Marketplace Update: Amid Cord Cutting and Canceled Sports, What's the Optimal Video Strategy?

Matt Collins

SVP, Marketing

Live sports are on hold. Cord shaving and cord cutting are on the rise. The pandemic has resulted in massive increases in TV viewing. The Upfront market is likely going to be smaller than at any point in recent memory.

With all these changes unfolding rapidly, we want to share some insights that shed light on the best video strategy for maximizing the performance of your campaigns. The conclusion: a surge in TV viewing during the pandemic, declines in linear TV inventory pricing, and linear TV’s much higher household reach and impressions compared to that of ad-supported video on demand (AVOD streaming) makes linear TV the clear choice for anchoring your video ad strategy.

Perhaps more than ever before, advertisers need flexibility, the ability to apply a data layer for precision targeting, and scalable performance. Two types of video advertising emerge as contenders for campaigns that deliver all three: ad-supported video on demand (AVOD), also known as ad-supported streaming, and data-driven linear TV.

To evaluate them in an apples-to-apples way, we analyzed both the available reach and impressions available to AVOD and data-driven linear TV. That’s because household (HH) reach is just one factor that determines the attractiveness of an advertising medium. Brands also need opportunities to engage audiences. An impression count can tell us just how large that engagement opportunity is for each medium.

In this dashboard we built to examine their potential reach and impressions, we see that data-driven linear significantly out-paces AVOD. That’s why data-driven linear should be the anchor of any video strategy. Here are some important numbers that prove the point:

  • 112M HHs: Simulmedia's data-driven linear TV platform reach.
  • 57M HHs: Linear TV’s unique reach, i.e. HHs not reachable via AVOD.
  • 8x: Assuming aggressive assumptions for growth in AVOD viewership and a conservative $10 average CPM, linear TV’s impressions are still 8 times higher than AVOD’s. A more realistic estimate puts linear TV’s lead at 14x.
  • 55M out of 58M HHs: The number of AVOD HHs that also are reachable via Simulmedia’s data-driven linear TV.

In addition, TV viewing has increased year over year (for adults 18 and up). In this dashboard, we show that viewing during the peak of the pandemic increased by 5.4% vs. the same period in 2019. Comparisons by daypart reveal a nearly 30% increase in viewing during the weekends, probably as a result of people having fewer entertainment options.

Our week over week viewership analysis shows that TV viewing, while still up when compared to early March, has nearly returned to its pre-pandemic norm. We’ll be studying this carefully to try to understand the factors that are contributing to these changes.

We think this makes a slam dunk case for the superiority of taking a data-driven approach to linear TV. AVOD is worthy of investment, but in proportion to its opportunity, relative to data-driven linear TV. If you have questions or additional data you’d like to see, we’d love to hear from you. Get in touch with us via marketing@simulmedia.com.

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