foot traffic to their stores. If they run ads in the Los Angeles DMA, their ads will not only hit all of LA county, but also the surrounding 50,000 square miles—encompassing geography that reaches all the way to the Nevada border. If the Los Angeles DMA were a state, it would rank top 5 in population.  

Imagine all that budget wasted on countless uninterested viewers who live nowhere near the store locations. By using DMA targeting, ads were served to someone in Baker, CA—3 hours and 22 minutes away (not including traffic). That’s a terrible way to spend ad budget. This same story plays out across the country—consider the fact half of the state of Delaware falls under Philadelphia’s DMA (and the other half belongs to a Maryland DMA) and it’s not hard to see how wasteful they can be. 

Better Geo-Targeting Through Connected TV

Fortunately, a best practice has emerged for better geo-targeting on TV. Viewers have turned to Connected TV (CTV) to stream television content in record numbers—according to Nielsen, total streaming time has increased 81% year over year. With the rise of CTV, advertisers have a new, more precise option than relying on massive DMAs. CTV grants them the ability to target viewers near their stores based on how close they want to get:

  • City
  • ZIP Code
  • State
  • Country

Advertisers can mix, match, and even exclude the above criteria for better precision. Going back to the Los Angeles example, if the advertiser wanted to target viewers in LA but only in particular ZIP codes due to the proximity of their store locations, they can set their ad campaign to reach viewers across the city but exclude any ZIP that’s just too far away to be effective. This ensures their ads serve exclusively to viewers who live just a few miles away and will likely pay a visit.

This level of targeting is made possible due to CTV being a combination of digital and television advertising. Because CTV ads use audience-based targeting, they’re served directly to the viewers advertisers deem most valuable to them. For example, SteelHouse Performance TV, our CTV ad solution, taps into tens of thousands of audiences from the Oracle Data Cloud to find viewers based on geography, interests, demographics, and more. This presents advertisers with the opportunity to spend their ad budget on viewers who are likely to convert, rather than on those who are either uninterested or too far away to matter. 

Swap Waste for Precision

Ad budgets are a finite thing and need to be spent wisely, and linear TV’s DMA geo-targeting capabilities are just too wasteful. With its digital-born targeting advantages, CTV advertising just does not have that problem. 

Advertisers with location-specific needs should look to CTV for a better return on their TV ad spend. More viewers are streaming television now more than ever, and when you combine that with CTV’s ability to reach the viewers that matter most, it makes for an opportunity worth pursuing.