Cost-Per-Click (CPC): What Is It & How to Calculate
by Frankie Karrer
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We take on our classic cousin, Linear TV, and see how it stacks up against Performance TV.
10 Min Read
In the ever-evolving landscape of media consumption, Linear TV Advertising stands as a testament to the enduring power of traditional television marketing. Despite the rise of digital platforms, linear TV ads continue to be a vital strategy for brands aiming to reach a wide audience through scheduled programming on satellite or cable networks.
But what is linear TV and how does it work? In this article, we’ll explore linear TV’s unique positioning in the marketing mix, its mechanisms for targeting audiences during peak viewing times, and its relevance in an age where streaming services are taking over.
Linear TV is the traditional form of television, which is programmed and watched as scheduled through satellite or cable and is not streamed to a specific user on demand. It generally caters to prime-time viewing, which is when most people are in front of their screens.
While Linear TV viewing still holds some form of nostalgia, especially with a mature audience, changes in consumption habits have affected the way marketers view Linear TV as an advertising tool – in fact, according to media consultancy Ebiquity, Linear TV will see an estimated 21% fall in commercial impact by 2025.
So, will it go away? Not any time soon, but its impact is diminishing over time.
Linear TV advertising refers to the commercials that are broadcast across scheduled television programming via satellite or cable networks. These ads are placed within specific time slots, targeting audiences tuned into shows, news, or events at predetermined times.
Unlike digital advertising, linear TV ads reach a broad audience simultaneously, capitalizing on high viewership periods to maximize exposure and impact.
Connected TV (CTV) refers to televisions that can connect to the internet and stream digital content, enabling advertisers to target specific audiences with precision.
The primary difference between CTV advertising and linear TV is that CTV offers targeted, data-driven ad placements, while linear TV broadcasts ads to a broad audience with minimal personalization.
Over-the-top (OTT) refers to the delivery of TV content via the Internet without requiring traditional cable or satellite TV services.
The main difference between OTT advertising and linear TV is that OTT allows advertisers to reach viewers on any device connected to the internet (not just smart TVs), offering more flexibility and targeting options than traditional linear broadcasts.
Streaming TV provides viewers with on-demand access to a vast library of content over the Internet, allowing for greater convenience and choice.
Like CTV and OTT, streaming advertising can be precisely targeted and measured, while linear TV reaches a broader, less defined audience through scheduled programming.
Prerecorded programming, hosted on a server, streams through linear TV on a set schedule. Software is used to determine both the timeslots for the shows, as well as the accompanying advertisements that go along with it.
The obvious exception here would be for live events, where raw footage is received, edited in near real-time, and sent to viewers, often on a very slight time delay.
However, for an advertiser, here’s how the process works:
For advertisers, getting your ads on linear TV can feel a bit intimidating. The easiest way is by working directly with an advertising agency that specializes in negotiating deals with cable companies. The entire process is beyond the scope of this particular post, so if you want the ins and outs, check out this piece on cable TV advertising.
On-demand streaming on CTV platforms is quickly pulling ad revenue away from linear TV advertisers, but there is still a future for linear. Here are a few notable benefits of linear TV advertising.
For now, linear television is still a viable option for reaching audiences during live TV programming. Whether it’s a sporting event like the Super Bowl, news broadcasts, morning shows, or shows that involve live audience voting, there is still demand for linear TV programming.
In addition to its live TV appeal, linear TV ads are still the most effective way to reach the largest number of baby boomers. Around 38% of individuals aged 55 and older spend more time watching linear TV content on cable than on any other platform. Compare this to Gen Xers at 21%, millennials at 16%, and Gen Z adults at 9%, and it’s clear that linear TV still has a place for advertisers trying to reach older audiences.
Although advanced audience targeting options are limited on linear TV, compared to CTV/OTT platforms (more on this in a moment), linear TV still allows you to target viewers by channel, or air time. This is particularly useful if you know that your best customers are most likely to watch a certain show at a certain time.
Here are some of the main challenges and limitations of Linear TV advertising:
Linear TV advertising lacks the advanced tracking and measurement capabilities found on digital platforms, making it difficult for advertisers to obtain real-time data and insights into audience engagement. This limitation hinders accurate assessment of return on investment (ROI), leaving advertisers without a clear understanding of how their campaigns are performing.
The effectiveness of linear TV ads is diminished as viewers increasingly use DVRs and fast-forward through commercials, resulting in reduced exposure and impact. Additionally, the steady decline in linear TV viewership, as audiences migrate to streaming platforms, means advertisers have a shrinking audience base to reach through traditional TV advertising methods.
Advertising on linear TV often involves high costs, particularly for prime time slots, with no guarantee of reaching the intended audience. Furthermore, linear TV tends to attract an older demographic, presenting challenges for advertisers aiming to engage younger, more digitally savvy viewers who prefer online and on-demand content.
The cost of TV advertising can vary widely, influenced by a range of factors that affect pricing and impact. Unlike digital advertising, where costs are more transparent and often based on metrics such as clicks or impressions, linear TV advertising involves a more complex pricing structure.
Here are five of the largest cost drivers for linear TV advertising:
Despite its shortcomings, linear TV can still be a good medium for some businesses. To maximize the impact of linear TV advertising, marketers should focus on the following best practices:
When you look at the combination of rising Linear TV production and increased advertising rates, a distracted audience, and an inability to measure results – it’s no wonder viewers and advertisers alike are cutting the cord in favor of Connected TV (CTV).
Fast becoming the future of TV as we know it, Connected TV can be accessed across multiple platforms including smart TV, mobile, or OTT devices (think Chromecast, Xbox, and Amazon Fire Stick).
Here’s why Connected TV, or Performance TV as we like to call it, is the one to watch:
While Linear TV advertising remains a powerful medium for reaching broad audiences through scheduled programming, the evolution of television consumption habits points to a clear trend towards digital, internet-based platforms.
Connected TV (CTV) advertising emerges as the definitive winner in this shifting landscape, offering advertisers the granularity of digital targeting with the immersive experience of traditional TV.
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