Performance TV: What Is It & How Does It Work?

by The MNTN Team

8 Min Read

As the TV landscape has continued to shift over the past few years, viewers have migrated from linear TV to streaming, and brands have followed suit, adjusting their strategies to find their target audience where they watch.

But the rise of streaming TV gave advertisers an additional benefit: with streaming TV’s digital DNA, they can now use the largest screen in the house as a performance marketing tool known as Performance TV.

What Is Performance TV?

Performance TV is a term originally coined by us here at MNTN, but (in our humble opinion) it’s what advertising on streaming TV should be like everywhere. Performance TV is a form of television advertising designed for one primary purpose: delivering measurable results.

Unlike traditional TV advertising, which primarily focuses on brand awareness and mass reach, Performance TV is all about achieving specific and measurable outcomes related to marketing goals and key performance indicators (KPIs).

Performance TV vs. CTV Advertising

Connected TV advertising (or CTV advertising) is TV advertising delivered to a CTV device, like a smart TV or streaming device such as a Roku stick. These ads are delivered during the ad breaks of streaming content. CTV advertising includes any type of advertising done on CTV, both performance and brand-awareness-focused. Performance TV is a type of CTV advertising that focuses, first and foremost, on performance.

Performance TV vs. OTT Advertising

Over-the-top advertising (or “OTT” advertising) is often used interchangeably with CTV advertising. Technically, OTT refers to how content and advertising are delivered — via an internet connection rather than a cable or satellite — refers to the method of ad delivery through internet-connected devices. Performance TV is a type of OTT advertising that focuses on driving measurable results for brands.

Performance TV vs. Addressable TV Advertising

Addressable TV is a term used to describe the technology that delivers specific ads to individual households or viewers within households based on data-driven targeting. Performance TV takes addressable TV to the next level by allowing brands to reach their target audience to accomplish their specific performance goals.

Performance TV vs. Linear TV Advertising

Linear TV may be thought of as “traditional TV” — the kind you would watch via cable or satellite. Linear TV advertising was a broad-reach play that allowed advertisers to buy based on the content they thought their target audience was watching. Performance TV, on the other hand, uses an audience-first approach that reaches viewers no matter where they spend their digital time.

Benefits of Performance TV Advertising

During the heyday of linear TV advertising, there was only so much marketers could do to track how much their efforts actually contributed to a brand’s growth. But, with Performance TV’s unique advantages, marketers now know more about how to maximize an ad campaign’s effectiveness.

1. Precision Audience-Based Targeting

Performance TV allows advertisers to target specific demographics, interests, and behaviors precisely. This level of targeting — known as “precision audience-based targeting” — helps ads reach the most relevant audience and maximizes the chances of engagement.

2. Hyper-Localized IP-Based Targeting

Using IP-based targeting, advertisers can go beyond demographics and target viewers based on their geographic location. This hyper-local approach is especially valuable for businesses with localized offerings.

3. High Video Completion Rates

Performance TV benefits from the high video completion rates of CTV, meaning that advertisers can be sure that their entire message reaches their target audience.

4. Accurate, Real-Time Measurement and Attribution

One of the standout features of Performance TV is its ability to provide real-time data on ad performance. Advertisers can track impressions, view-through rates, clicks, conversions, and more, allowing for immediate campaign optimization. At MNTN, we created our own Verified Visits™ method, which uses an additional layer of verification to ensure that only the conversions driven by Performance TV are counted as such.

5. Automated Campaign Optimization

Performance TV offers automated optimization, which outpaces and outperforms manual campaign optimizations by several orders of magnitude. Simply enter a budget and goal, and the system optimizes over 651,000 times per day to find and achieve the best possible outcomes.

Where Are Performance TV Ads Shown?

Performance TV advertisements are shown within ad breaks on participating streaming channels. MNTN Performance TV advertisements, in particular, only run on premium streaming TV networks, including CNN, ESPN, Peacock, and more, thanks to our 150+ direct deals with those publishers.

How Are Performance TV Audiences Targeted?

So, how exactly does a Performance TV ad reach its target audience?

First Party Data

First-party data is information a business or organization collects directly from its own customers, website visitors, and users. It provides insights into customer behaviors, preferences, and interactions with the brand and can include demographics, purchase history, website activity, email interactions, and more. Advertisers who use Performance TV can use their first-party data and CRM lists to create a campaign and reach this key audience.

Third-Party Data

Third-party data is information from external sources, which may include data providers, data brokers, and other third-party entities that compile data from various public and private sources. Access to third-party data allows for even more audience refinement and often includes demographic information, consumer behaviors, interests, and more.

