Here’s a little-known fact for you: Neanderthals and modern human beings lived side-by-side, for thousands of years. Though we tend to think of evolution as a straightforward progression from one phase to the next, the fossil record shows that old and new coexisted, shared — even interbred. There’s quite literally a little Neanderthal in all of us.
The same is true in technology: the old ways don’t disappear overnight. Computers and typewriters co-existed for decades. iPhones and payphones existed at the same time. Combination DVD/VHS players were a hot-ticket item. And though Connected TV advertising is definitely the next evolution in TV technology, it coexists with traditional “linear” TV and probably will for quite a while yet.
Linear TV and Connected TV have a lot in common, but there are a lot of differences happening below the hood that warrant discussion. In this blog, we’ll discuss the similarities, differences, and what might carry over from linear to CTV. Read on:
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Linear TV Metrics
Most of us are familiar with one of the key metrics in linear TV ratings: ratings. Why did Star Trek get cancelled? Ratings. What made Seinfeld unbeatable for a decade? Ratings. Why are the American people subjected to year after year of Young Sheldon? Ratings.
TV ratings are the percentage of households or viewers tuned in to a program at a given time, measured by rating points (which are the percentage of the total viewing audience) and share (the percentage of viewers out of people actively watching TV at the time). Traditionally, linear TV ratings have been tabulated by Nielsen — back in the first Golden Age of Television, so-called “Nielsen Families” would agree to have their viewing habits recorded, forming a large enough sample population that Nielsen could extrapolate from there to showcase who in America was watching what. However, though ratings form a huge bulk of linear TV metrics, they aren’t the only ones.
Reach and Frequency refer to the total number of unique households or viewers exposed to an ad within a set timeframe (reach) often based on Nielsen ratings, and how often an ad is shown to the same audience during the campaign (frequency). These are very similar to some of the metrics used in CTV advertisements, but different for a few reasons we’ll get into further down.
Gross Rating Points (GRPs) quantify the total exposure of an ad campaign by multiplying reach (as a percentage of the target audience) by frequency. For example, if an ad reaches 30% of the target audience with an average frequency of 3, the campaign would achieve 90 GRPs.
CPMs are the measure of how much it’s costing to get your ad in front of 1,000 viewers. On linear TV, factors like a show’s ratings, time slot, and audience demographics can factor into your CPMs.
These metrics sound similar to the ones we’ll discuss below, because in many ways linear TV metrics were the precursors for the metrics we use in CTV. But when you get under the hood a little more, the differences begin to become more apparent.
Connected TV Metrics
Whereas linear TV metrics are often based around formulas and extrapolation, CTV metrics are collected far more directly. Though we haven’t yet cracked a way to accurately determine whether a viewer was paying attention to an ad (though we’re working on it), impression numbers now more-or-less accurately reflect the number of times an ad was shown on an active device.
Connected devices send a lot more actionable data back to advertisers than the one-way broadcasts worked in the past, so even if the metrics seem similar by definition, there’s a different level of trust and certainty involved.
Household Reach and Unique Devices collect data on user IP addresses and device IDs. So reach metrics can track both the number of households and individual TV sets, iPads, cellphones, and more, giving a more-complete picture of your impressions and campaign penetration. Cross-referencing these bits of information gradually allows you to assemble profiles of your viewer behaviour.
Completion Rate and Click-Through Rate measure the percentage of viewers who watch an entire ad without skipping. Unlike linear TV, CTV ads can also feature interactive components like QR codes or clickable links, meaning you can now measure viewer engagement based on how many of them follow your ad directly into the funnel — something that was only measurable by indirect inferences on linear TV.
Viewability shows how visible your ads are on-screen. On most streaming services, ads take up the entire screen, making for a 100% viewable experience at all times. On some apps, like YouTube, the video screen can be positioned by the user slightly out-of-frame, which can cause that number to drop, but it’s rarer.
