Performance Marketing, also known as direct response advertising, is a type of marketing that uses the same principles as traditional advertising but focuses on getting people to take action.
Performance marketing has revolutionized the way digital advertising works, allowing marketers to focus on results that matter, like clicks, leads, and sales, instead of mere impressions. However, although traditional TV advertising remains a powerful tool for reaching a broad and diverse audience, it was not possible to talk about the real performance of TV ads.
Thanks to advancements in data science, identity solutions, connected TVs, and measurement platforms, marketers can now apply performance marketing practices to TV advertising as well.
In this blog post, we will explore
Half the money I spend on advertising is wasted; the trouble is I don’t know which half. — John Wanamaker
Performance marketing has its roots in the early days of digital advertising when online ads were typically priced on a cost per thousand (CPM) basis. However, advertisers soon realized that paying for ad impressions alone didn’t necessarily translate into actual results like clicks, leads, or sales.
In the late 1990s and early 2000s, pay-per-click (PPC) advertising emerged as a more effective pricing model for online advertising. This allowed advertisers to pay only when someone clicked on their ads, rather than for ad impressions that may or may not have led to actual engagement or conversions.
Over time, performance marketing evolved to encompass a wider range of digital marketing tactics, including search engine optimization (SEO), email marketing, social media advertising, and more. The focus on measurable results and real-time optimization continues to be a defining characteristic of performance marketing to this day.
Traditional TV advertising is like trying to hit a moving target with a blindfold on. — Michael Bayley, CEO of S’well.
TV advertising measurement has been around since the early days of television broadcasting in the United States. The Nielsen Company started using a rating system in the 1940s to measure the popularity of radio programs and expanded this system to include TV shows as TV programming became more popular. Initially, surveys of TV households were conducted using paper diaries, but this was later replaced by the electronic “people meter” in the 1950s. In the 1980s and 1990s, Nielsen expanded its measurement capabilities to include cable and satellite TV, as well as local TV markets, and introduced digital technologies to improve the accuracy and timeliness of its TV ratings.
The currency of TV advertising is Gross Rating Points (GRP) —the sum of all the rating points achieved by a particular campaign over a given period of time. The rating point is the percentage of a target audience that has the opportunity to see a specific program or ad, compared to the total number of people in that target audience. For example, if a TV show has a rating of 10 and the target audience is 18–34 year-olds, it means that 10% of the people in that age group watched the program.
Currently, the primary way TV advertising is measured is still through people meters and priced based on GRPs, similar to how it was done in the early days of digital advertising.
The traditional way of targeting in TV advertising focuses on the audiences based on demographic data, such as age, gender, and socio-economic status. Advertisers select specific programs or time slots that align with the demographics they are trying to reach. For example, an advertiser targeting young adults may choose to run their ads during a popular music program that tends to attract that demographic.
Traditional TV advertising also uses rating data to determine the size and characteristics of the audience watching a particular program. Advertisers use this data to estimate the number of viewers who will see their ad, and to ensure that their ads are being seen by their intended target audience.
However, traditional TV advertising lacks the level of precision, although it can reach large audiences, it may not be as effective in reaching specific niche audiences or tracking the performance of specific ads.
As a marketer, you are always looking for ways to increase your ROI and drive more conversions. While digital channels like social media and search engines have been the go-to for performance marketing in recent years, it’s important not to overlook the power of television advertising.
TV advertising has long been seen as a branding and awareness tool, but with the rise of performance marketing, it’s now possible to track and measure the success of your TV campaigns. By using data-driven insights and technology, you can target your ads to specific audiences and optimize your campaigns in real-time to drive the best results.
Here are some reasons why you should consider performance marketing on both linear and connected TV:
Linear Television has a broad reach, allowing you to touch a large and diverse audience which makes it still relevant for most businesses. However, while demographic targeting has been the norm in the industry for decades, it may not always be effective in reaching the intended audience, as viewership habits and interests are becoming increasingly diverse and complex — just think about the times of pandemics.
To optimize TV advertising campaigns and achieve better ROI, you need to adopt a more sophisticated approach that goes beyond demographic targeting.
Connected TV Audiences might just be what you need.
With the help of Connected TV audiences, you can now go beyond traditional demography-based targeting and leverage digital-like targeting options. TV watching habits, content interests on both linear and streaming services, geography, or even your own custom segmentation allows you to narrow down your target audience with precision. For example, you can target audiences such as:
Performance marketing practices on TV advertising allow you to track and measure the success of your TV campaigns regarding your campaign objectives. You can make data-driven decisions and optimize your campaigns for better results on your KPIs (reach, effective reach, impressions, conversion, sales, web visits, mobile app installs…).
Reach & Impressions: You can optimize your campaigns for maximum engagement and impact, as you can avoid overexposure to the same viewers with optimal frequency and ensure that your message is being delivered effectively to your target audience. Connected TV audiences make it possible for you to measure reach and impressions for TV networks including themed networks, local networks, and other niche TV networks that may not be covered by traditional rating systems. A complete view of media performance helps you stand out among your competitors, diversify your advertisement strategy and boost your KPIs.
Geography: You can make data-driven decisions to boost your campaign performance in particular locations by adjusting your targeting strategy. To target those under-reached locations, you can update your media inventory with local networks or you can add a pinch of spice using complementary marketing channels, such as social media, search ads, or digital out-of-home.
Attribution: TV Attribution tools provide granular insights into which TV ads are driving the most significant impact on business outcomes. With data-driven insights and technology, you can drill into networks/publishers, TV shows, dayparts, and genre levels that deliver the highest webpage visits, sales, and mobile application installs — even the footfall of your brick-and-mortar shops.
Creative Optimization: Ad creatives are the keys to a successful TV campaign. Your ad creative is what captures the attention of viewers and motivates them to take action. A poorly designed or executed ad creative can undermine even the most well-planned and targeted campaign. Your ad creative should be visually compelling, relevant to your target audience, and communicate your message clearly and effectively. It’s important to test different versions of your ad creative to see what resonates best with your audience and adjust accordingly. Comprehensive TV viewership data with proper attribution tools can provide insights into which creative elements resonate with your target audience and drives the most significant impact on business outcomes. You can identify which creative elements such as messaging, music, visuals, or length are generating the most significant outcome and optimize your ad creatives accordingly.
Justify your spending: Marketing is often one of the first areas to be impacted by budget cuts during a recession or an unexpected downsize of a company. As a marketing professional, it’s important for you to stay up-to-date on economic trends and shifts in consumer behavior to anticipate potential changes in your marketing budget. It’s important to regularly communicate with stakeholders and decision-makers to keep them informed about the progress and results of the TV campaign you are running. By providing regular updates and demonstrating the impact of the campaign with numbers on the bottom line, you can justify your spending and secure your future budget allocations.
To apply performance marketing practices to your TV campaigns, you can follow these steps:
By following these steps, you can apply performance marketing practices to your TV campaigns and drive better results.
At MediaQX, we’re here to support you every step of the way on your journey toward successful TV campaigns.
You can reach out for more TV measurement technologies to boost your KPIs.
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