How CTV can help marketers achieve their incrementality goals.
Avid What The Tech? readers will remember that in an earlier lesson, we covered the concept of incrementality — that is, how marketers achieve incremental reach in their media campaigns. (I know that sounds like a circular definition, but we’ll clarify in just a moment.)
This time around we’re going to focus on incrementality specifically as it pertains to connected television, another topic we’ve covered in depth before.
Incrementality and CTV, as you’ll learn, have a particularly important relationship. CTV is, for many brands, the most effective medium for achieving their incrementality goals. Likewise, incrementality is one of CTV’s biggest selling points.
A quick refresher: What is incrementality?
Incrementality is how marketers measure the effectiveness of each individual component of a marketing campaign.
Modern media campaigns are holistic, spanning a variety of platforms across several devices — everything from Instagram ads on mobile, to display ads on desktop, to mid-roll ads when you’re bingeing Hulu on your smart TV.
Incrementalism measures how much each isolated element of the campaign contributed to its overall success. For instance: How did the YouTube pre-rolls perform relative to the interstitial video ads on TikTok?
That is, it measures the incremental effect of each component of a marketing campaign. Hence, incrementalism.
CTV is short for connected television, the term for watching programming through an internet-enabled television set, versus so-called linear or traditional TV, in which people watch TV programming delivered through a cable box or broadcast signal.
People can access CTV in one of two ways: (1) through an internet-enabled “smart TV” or (2) through a set-top box, such Apple TV or Roku, that brings internet connectivity to a television set. Basically, if you watch it on your TV but it’s delivered through the internet instead of through a cable box or bunny ears, it’s CTV.
CTV includes a variety of viewing habits, however, many of which resemble linear TV. Watching Netflix obviously falls under the CTV umbrella, but so does watching live sports via a Hulu Live TV subscription, an experience nearly identical to watching it via cable or broadcast. The important differentiator, though, is the delivery mechanism. (As you can probably tell, CTV has lots of subtle complexities, which is why we dedicated an entire post to the subject.)
What, then, is incrementality in CTV?
Incrementality in CTV measures how effectively brands use CTV advertising reach consumers who no longer watch TV, or never did, via traditional, linear methods. Those viewers are incremental to the traditional TV advertising audience.
Why is incrementality especially important to CTV?
Because of the mass consumer shift to CTV over the past few years. Accelerated by the pandemic, the cord-cutting trend shows no signs of slowing down. Indeed, more US households are now addressable via CTV advertising than via linear TV advertising.
As a result, CTV is uniquely effective at helping marketers achieve incremental reach goals. CTV helps marketers target consumers they haven’t reached via other channels. Thus, providing an incremental boost in reach (or the overall number of consumers who have seen the campaign).
How does it work?
CTV helps with incremental reach because CTV ads allow for more precise targeting.
Unlike traditional linear TV, where measurement is very broad-based, CTV is very data driven. An advertiser can understand, with precision, the audience for specific content.
If someone already saw an ad while flipping through YouTube on their phone, the campaign can decide to not send them the same ad during commercial breaks on Hulu. In other words, the campaign can adjust so people aren’t seeing overlapping ads, no matter what platform they are viewing on.
Targeting on linear TV has come a long way in the past several years, but that’s a level of precision that exists only on CTV. That ability to increase the incremental reach of campaigns is what makes CTV so valuable to marketers.