Connected TV

Wondering if advertising on television is the right fit for your brand? Explore the advantages and disadvantages and learn how to make effective TV ads.

Find out where and how to build a successful TV ad campaign

Advertising on television is one of the most popular ways to spread a brand’s message, but don’t let its ubiquity fool you. More home screen ways to reach households exist than ever. Finding the right fit, whether through big-budget campaigns on linear TV or targeted ads for CTV conversions, can greatly impact your TV commercial success.

Here’s everything you need to know about advertising on television to get started, and where to learn even more.

Big Advantages of Advertising on Television

Adding TV to your media mix is a critical step for any brand that wants access to a broad, deep, and engaged audience pool. Building persuasive TV commercials has evolved into an art form since the first one aired during a baseball game in 1941. The medium has grown significantly in potency and variety, particularly with connected TV advertising spend projected to reach $40.9 billion.

Here are three major advantages TV commercials have over other types of advertising:

• Wider reach: The national television audience is massive, remaining the primary mode of entertainment for a large majority of adults. Around half of U.S. households have linear TV subscriptions, with connected TV ads reaching over 90%.
• Dialed-in demographics: Traditional demographic details for linear TV networks give advertisers a good idea of who their message may reach. OTT advertising takes it further with performance tools and viewer insights for precise targeting, down to ZIP codes.
• Better brand awareness: According to our research, 46% of viewers consider TV ads the most memorable type of advertising they come across. These ads also have a “halo effect”  that boosts other advertising forms, making them essential for your media mix.

These benefits and more make advertising on television one of the best approaches for any brand looking to expand its audience. To delve into the power of connected TV advertising, contact Alpha Media for a consultation.

The Basics of Cable TV Advertising

Cable TV ads have been a potent brand-sharing tool, but CTV challengers offer newer, cost-effective options. Still, crafting and placing the right cable TV commercials could be a worthwhile investment for your brand.

Cable TV ads are generally broken down into two categories:

• Spot advertisements, which are typically cheaper and region-specific, and air on any channel the cable provider offers.
• Network advertisements, which are more expensive but can target customers around the country, and are negotiated with individual channels.

Cable TV ads are budget-friendly compared to broadcast ones. Think of a Sunday Night Football ad, which could surpass $800,000 versus cable spots ranging from $5 to $500. But we’ll get into more specifics on the cost of advertising on television, however you choose to do it, in a moment.

The Cost of TV Advertising

Given the increasing prominence of OTT and connected TV advertising, marketers looking into advertising on television should be well-acquainted with their costs compared to traditional linear TV. Here’s what you need to know to make the price of placing TV commercials a well-justified expense for your brand.

Linear TV’s greatest strength is its massive reach, with an unparalleled capacity to deliver ads to audiences around the US across a range of demographics. OTT and CTV’s greatest strength is their power to target ads in a much more precise and cost-effective manner. OTT and CTV ads can also be used to extend the reach of linear TV campaigns, as well as search and social advertising.

Advertisers laid out nearly $67 billion on TV advertising in 2022, with the median price for AdAge-tracked shows coming in just north of $80,000. In 2019, cable TV upfront advertising came to an average cost per mille (CPM) of $19.45, while network TV upfront advertising that year had a CPM of $36. Meanwhile, OTT and CTV advertising spending reached just under $27 billion in 2022, with the average CPM for CTV ranging from $35 to $65.

Benefits and Drawbacks of Local TV Advertising

While the term “TV commercials” often brings to mind the sort of splashy, expensive advertisements you might see during major sporting events, focusing your efforts on local TV may yield more cost-effective results for your brand. Here are some of the pros and cons of advertising on television locally:

Pros of Local TV Advertising

• Wide local reach: Depending on your chosen area, local linear TV ads may still provide a huge number of potential exposures. For instance, advertising in San Francisco will be more expensive than other regions, but it will still put your ad in front of millions while costing less than a national ad.

