Is Incrementality the New TV Currency?

Streaming TV ads are now driving incremental reach and frequency for advertisers while challenging the old TV rating to better value media based on business outcomes, writes, Marc Bourget, SVP Product at Samba TV.

Advanced television such as OTT and CTV is now all the rage, as it redefines the TV ad industry. But can these new formats and delivery channels also re-thing how media is valued? Despite the media fragmentation and the limited supply in OTT, the new era offers substantial new tools to assess the true incrementality of the media on the business outcomes desired.

Marketers have watched audiences flee to streaming lamenting TV's death, oftentimes rationalizing the status quo, thinking that streaming lacked the scale to warrant changing a process that worked for five decades. People now consume content is a drastically different way. For instance, one parent may watch “The Walking Dead” on an 80-inch TV when it first airs. The other parent might stream it later in the evening on the AMC app from a TV-connected device. Their teenage son watches it on their iPhone. The daughter coming back from University downloads it on their laptop and airplay it to the big screen later in the week. There is no such thing as an appointment with television anymore - Audiences consume content when they want and how they want. As a result, advertisers are now forced to leverage OTT to find the best placements to reach their target audiences across all relevant forms of video delivery channels: traditional TV, streaming, and online video. The leaders in the space are pointing toward a holistic video future that assesses incrementality and business outcomes across TVs of all kinds. 

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In doing so, three challenges emerge.

Challenge #1: Identify your Audience 

Television advertising is finally succumbing to the irresistible forces of technology. The consumer adoption of streaming video is accelerating, fragmenting audiences further while reducing the ratings of traditional television programming - especially among the coveted age 18 to 49 demographic. Meanwhile, media companies have built "customer" databases and begun selling "advanced" audiences: These new definitions go beyond the traditional Nielsen age/gender categories with in-depth location, psychographics, attitudinal characteristics and purchase behaviors. 

Precise identification of a target audience is critical for reaching the audience with minimum waste while maximizing the success of an ad campaign. Traditional linear TV advertising is still a long way from becoming as targeted as social media. But the situation is improving in the OTT and CTV space. Moreover, solutions are emerging that allow the understanding of the incremental reach and frequency across linear, OTT, and CTV. This precise identification of the audience and its upside is critical to ensure marketers use the right medium to reach these increasingly elusive audiences. 

Challenge #2: Understand Your TV & Digital Reach & frequency

Once a marketer has identified his target audience and the best communication channel to reach them, he needs to understand how his chosen platforms enable the discovery of cost-effective ad placements. Budget considerations have the most impact on your reach and the number of ads you publish. As a result, establishing the correct cross-channel coordination is essential: if you're running multiple TV campaigns on different media and networks, it is much harder to figure out which one is bringing the best return. Fragmented media makes it challenging to figure out which one is delivering the best ROI. This is resolved with detailed granular datasets where you can compute an “unduplicated” reach and frequency across all TV and video formats. Sophisticated marketers access that information to adjust for optimal success continually. It is becoming clear that these techniques bring an unfair advantage to those who adopt it. 

Challenge #3: Measure Business Incrementality Across

The health of your TV advertising campaigns depends a lot on your ability to identify target audiences and quantify reach correctly. As the pressure mounts on marketers to deliver a decent return on investment in a world of multi-touch attribution and opaque conversion models, incrementality testing is precious. It is the only effective way to measure the effectiveness of both traditional and non-traditional TV advertising. But there's also one big caveat: there is still no universal measurement currency for helping marketers measure audience size and composition across multiple apps, TV channels, and devices. The marketing challenges to measuring ROI requires to dive into incrementality measurement as a way to solve the shortcomings of these models. As a result, it is critical to look at the methods, data sources, and measurement strategies for ensuring your TV strategy ties to the business outcomes that impact your bottom line. Once these challenges are resolved and the methods more widely adopted, incrementality to the business outcomes will supplement the old TV rating system in valuing the media. 

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When investing in advanced TV advertising, we must have ways to measure the business impact of the campaign. The incrementality measurement is the ultimate way to address the shortcomings of other models. Advertisers need to know how their reach and frequency impacts their business outcome. However, it might be some time before the TV industry evolves to the point of standardizing and enforcing these new methods due to the complicated process with data technologies still maturing and evolving. Ultimately, it is the sequence of media attribution weighted against the business conversion that is driving the future value of the media and the audience. This is a profound evolution (“revolution”) for the marketing industry.