Adam Lowy
3 min read

Why Linear TV Budgets Should Move Over to CTV

Only a few years ago, when people bought a home, they’d factor three things into their monthly expenses: the phone, electricity, and cable bill. Now, this kind of thinking would be considered old fashioned. 

Landlines have been largely replaced by mobile phones, and cable subscriptions are being swapped out for streaming services. This shift in consumer behavior has driven mass adoption of connected TV (CTV), with publisher investment in streaming content following suit. But the bulk of ad budgets stubbornly remain mostly linear.

Let’s take a closer look at why linear ad budgets should be shifting over to CTV.

Fewer People are Watching Traditional TV

The most apparent reason is that consumers can be found on CTV. CTV’s reach now rivals broadcast TV and an increasing number of households are no longer reachable via cable. The number of households forecasted to cut the cord will increase 26% from 2020-2022, and by 2024 it is estimated that there will be more non-pay TV households than pay-TV households. 

Weigh that against the fact that in the US alone, 80% of households have at least one connected device, and the writing’s on the wall: CTV is the future of television. The COVID-19 pandemic has further accelerated this shift, with time spent watching CTV increasing 34%. As shelter-in-place orders have lifted, it looks like this pandemic behavior may be here to stay. Advertisers will need to adjust their ad-buying habits to take full advantage of the new audience opportunities.

With Audience Buying, it’s Primetime All the Time

With CTV, brands are not only buying based on content—they’re buying based on addressable audiences.

Powered by programmatic technology, buyers can reach audiences with precision, and one-to-one targeting across demographics. CTV technology goes beyond linear TV’s index-powered buying, leveraging audience, geographic, contextual, and behavioral data to drive campaign performance.

In this way, CTV brings all the advantages of programmatic to TV advertising, with the addition of data-driven targeting and greater access to younger, coveted audiences. Brands looking to reach young, tech-savvy, socially active, word-of-mouth-heavy professionals are particularly excited by CTV inventory.

Bigger Companies have Joined the Streaming Landscape 

Advertisers who buy linear TV spots do so mainly because of the broadcast-quality, premium content experience TV provides in addition to reach. Entertainment mainstays are investing heavily in streaming platforms and bringing exclusive, high-quality premium content to CTV and streaming platforms with lighter ad loads. This means that the viewer experience on CTV is the same, if not better, than linear TV. 

Early CTV players such as SlingTV, Hulu, and Fubo have paved the way for other companies to join the streaming landscape. CBS All Access morphed into the Paramount Network, Fox acquired Tubi, NBC launched Peacock, just to name a few. Networks such as A+E and the CW are bringing their audiences with them to CTV as well. Disney+ membership hit a mind-blowing 86.8 million subscribers just over a year after it launched. If it meets its forecast of 230–260 million members by 2024, it will surpass Netflix. Disney also gives consumers the option of bundling Disney+ with their other streaming services, Hulu and ESPN+, making streaming a more affordable and alluring choice. 

As these services expand their CTV footprint, they are investing in premium original content and marketing dollars to attract audiences, providing advertisers with unrivaled quality and scale. 

With its reach, premium content, and addressability, CTV is on its way to reach, and eventually surpass, linear TV in viewership and investment. As audiences flock to streamers, buyers should be adding and ramping up CTV within their media mix. With media companies and advertisers seeing the benefit on bottom lines, they’re seeing CTV for what it truly is: high-performance television with holding power.