• More precise targeting: Demographic data tied to local station viewership will make it easier to find more relevant audiences for your brand, rather than the broad metrics available at the national linear level.

• Affordability: Running a 30-second ad on a national network could easily cost hundreds of thousands of dollars, whereas a medium-sized local market may have a CPM of $15 to $25.

Cons of Local TV Advertising

• Lack of flexibility: The terms of a TV advertising campaign are typically set as soon as it begins, with little room for optimization or course correction. If any major changes are required mid-campaign, your brand may be in for a major headache.
• Unclear attribution: It can be difficult to track a customer from a local TV ad to purchase, which makes measuring campaign success more of a challenge than in some other mediums.
• Suboptimal metrics: While it’s easier to find definitive performance metrics for local TV than on national TV, they are still not as detailed or instantaneous as in CTV and OTT video.

How to Compare TV and Radio Advertising

The first radio advertisement aired more than a century ago for real estate development in New York City. Since then, radio has stood as a stalwart of advertising in the US, persisting even after the emergence of television as Americans continued to tune in during commutes, road trips, and more. Now evolving consumer behaviors mean the boundaries behind those formerly well-defined domains are blurrier than ever before.

While TV ads can capture audiences with attention-grabbing effects and instantly recognizable celebrities, radio ads only have listeners’ senses of hearing to target. That said, the digital age means consumers are likely to experience either type of ad while multitasking on their phones or other personal devices. Keeping ads simple yet creative is one way to help cut through the noise, whether audio or visual.

Building radio into your media mix is an important avenue for diversification, especially since the common run-of-schedule method of ad placements means you can save costs at the expense of controlling exactly when your ad will play. Production costs are an even greater point of differentiation, with radio advertisements generally being much cheaper and faster to create than TV ads of similar quality.

The Growing Role of Addressable TV

Addressable TV isn’t a standalone viewing method like linear TV or CTV; it’s a potent advertising approach used alongside OTT viewing. It’s based on the principle that not everyone watching the same show will have the same interests, and it uses targeting capabilities and viewer data that is inaccessible on linear TV to serve better-tailored advertisements.

But how do you know if addressable TV campaigns are successful? Here are three key performance indicators to keep in mind:

• Reach and frequency: Reaching a higher number of unique viewers is one of the most fundamental goals for ad campaigns — however, the next point is what makes it truly valuable.
• Conversion rate: The percentage of viewers who, having seen the ad, take the desired action (making a purchase, signing up for a free trial, and so on) within a particular period.
• Return on ad spend (ROAS): By dividing the revenue generated from the ad campaign by the total ad spend, you can determine how much of an impact your TV commercials made on your bottom line.

How TV Measurement Works

Typically, advertisers align the most valuable television slots with the most popular programs. This placement increases the likelihood of delivering a brand’s message to the widest audience. But how do we know which TV programs are the most popular? That’s where TV measurement comes in.

Nielsen, a trailblazer in TV measurement, began by distributing viewer diaries and specialized screen-capturing devices called Audimeters. They sent these to a representative sample of U.S. households. While Nielsen’s methods have adapted, recent events have dented its reputation as the definitive linear TV measurement source.

One of the most promising modern methods of TV measurement is automatic content recognition (ACR), which tracks what viewers are watching, then transmits that data to TV and set-top box manufacturers. When implemented with consumer privacy in mind, ACR can be an unparalleled measurement source of data for advertisers and broadcasters alike.

Power Up Your TV Advertising Plans

It’s clear that connected TV advertising is an unmatched destination for brands that want to reach wider audiences and the most engaged viewers possible. But not all means of CTV advertising are equally effective.

By partnering with Alpha Media, you’ll unlock access to the only CTV platform that was purpose-built for performance marketers. Our performance based CTV advertising solution will help you increase reach, lift, and ROAS by targeting the right audience at the right time, then hone the value of your campaigns with best-in-class analytics that measure the true performance of your ads. Request a demo today to see what we can do for your brand.

