Quantifying Audience Reach of Data-Driven Linear TV & AVOD

Maximizing unique audience reach is a time-honored advertising strategy that is proven to power both performance in the near term and growth over the long term. With all of the changes in TV viewing habits, including cord shaving, cord cutting, and the emergence of more over-the-air networks, we wanted to investigate and share how much reach brands and agencies should expect from two approaches to what we call "smart scatter" TV advertising: data-driven linear TV and ad-supported video on demand, or AVOD, otherwise known as over-the-top (OTT).

The results:

We estimate there are approximately 115M households (HHs) that receive the internet, which is required to watch AVOD1.
Based on data from JP Morgan Chase and other sources, we estimate that there are 58M AVOD HHs.
Most AVOD HHs are reachable via data-driven linear because AVOD is typically watched via a connected TV, or CTV.
CTVs also receive linear broadcast TV signals.
Simulmedia can reach 112M HHs.
We therefore estimate that the maximum number of AVOD-only HHs is 3M.
The overlap of HHs that receive both AVOD and linear is therefore approximately 55M.
This means there are approximately 57M HHs that only receive linear TV.

What is "smart scatter?" The "smart" part refers to relying on a data layer to guide audience targeting, automation to drive execution, and rapid reporting that clearly shows the link between ad exposure and business outcomes. The "scatter" part indicates inventory that's planned and bought only when it's needed, not Upfront (i.e. months in advance). Using smart scatter is going to be essential this year because of the diminished size of the 2020 Upfronts.

First, here's the theoretical maximum of all linear TV HHs, as reported by Nielsen, for the following 10 audiences: Adults 18-34, Adults 18-49, Adults 25-54, Adults 25-54 Black, Adults 25-54 Hispanic, Men 18-34, Persons 2+, Kids 2-11, HHs with Kids 2-11, and total HHs.

Chart of theoretical maximum of all linear TV households.

Linear TV reaches 121 million HHs, in spite of the gradual decline in HHs that pay for a cable bundle, because of the number of HHs that access over-the-air networks, or OTAs, for free. Most of these OTAs reach more than 50 million HHs.

Next, let's show Simulmedia's ability to reach these audiences via its data-driven platform, which includes targeting, planning, execution/activation, measurement and optimization.

Below, we show the actual size of each audience that Simulmedia has been able to reach since January 27, 2020, over a one day, one week, one month and three month basis.

As you can see, Simulmedia's direct relationships with 120 national networks has made it possible for our advertisers to reach 112 million HHs, which is nearly 93% of the theoretical maximum number of HHs, and at least more than 75% of every other audience we show here.

The other approach to “smart scatter,” AVOD, also known as OTT, has a HH reach that is growing fast. Based on recent data from JP Morgan Chase and other sources, we estimate AVOD can reach about 58 million HHs today. Some expect it to surpass 80 million by the end of the year.

As this Venn diagram shows, though, nearly all AVOD viewers are reachable via Simulmedia, while Simulmedia also enables a reach of 57M HHs that are not reachable via AVOD.

Venn diagram showing linear TV reach and AVOD reach.

While both approaches to smart scatter belong in today’s premium video advertising, this reach data suggests that for the foreseeable future, data-driven linear should anchor a brand’s video strategy.

In addition to making linear TV data-driven, Simulmedia is also buttressing direct relationships with national networks with workflow automation between the brand, Simulmedia, and the TV networks. Along with our data-driven approach, automation of the media supply-chain enables us to provide our clients the ability to drive performance and reach with precision, speed, and scale on linear TV.

The next chart shows the number of networks and spots for every Simulmedia campaign over the past two years. The x-axis is on a log scale to account for the very high number of ads for some campaigns, while the size of the dots indicates the length of the campaign. Visit our Observable page and hover over a dot to get more details.

Scatter plot showing the average number of TV ad spots and average number of TV networks.

More than ever before, a data-driven approach is essential. The typical American household subscribes to 200 networks - up from under 30 in 1990. This means viewers are much harder to reach than ever before. Evidence of our data-driven approach and reliance on software can be seen in the average Simulmedia media plan: over the past two years, it has included 49 networks and 1,105 ads. As TV has fragmented, media plans require this sort of breadth in order to maximize the reach of any audience. Furthermore, the activation of media at this scale can only be done using software.

1 Statista