IP Targeting

Internet protocol (IP) targeting is a strategy that allows advertisers to deliver ads to specific audiences based on their unique IP address. By pinpointing the IP addresses associated with particular geographic areas, advertisers — particularly local ones — reach the right audience at the right location.

Frequency Caps

A frequency cap is a limit an advertiser sets on the number of times they’ll show a specific ad to an individual viewer within a defined time period. These caps create a more balanced experience for the viewer: they prevent overexposure and viewer fatigue and improve the likelihood of retention.

Performance TV Metrics and Measurement

Given the vast quantities of data that drive Performance TV, measurement and reporting are essential elements of success on the platform. Armed with these comprehensive statistics, marketers are much better equipped to decide if their campaign is working and how to continue to optimize in the future.

CTV Metrics and Measurement

There are a variety of CTV metrics that an advertiser may use to assess the effectiveness of their campaign, including:

Impressions

One impression equals one ad served to one user. As a metric, impressions are the number of times an ad has been served within the campaign, allowing advertisers to know how much they have spent and how many times their ad has been seen.

Return on Ad Spend (ROAS)

This metric quantifies the revenue generated for every dollar spent on advertising, helping advertisers to assess a campaign’s profitability.

Cost per Completed View

This represents the price paid per full view of a specific ad. Advertisers who buy on a cost-per-completed view (CPCV) model only pay for ads that are watched in their entirety.

Cost per Acquisition (CPA)

CPA measures the advertising cost of acquiring a new customer or lead, helping advertisers evaluate the efficiency of their ad campaign.

Reach

Reach is the number of unique viewers exposed to an ad campaign, enumerating the size of the audience that has seen it.

Frequency

Advertisers use this metric to manage ad exposure (see: frequency caps, above) by tracking how often viewers see the same ad, preventing viewer fatigue and extending the life of effective ads.

GRP (Gross Rating Point)

GRP is a metric carried over from linear TV that evaluates the effectiveness of an ad campaign by multiplying the reach by the frequency of a campaign. This was a method used before the more precise measurement of CTV was available.

CPP (Cost Per Point)

Also a part of linear TV buying, CPP calculates the cost of achieving one rating point, offering insights into the cost-efficiency of reaching a specific audience.

Cross-Screen Measurement

To gain an accurate look at the big picture, cross-screen measurement gathers viewing data from multiple devices to gain a comprehensive perspective of an audience’s viewing behavior.

Target Rating Point

This represents a GRP specifically targeted toward a particular demographic or audience segment, effectively providing a clearer, more detailed look at the particulars.

Analyzing such metrics gives advertisers a much clearer perspective on how to design their campaigns. Performance TV advertising methods provide them with the tools and opportunity to meet a wide range of specific business needs.

Performance TV Advertising Best Practices

Effectiveness in Performance TV advertising relies on strategic implementation. Here are a few things to keep in mind when to get the most out of it:

Clear Objectives: Start by defining clear and specific campaign objectives. Whether it’s driving website visits, generating leads, boosting sales, or increasing brand awareness, knowing what you want will determine how your ad campaign evolves as data rolls in.
Audience Segmentation: Segment your target audience based on demographics, behaviors, interests, and other relevant factors. This allows you to create tailored ad campaigns for various audience segments and increases the relevance of your messaging.
Creative Optimization: Create compelling and relevant ad creative that resonates with your target audience. Tailor your ad content to address each audience segment’s specific needs and pain points. Regularly refresh your creative to avoid ad fatigue.
A/B Testing: Conduct A/B testing to experiment with different ad formats, messaging, and targeting strategies.

MNTN Invented Performance TV

More and more, advertisers are discovering CTV’s ability to help them achieve their performance-focused goals. MNTN is the pioneer of performance-based TV advertising, and the inventor of the term “Performance TV.” With our data-driven approach, MNTN offers the insights and creative ideas needed to produce outstanding and successful ads with a high return on investment.

See what our performance TV approach can do for your business.

Performance TV: Final Thoughts

Today, Performance TV advertising is a transformative force, aligning the power of television’s reach with the precision and measurability of digital marketing. Its ability to target specific audiences, measure results in real-time, and optimize campaigns for maximum impact makes it an invaluable tool if you’re seeking tangible, accountable outcomes.

As technology continues to advance, Performance TV evolves alongside it, offering brands new opportunities to engage with viewers. By adhering to best practices, embracing data-driven insights, and staying agile in response to changing viewer behaviors, Performance TV opens doors to effective, results-oriented advertising in the ever-evolving media landscape.