Follow us on social media for the latest content and stay up-to-date on the latest marketing news.

In this third edition, we delve deeper into crucial measuring metrics required to achieve your marketing goals. Despite the complexity of performance marketing, it can yield remarkable results. Success requires understanding user engagement and using analytical thinking to drive growth and reduce costs. Mastery of these user acquisition metrics enhances fund allocation, boosts campaign performance, and optimizes ad expenditure returns.

Acquire an understanding of measuring metrics such as retention rate, incrementality, among others.

Retention Rate

Retention is essentially the opposite of churn rate. Instead of calculating how many customers are leaving, you’re figuring out what percentage of customers are sticking around during a set time. Measuring business growth involves three crucial data points: the influx of new customers, the retention of current ones, and the attrition of previous customers. Satisfying existing customers, preventing departures, and consistently attracting new business lead to your business’s growth. This metric will help you determine how successful your retention efforts are and whether you can keep more customers than you lose.

How to calculate retention: Prior to calculating retention, establish your Day 0 value, which signifies the initial app users on the measurement’s first day.

Then, you need to choose which retention calculation you want to make. There are a few ways to measure retention, and each one comes with its own strengths and weaknesses.

First, there’s classic retention. It’s easy to calculate but is susceptible to day-to-day noise (such as holidays or unusual spikes in usage). Calculate classic retention with the following formula:

Classic Retention Rate = Number of Users Who Return to the App on a Day after Day 0 / Number of Users Who First Opened Your App on Day 0

For example, if 20 people open your app on Day 0, and eight of those users come back on Day 5, your Day 5 retention rate is 8/20, or 40%

Then there’s range retention, which is helpful for discovering how many users return within a specific time period. This aids trend detection and reduces calculation noise, but it’s less detailed than other measurements. You can calculate range retention with the following formula:

Range Retention Rate =  Number of Users Who Return to the App During a Following Interval of the Same Range / Number of Users Who Open the App During an Initial Range of Time

To measure a 7-Day Range Retention Rate, first count app opens in the initial seven days — let’s assume 50. Then, you measure how many of those users return in the following seven days. With 35 users returning the next week, divide 35/50 for a 7-Day Range Retention Rate of 70%.

Last, you can measure rolling retention, which can tell you how many users are coming back after a set amount of time. Quick to measure and offering insight into app “stickiness,” its numbers can vary with timing. Calculate rolling retention using this formula:

Rolling Retention Rate = Number of Returning Users Who Open Your App On or After a Specific Day / Number of Users on Day 0

Incrementality

Incrementality is the measurement of how effective an ad campaign is at influencing conversion compared to organic traffic. In mobile user acquisition, it’s vital to grasp if paid ads drive conversions. Otherwise, you’re spending money on users who would have converted regardless of your efforts. This is where incrementality helps. Compare ad-exposed audiences to an ad-free control group to assess your campaign’s real impact on user acquisition.

How to calculate incrementality: To calculate incrementality, you need two groups: a test group that sees your ad and a control group that doesn’t. Once you’ve run your campaign, you can perform the following calculation:

Incrementality = (Test Group Results – Control Group Results) / Test Group Results

For instance, if the test group gets 125 installs and the control group has 100, the difference is 25. Divide that number by 125, and you’ll get 0.2, or a 20% incrementality rate.

Stickiness

Like rolling retention, stickiness can help you determine how many of the users that you’ve acquired continue to return to your app. Unlike rolling retention, stickiness ties to daily and monthly active users, providing a focused macro view of loyalty. Stickiness is becoming one of the most important metrics for maximizing the results of your user acquisition efforts. Knowing your app’s stickiness can tell you when to throttle your ad spend or by how much. And if you’re holding onto users longer, you can spend less on acquisition. 

