Why 40% of TV Budgets Should be Spent on Connected TV

CTV ad spending lags viewer behavior

Today’s consumers have created complex viewing habits, switching seamlessly between ad-supported and subscription streaming services and linear TV. Despite the wealth of data pointing to this complex new viewership reality, we haven’t seen material changes in the way advertisers allocate budgets. According to data from eMarketer, US Connected TV (CTV) ad spending in 2023 will represent only 6.3% of total ad spending. That’s a highly 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 Ads’ analysis of Nielsen viewing data suggests that the best-case scenario using linear-only media plans, is a national reach of 50% of adults 18-49. 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. We 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 18-49 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.

Reach out today to learn how to get your own Rule of 40 with Samsung Ads Audience Advisor