It’ll come as no shock that linear TV viewing is in steady decline and has been for some time. What’s more surprising is advertisers’ continued overreliance on this media channel. For marketers, it’s never been more important to embrace a digital-first approach. Recent data on viewing trends and how marketers can respond tells us why.
People want to watch the clips and segments they’re most interested in, at a time that works best for them.
The point of no return for linear TV
Traditional TV viewing has dropped from 100 million households in 2014 to 74 million today. And it’s forecast to fall to just 44 million by 2025.
The disruption caused by the pandemic has clearly accelerated linear TV’s downward slide. In just the past year, even the last bastions of linear-TV viewing — live events, news, sports, and cultural moments, such as the Oscars and Grammys — have seen big declines in viewership. The 2021 Oscars broadcast had half the audience it did in 2020.
It’s not that consumers are losing interest. While the Grammys only attracted around 9 million viewers during the live broadcast per Nielsen, Dua Lipa’s performance of “Levitating” during the ceremony has been viewed online more than 56 million times and counting. People want to watch the clips and segments they’re most interested in, at a time that works best for them.
Faced with this shift, CMOs have understandably accelerated their embrace of connected and digital-first TV advertising. Those who don’t risk irrelevance.
Common myths about linear TV
Even as the linear audience withers, advertisers are poised to commit some $20 billion during this upfront season — an increase of 7.6% from the previous year.1 That figure reflects budgets committed to a mix of digital, streaming, and linear TV.
While most brands understand the need for a digital-first approach, many are taking their time getting there. And while their reasons for staying loyal to linear TV may seem plausible, a closer look reveals a different story. Much of our conventional wisdom needs a rethink.
Here are a few commonly held misperceptions about the linear TV channel.
- MMMs say linear TV works
In some cases, measurement solutions, such as marketing mix modeling (MMM), continue to suggest linear TV is more effective than alternatives. But, because they are necessarily backward-looking, they don’t account properly for real-time changes in consumer behaviours around media or dynamic changes to the media itself, such as format and pricing. Now is the time to modernise your MMM and include more granular and immediate insights.
- Only TV drives mass reach
The once widely accepted conventional wisdom that extensive reach is a benefit unique to linear TV has been repeatedly debunked. It’s now possible to drive mass reach without having traditional TV placements on your media plan. Most watch time for the customers that matter to your brand happens in a digital environment: In the U.S. today some 213 million people stream programming through connected TV (CTV) apps.2
- Studio content is better than creator-produced content
The abundance of viewing on digital platforms has put to rest the notion that “premium” content is the only way to attract eyeballs. Now, 73% of people describe good content as something personal and relevant that relates to their passions.3 The new premium is about control and choice, not production values, and only 15% of people say TV must be professionally produced at all.4
- Linear TV is the only way to get a big-screen experience
The growing popularity of connected devices means that old distinctions between network TV, digital, and streaming are disappearing. Between 2019 and 2020, we saw YouTube watch time on TV screens nearly double, with over 120 million people watching every month. This in turn lets people recreate the shared big-screen TV experience and watch together.
- Low CPMs prove TV’s value
Historically, marketers have cited linear TV’s low cost per impression as evidence of its value relative to more expensive connected and streaming TV inventory. Though impressions may be cheaper, it doesn’t follow that they’re providing more bang for the buck. For instance, linear TV has a demonstrated problem with frequency: A Nielsen study reported that the average heavy TV viewer sees the same ad 26 times.
Small steps toward a digital-first mindset
Many marketers are already on a path to digital-first planning, since it provides the best of both worlds: the engaging presence of advertising shown on a large TV screen on one hand and digital’s huge audiences and optimisation capabilities on the other. Here are some suggestions for how to accelerate your strategy.
- Embrace creative freedom on one campaign
Introducing more specific digital-targeting and campaign-flighting options to the TV environment brings the opportunity to tailor your message for different audiences. While consistency is important, you should also push beyond the idea of a single piece of creative.
Nissan employed this approach when it launched the Rogue in Canada. The brand created 30 different creative cuts aimed at seven different audiences, leveraging video ad sequencing and optimising results in real time. The campaign delivered 12% more sales than previous linear TV-based launch campaigns.
- Plan TV and digital together to maximize reach
If you use total reach as your primary metric, grow it further by combining linear TV and YouTube. Try Nielsen’s Total Ads Ratings (TAR) data, which measures reach across multiple platforms. This will help you find the right mix of YouTube and linear TV that optimises their combined reach.
You can use this strategy to extend your campaign reach or to achieve your current reach targets more efficiently. Kimberly-Clark achieved 36% more reach by adding YouTube CTV campaigns. Meanwhile Coty, the maker of Gucci’s Guilty Pour Homme, included more digital in its 2020 holiday campaigns, including CTV, achieving the same total reach for 15% less budget.
- Go big somewhere small
If you or your CFO are reluctant to jump straight into the deep end, consider testing an aggressive digital strategy at a small scale. This could be a non-core product line or a small geographic region. Doing something big, such as a large digital-only campaign or a big shift to digital in your media mix, in a less consequential facet of your business will help you better isolate and identify the impact of a digital-first strategy.
Seismic shifts in the landscape require that we all move beyond incremental change. Marketers shouldn’t start out with last year’s plan. Instead, media mixes must be anchored in current consumer viewing habits. The makeup of TV viewing has been steadily changing for years, but recent upheavals and the traction of new services have created an entirely new landscape — and marketers should respond with urgency.
