Why 40% of TV Budgets Should Be Spent on FAST Connected TV

Connected TV Advertising

In less than a decade, TV has gone from a sure thing—the de facto mass reach platform—to nuanced, complicated and in flux.

You’ve probably heard many hot takes around the notion that “TV is dead!” But the reality is consumers have not stopped embracing TV. Quite the contrary, but they have created complex viewing habits, switching seamlessly between ad-supported and subscription streaming services and linear TV. Have you adjusted your media planning to account for the new viewership reality?

In July, Nielsen measured streaming consumption at 34.8% of total viewing time, marking the first time streaming has surpassed either broadcast or cable (at 21.6% and 34.4%, respectively). In Samsung households, 73% of viewers watch both linear and streaming but viewing time skews to streaming by a 2:1 ratio. And for the first time, in Q1 of this year, streamers spent more time with ad-supported video on demand (AVOD) than subscription video on demand (SVOD).

This is all to say that viewership today is incredibly complex. Consumers continue to flock to CTV, but they’re not entirely abandoning linear TV, either. So, what does this mean for marketers as you head into 2023 planning?

CTV ad spending lags viewer behavior

Despite the wealth of data pointing to this complex new viewership reality, there hasn’t been  material changes in the way advertisers allocate budgets. According to data from eMarketer, U.S. CTV ad spending in 2023 will represent only 6.3% of total ad spending. That’s a staggeringly disproportionate piece of the pie when compared to the fact that 75% of homes in the Samsung Smart TV footprint are mostly streaming.

Change is hard. But sticking with heavy linear buying has consequences. Samsung Ad’s analysis of Nielsen viewing data suggests that linear-only media plans have a limited outcome of only reaching 50% of adults ages 18 to 49. And because there is no mechanism to control frequency in linear TV, the networks that advertisers are spending on will hit the same audience over and over again.

Rebalancing with the Rule of 40

For two years in a row, Samsung Ads analyzed national advertising campaigns to understand the effect of new TV viewing patterns on audience reach. The company found that the practical reach of traditional linear TV campaigns—keeping to a reasonable frequency level—is approximately 50% of their intended audience.

But, how does one take this information and make actual, practical changes to a media plan? Brands can improve their reach across the entirety of the national adult 18 to 49 audience without spending another dollar on media.

Shifting 40% of linear ad budgets to CTV not only reaches those who don’t watch any linear, it also reaches the large swathe who are now watching linear so infrequently that they are unlikely to be reached by a linear ad schedule.

As streaming becomes viewers’ default viewing preference, the success of a national TV advertising campaign depends on appropriate CTV ad spend. Change is hard, but now is the time to make sure your 2023 media strategy is caught up with viewer behavior.