Ad Fraud Metrics are a catch-all term referring to the tools CTV advertisers use to make sure that their ad traffic isn’t being spoofed by unscrupulous publishers, ensuring a greater degree of confidence in our other metrics. Checking for things like invalid traffic, unauthorised placements (like double-layering a second ad invisibly behind the viewable one) prevents ad fraud and maintains campaign integrity.
Attribution and Performance Analytics are where CTV advertising really demonstrates its advantage over linear TV. With CTV advertising, you can directly link ad exposure to a variety of consumer actions, like website visits, app downloads, and purchases. With complex CTV attribution models, you can trace a customer journey from their initial impressions on one advice to a purchase on a completely different device. This sort of multi-factor attribution is functionally impossible on a traditional linear campaign, and this is the true source of CTV’s boundless growth for advertisers in recent years.
Comparing CTV to Linear
You’re not here for a glossary, though: you’re here for a direct comparison to how these two media powerhouses ultimately stack up to one another. And though these two viewing methods have very similar-sounding metrics between one another, it’s in the compare/contrast that the true advantages start to show themselves.
- Targeting Precision: Compared to linear TV, CTV advertising provides far better audience targeting compared to linear TV. When buying an ad on linear TV, that ad shows to literally everyone watching that show on that channel across a fairly-large regional market. There are demographic concerns you can factor in based on what time a program airs, who their general audience is, etc., but CTV advertising allows you to use data-driven insights to reach specific demographics, interests, and audience behaviours. Instead of targeting everyone who watches a show, you can limit your targeting to specific age groups, radiuses, times of day, and more. CTV viewers get to choose what shows they’re watching and when, and CTV advertisers get to pick who sees their ads.
- Engagement and Interactivity: The most-interactive a linear TV ad gets is when there’s an 800 number to call at the end of a spot. CTV, on the other hand, offers clickable overlays, interactive ad experiences, QR codes, second-screen interactivity, and more. All of these direct-response actions allow advertisers to depend less on a viewer remembering their ad later, and gives you the ability to send viewers directly into your ad funnel without them ever leaving the couch.
- Cost Efficiency: On paper, linear TV seems cheaper — but that’s because you’re paying to cast a wide net in every direction. With CTV’s interactivity, precision, and measurement capabilities, however, you can skip showing ads to unlikely customers and focus solely on your targeted audience. This enhances your ability to net conversions right out of the gate, and the longer you operate on CTV the more data-driven insights you’ll be able to leverage for increased optimization. Ultimately, the high-performance ROI that results from this means that the per-conversion cost to the advertiser is often lower, even as CTV publishers are able to command higher CPMs with their actionable audience data.
Overlap
As linear and CTV are co-existing, there’s been some interesting cross-pollination between the two platforms.
In recent years, Nielsen has expanded their TV Ratings system to incorporate viewing data from streaming services and YouTube. This is valuable for a few reasons: some streaming services (like Netflix) have been known to be somewhat opaque with their viewership numbers, and having an outside firm conduct their own numbers tests means there’s pressure to ensure honesty from the big streaming houses. And comparing Nielsen’s sample-group-based methods to the tracking metrics of CTV will allow Nielsen to refine their own formulas as well, promoting greater accuracy from a firm that’s been perfecting their methods for over half a century.
As CTV advertisers try to look for methods to directly measure audience attention, Nielsen’s sample-group method may allow for a less-intrusive way to determine this, by employing the volunteer Nielsen families to gather new insights.
Though it’s too early to see how this will all shake out, there’s exciting possibilities that the lessons of linear and CTV advertising each will improve the advertising experience for the other.
Final Thoughts
Though there’s possibilities for innovation across TV platforms to improve both, the current state of affairs is giving CTV a decisive advantage, one that’s likely to persist for years to come. Much like the Neanderthals, linear TV will almost certainly be replaced by its more-evolved counterpart in the future, even if some aspects of linear live on.
If you’re an agency or advertiser looking to more-accurately track your campaigns on CTV, or are looking to get into CTV advertising for the first time, COOL Media has the solution for you. You can get started today by reaching out to our team. With our proprietary attribution and brand-lift measurement solutions, we’re the name to watch in Connected TV.