When is Linear TV a Smart Investment?
By Paul Flugel, SVP, Marketing Performance & Brand Analytics at Catalina
CPG advertisers looking for a strong Return on Ad Spend (ROAS) should not assume that over-the-top (OTT) and connected TV solutions alone deliver the biggest bang for their buck.
It’s easy to see the benefits of CTV / OTT, given the ability to use first and third-party data-driven targeting that can be measured across devices. It also likely improves brand awareness because ads on them cannot be skipped, in most cases, increasing the chance the shopper you want to reach will see your message.
However, Linear TV still has its place. These days, consumers use linear TV primarily to watch a real-time broadcast on its original channel. Think the Super Bowl, Prince Philip’s funeral, or the Oscars. For everything else, we are often watching OTT video content streamed directly from the internet onto our TVs, PCs, and mobile devices. Think binge-worthy series like Bridgerton (Netflix), The Mandalorian (Disney+), Ted Lasso (Apple TV), and shows on Peacock, which offer nearly every NBC program past or present, from This is Us to 30 Rock. Then there’s Connected TV, a conduit of OTT that includes Smart TVs, Apple TV, Roku, Fire TV, and gaming consoles played through the internet, like Xbox or PlayStation.
Before recommending a shift of more marketing dollars from linear to OTT and connected TV, consider a strategy to leverage both.
An example of where linear TV is still thriving was this year’s Super Bowl LV, which once again featured a wide group of consumer-packaged goods (CPG) advertisers, including endemic categories like beer, soft drinks and snack foods, and new categories like mayonnaise and diapers.
Despite the massive changes the media world has experienced since the start of COVID, the NFL’s premier event still achieved a massive national rating: Nielsen reported a 38.7 household rating for the game, translating to over 46 million homes watching during the average minute.
We’ve generally been trained that the higher the rating, the less targeted the delivery. With the gridiron dust settled, we set out to test that premise for the eight CPG brands that ran ads in the Super Bowl. For this test, we created an index with help from our TV measurement partner to reveal each brand’s potential for driving incremental sales and, ultimately, Return on Ad Spend (ROAS).
First, we found that the Super Bowl does deliver a selective audience for CPG advertisers. The average household exposed to at least one of these brand spots during the Super Bowl spent 10% more than the average U.S. household, over the last 12 months, in the eight categories within which these brands live.
Drilling down to examine individual categories, we found an enlightening difference:
All brands pay relatively the same for a given Super Bowl ad slot, but certain brands do get more bang for their buck, given the intrinsic category purchasing behavior of Super Bowl viewers. For example, the average household exposed to one or more of the Anheuser-Busch ads during the game spent 17% more on beer during the prior year than did the average of all households (i.e., exposed & unexposed).
Catalina indexed the CPG advertisers against the Super Bowl audience to see which brands got the most bang for their buck during the broadcast. In the Anheuser-Busch example, the index of its Super Bowl advertising to the audience was 117, which means that the share of category dollar sales reached was 17% greater than the share of households reached. Since the share of households is what determines the advertising cost, the 17% “extra” category dollars reached is “free money.”
The CPG brands we studied generally performed well with respect to the indexing metric for their Super Bowl advertising. After Anheuser-Busch, M&M’s Chocolate Candy had the next highest Super Bowl advertising index, at 111. Of the eight brands, Hellmann’s Mayonnaise had the lowest index, at 97.
Understanding where your media is working, by connecting what your audience is buying with what they’re watching, whether analog or digital, will help you optimize across all your TV vehicles. Using data to target ad delivery intelligently enables advertisers to increase their ROAS by double-digit percentages. Through Catalina’s Advanced TV Audience and Measurement Solutions, advertisers can uncover all the opportunities that both Connected TV and linear TV provide.