How to calculate stickiness: All you need to calculate stickiness is your daily active users (DAU) and monthly active users (MAU):

Stickiness = Daily Active Users / Monthly Active Users

Alpha Media Can Help Your Business Grow

Television has been a crucial marketing channel for building brand awareness, but it hasn’t been a primary resource for user acquisition — until now. CTV offers the ability to reach your target audience when they’re most attentive and provides you with the tools to optimize your ad spend through incremental testing, retargeting capabilities, and multi-touch attribution, all with high-quality, brand-safe inventory. Want to discover how adding CTV to your media mix can boost your user acquisition efforts? Alpha Media can help. Contact us for a conversation with a Digital Consultant.

Follow us on social media for the latest content and stay up-to-date on the latest marketing news.

This week we continue to explore the essential user acquisition metrics for tracking to attain your marketing objectives. While performance marketing might appear intricate, it has the potential to deliver impressive outcomes. Achieving success necessitates comprehending user involvement and employing analytical reasoning to stimulate expansion and curtail expenses. Mastery of vital user acquisition metrics enhances fund allocation, boosts campaign results, and optimizes ad expenditure returns.

Gain an understanding of quantifying metrics like return on ad spend, and others.

Return on Ad Spend

ROAS gauges ad spending versus revenue generated by a specific campaign. This is different from return on investment, which measures the overall profit generated by an entire project. Typically abbreviated to ROAS, this metric helps marketers determine whether their ad dollars directly lead to revenue generation. Where acquisition KPIs like cost per acquisition measure how effective advertising brings in users, ROAS determines how effective it is at bringing in money. 

How to calculate ROAS: Return on ad spend is calculated by dividing the total revenue generated as the result of a finite ad spend by the total cost of that ad spend.

Return on Ad Spend = Revenue Generated by Ads / Cost of Ads

With mobile app user acquisition, however, correctly attributing revenue to ad spend can be difficult due to factors such as recent privacy policy updates that make it more difficult to track user data. This is where mobile measurement partners (MMPs) like Singular, Appsflyer, and Tenjin come in. They act as an unbiased intermediary between you and your data, helping to accurately attribute which media source led to your desired activation.

Click-Through Rate

Click-through rate measures how many times people are clicking on (or otherwise engaging with) the ads you’re paying for. It’s measured as a percentage of the total ad impressions (when your ad is displayed to a potential customer) that result in the customer clicking on the ad.

Also known as: CTR

Why you need to know it: CTR is a helpful metric for determining how engaging your ads are. If users aren’t clicking on the ads you’re paying for, it may be time to reevaluate your approach and continue testing and optimization. CTR can vary wildly, depending on where you’re advertising or the keywords you’re targeting. A low CTR isn’t bad if it leads to valuable conversions, while a high CTR without conversions wastes money.

How to calculate it: You can calculate your click-through rate with the following formula:

Click-Through Rate = Total Number of Clicks / Total Ad Impressions

Conversion Rate

Conversion rate is similar to click-through rate, though it takes measurement one step further. Rather than merely determining the percentage of users who clicked on an ad, conversion rate measures the percentage of users who actually take action once the ad is clicked. Your conversion rate tells you the effectiveness of the sum of your campaign decisions — targeting, creative quality, and even your app’s onboarding experience — in mathematical terms. If you’re spending money on ads that aren’t leading to conversions, you need to examine where the disconnect is happening. 

How to calculate conversion rate: You can calculate your conversion rate by dividing your total number of conversions by the total number of clicks.

Conversion Rate = Total Number of Conversions / Total Number of Clicks

Alpha Media Can Help Your Business Grow

Television has been a crucial marketing channel for building brand awareness, but it hasn’t been a primary resource for user acquisition — until now. CTV offers the ability to reach your target audience when they’re most attentive and provides you with the tools to optimize your ad spend through incremental testing, retargeting capabilities, and multi-touch attribution, all with high-quality, brand-safe inventory. Want to discover how adding CTV to your media mix can boost your user acquisition efforts? Alpha Media can help. Contact us for a conversation with a Digital Consultant.

Follow us on social media for the latest content and stay up-to-date on the latest marketing news.