CTV Measurement vs. Linear TV Measurement Explained
by Frankie Karrer
7 Min Read
COVID-19 Has Shifted the Focus From Branding to Performance
5 Min Read
This past week would have marked one of the major events in TV advertising—the Upfronts. Or at least it would have if COVID-19 hadn’t disrupted it completely.
Under normal conditions this would be a time for networks to showcase their top-tier episodic programming and sports content. But this year has been anything but normal, and the COVID-19 crisis has put a stop to new TV production and live sports entirely. That’s led advertisers to spend 33% less on Upfront media buys. Bad news for TV networks, right? Not necessarily, and that’s due in large part to Connected TV.
With Connected TV (or as we call it, Performance TV), advertisers now have more options when it comes to reaching their audience on television. Performance TV advertising, with its hybrid TV and digital approach, has proven that advertisers can reliably drive and measure ROI from television commercials, transforming TV into a direct-response performance channel.
The current crisis already has heads of major networks questioning the usefulness of the Upfronts system in a post-pandemic world. Bob Iger of Disney is set to abandon the concept completely. The possible death of the Upfronts, however, does not mean the death of TV networks. Rather, it’s an evolution in the way TV ad dollars are spent. With Performance TV offering advertisers a new direct-response ad channel, networks find themselves in a position to vacuum up performance-marketing budgets. And importantly, this all comes during a crisis that has seen viewers double their consumption of streaming television.
This all begs one major question: does this mean the end of the Upfronts?
There’s been a major shift in ad-spend prioritization as advertisers need to drive revenue now more than ever. With that in mind, let’s take a look at the stories which played out in the earnings reports for major ad-players Google and Facebook. While recognizing the impact of COVID-19 on their businesses at-large, they both pointed to performance marketing as a saving grace.
“Our total ad revenue for Q1 was $17.4 billion, which is a 17% year-over-year increase,” said Facebook COO Sheryl Sandberg. That number beat analysts expectations, and was due in large part to ecommerce and gaming-industry performance advertisers with always-on campaigns. “Advertisers in these sectors tend to optimize for measurable objectives and we are generating sales at lower prices due to the overall reduction in ad demand [due to COVID-19].”
Google saw similar positive news driven by performance marketing, giving credit to their search business. Notably, brand marketing fell off significantly—it was brands running profitable performance marketing campaigns that kept their ad budgets spending during the worst of the crisis.
Television has long been a branding channel, but that was due mainly to its limitations rather than its advantages. Advertisers are forced to leverage archaic measurement and targeting practices to reach their audience, relying solely on TV’s massive reach to make up for it.
The Upfronts are built for that system, and flourished when no better option was available. We’re now faced with a crisis that’s made performance marketing paramount. What does that tell you, and importantly, what does it say to TV advertisers and networks?
Advertisers need to prioritize performance, and they can find it on Performance TV (hence the name). It has significant advantages over traditional television.
Viewers are sophisticated and their interests are varied. Someone who loves watching basketball can also enjoy gardening, but a linear TV advertiser would never reach that hoops fan during gardening programming. Performance TV changes all that, and serves ads directly to the targeted audience. Whether they’re watching a game or getting tips on growing azaleas, advertisers can reach their ideal demo. That means each impression reaches someone who actually cares—and avoids wasting ad budget on those who don’t.
Performance TV’s reporting capabilities cement it as a performance marketing channel because advertisers can measure real results stemming from their campaigns. And similarly to other digital performance channels, results can be tracked in Google Analytics—a feature that’s exclusive to Connected TV.
When you combine precision targeting, a TV ad-experience, and reporting capabilities that accurately measure success, you get one hell of a performance channel that can generate significant revenue for both advertisers and networks.
The Upfronts are built for branding, and there’s nothing wrong with that—normally. But COVID-19 has changed all that. Viewers have shifted to streaming TV in a major way and branding budgets are on the chopping block. This is a time for advertisers to focus on driving measurable performance that ties directly to their bottom line, and for networks to offer streaming TV advertising inventory that can help them accomplish that goal.
The shift in focus from branding to performance marketing is good news for both networks and advertisers. So will the Upfronts come back next year? Probably. But will advertisers be willing to spend big on Upfronts once they see the benefits of CTV marketing? That’s debatable.