TV Streaming Insights & Resources | Roku Advertising

How to Balance TV Streaming and Traditional TV

Written by Roku Advertising | Oct 1, 2021 4:00:00 AM

It’s time to buy TV the way you watch TV. That means buying more TV streaming ad inventory, but what’s the best way to do that for your brand?

In this whitepaper, we’ll show how shifting budgets from traditional linear TV to Roku could impact total audience reach for advertisers in three different industries. We’ll also demonstrate how that potential total audience reach has changed over time and at different investment levels. By the time you’ve finished, we think you’ll reach the same conclusion many advertisers have reached: shifting to TV streaming allows you to reach more of your audience than traditional linear TV can by itself, and that this incremental reach opportunity is growing every quarter.

The 20:80 problem

2020 created formidable challenges for video investment teams and brands. Traditional linear TV viewing decreased. TV streaming viewing increased. Upfronts commitments diminished as more money migrated to the scatter market. Direct response inventory became scarcer and often more expensive.

In addition, according to an analysis of Q1 2020 Nielsen data, on traditional linear TV, 20% of the typical Adult 18-49 audience received 80% of targeted campaign impressions. This created a one-two punch: one in five were likely to be over-exposed, while four out of five were likely to be under-exposed.1

Most traditional linear TV ad impressions delivered to just 20% of the target demo.

Advertising with Roku Solves These Problems

Roku helps advertisers extend their audience reach as people migrate from traditional linear TV to TV streaming.

As the chart below demonstrates, according to an analysis of Roku benchmark data from Q1 2020, 83% of Roku’s average campaign reach among Adults 18-49 could not be reached on broadcast or cable networks. By comparison, according to a Roku analysis of Nielsen data, on average just 4% and 1% of broadcast and cable network campaign reach, respectively, was unique.2

Roku Reaches Audiences That Traditional Linear TV Cannot

Source: Broadcast and cable data from Roku analysis of Nielsen data, Q1 2020 Roku Reach Insights benchmarks

This explains why using TV streaming and traditional linear TV together is so common; in Q4 2020 alone, 326 advertisers bought TV streaming inventory with Roku and traditional linear TV. That represents a 20% increase over Q3 2020.3

How Roku Delivers Unique Audience Reach

Roku’s ability to deliver a unique and incremental audience is a product of three things:

1) Viewer preference for TV streaming: The size and scale of TV streaming audiences has hit a tipping point.

  • During March 2021 in the US, 39% of TV minutes watched by adults 18-49 were streamed, according to Nielsen data.
  • More than half of all Roku users responding to our 2020 Cord Cutting survey don’t subscribe to a legacy pay TV provider.4


2) Roku is America’s #1 TV streaming platform by hours streamed.5

  • In 2020, Roku was the top smart TV operating system in the U.S., with 38% unit share of smart TVs sold.6
  • The Roku platform reached homes with an estimated 148 million people as of Q4 2020.
  • The Roku Channel is the #2 free, ad-supported channel on Roku, with half the ad typical load of traditional linear TV and high-impact, premium ad placements.7
  • OneView by Roku, the ad buying platform built for TV streaming, helps advertisers plan and execute cross-device campaigns to engage these users on their TVs, phones, tablets, and laptops.

3) Industry-leading streamer data: As third-party cookies vanish, first-party data has become essential for precision targeting and campaign measurement. Roku can solve for this problem.

  • Roku has first party streamer data on every opted-in device with insights on what they watch.
  • This makes it possible to combine advertiser data with Roku’s viewing data to create powerful viewing segments and lookalike audiences that can help brands increase their reach and acquire more customers.
  • Roku’s automatic content recognition, or ACR, makes it easier for brands and agencies to manage frequency across both their traditional linear TV and TV streaming campaigns and intelligently deploy campaign dollars to maximize incremental reach.

How Shifting Traditional Linear TV Dollars to TV Streaming with Roku Increases Total Reach

We analyzed the traditional linear TV campaigns of three brands – one in retail, automotive, and financial services – to project the potential incremental audience reach the brands could have achieved across their campaigns had they shifted budget to TV streaming with Roku while keeping total campaign budgets flat in 2020. As you will see, Roku’s potential to deliver incremental reach increased throughout the year as Roku’s audience grew.8 We expect the amount of incremental audience reach available to advertisers through Roku to increase in 2021 as viewers watch more TV streaming content and less traditional linear TV.

The data below comes from Roku Activation Insights. This tool provides a what-if simulation that estimates potential reach in cross-media campaigns. It does this by estimating the reach impact of shifting a portion of advertiser budget from traditional linear TV to the Roku Audience Network and then evaluating the total incremental reach such a campaign shift could achieve.

To help orient you, here’s how we calculate the metrics you’ll see in these charts:

  • Traditional Linear TV Reach Change: This shows the actual reach that would have been lost on traditional linear TV if budget had been shifted away. We calculate it this way: 100 x (traditional linear TV reach after budget shift – traditional linear TV reach before any budget shift)/(traditional linear reach before any budget shift)
  • Roku Reach Change: This tells us the potential reach that could have been gained on Roku if budget had been shifted to the Roku platform. We calculate this way: 100 x (Potential Roku only reach)/(total TV + Roku potential reach after a budget shift)
  • Total Incremental Reach: This tells us the potential total net new reach gained after a budget shift. We calculate it this way: 100 x (total reach after the budget shift – actual traditional linear TV reach before any budget shift)/(actual traditional linear TV reach before any budget shift)

Example 1: Retailer

In Q1 2020, a 10% shift in budget to Roku could have led to 3.8% incremental reach for this retailer. By Q4 2020, that same 10% shift in budget to Roku could have led to a 14.4% increase in total reach.

 

Source: Roku Activation Insights 2020

Example 2: Automotive Brand

In Q1 2020, a 10% shift in budget to Roku could have led to 0.9% incremental reach for this automotive brand. By Q4 2020, that same 10% shift in budget to Roku could have led to an 8.6% increase in total reach.

 

Source: Roku Activation Insights 2020

Example 3: Financial Services Brand

In Q1 2020, a 10% shift in budget to Roku could have led to 0.8% incremental reach for this financial services brand. By Q4 2020, that same 10% shift in budget to Roku could have led to a 12.1% increase in total reach.
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