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Not a day seems to go by without someone in the media trade press bandying about stale canards about linear TV. We thought we’d take a look at a few of them and explain why they just don’t hold up:
Without Sports, Linear TV Is Doomed
Actually, sports of all types account for only 10% of linear TV set usage, with more in the fall— thanks to the appeal of football—and less at other times. Since TV sports are heavily slanted towards male viewers, the corresponding percentage for men might be around 13-15% of their viewing time while for women it's probably only 5-7%. Also, most of the pro-leagues have signed long term contracts with the broadcast TV networks and cable channels, so they aren't going anywhere. It might be true that a fairly small number of avid sports buffs(perhaps 5% of all linear TV homes) would cut the cord and go streaming-only if most TV sports were to be found exclusively on streaming platforms, but why would the leagues do that and lose millions of viewers? More likely they would offer their games to both platforms, as some are doing now.
Advertisers Can't Reach More Than Half Of All TV Homes Without CTV
This just isn’t true. In addition to so-called "pay TV" homes—some 60 million of them—there are 15% who get broadcast TV via over-the-air reception and many more who get linear TV content (including commercials) using apps. Combined, only about 20% of all consumers are exclusive to streaming and many of these only view premium SVOD content, which does not carry ads. Also, ©MDI Alert 2023, Media Dynamics, Inc. 2023. Reproduction of any part of this publication, including illegal photocopying, electronic and/or fax distribution, will be held as an intentional violation of the copyright laws unless specific authorization is given by the publisher. about 20% of all TV homes are linear TV-exclusives, meaning that an advertiser who seeks mass reach needs to use both platforms to attain that goal.
Linear TV Viewing Is Very Heavily Concentrated Among a Few Heavy Viewers
A recent study based on a panel of automatic content recognition (ACR) enabled smart TV homes reported that 40% of the linear TV audience accounted for 92% of all viewing. This is a function of a tally of ACR set usage, which in many homes is the main family room or bedroom TV set. But there are many other sets throughout a home that may not be used as often and there are homes without an ACR-enabled smart TV to be accounted for. Set usage can also involve any number of viewers and the average viewer is involved with only half of the households' set usage. Viewer studies tell us that 20% of adults account for about half of TV usage and another 20% do roughly 25%. Therefore, it is correct to say that 40% of the audience accounts for about 75% of all viewing—but not 92%. But this kind of concentration applies to all forms of human activity as well as all types of media. Indeed, it appears that streaming also has a heavy viewing "problem." It’s not just linear TV.
TV's CPM Hikes Are Unsustainable
This is often heard among sellers of competing media and it's true that TV's CPMs have risen much faster than the cost of living or most other indicators of inflation. In TV's early years it was charging advertisers only a tiny fraction of a penny per viewer "reached," but now the corresponding cost, using TV's inflated commercial minute audience stats, is more like 2-3 cents per viewer as an all-daypart norm across all network types. Were ad attention factored in, this figure would rise to about 5-8 cents per viewer. Certain kinds of TV come in much higher, including primetime generally, news, specials, and sports. So, should branding advertisers desert TV because it is too costly and switch to cheaper radio or digital display ads? Not likely. The reason is simple: TV is the preferred mode of communication for most branding campaigns. It's sold in to the whole organization and it's the most researched medium in terms of creative impact, so advertisers feel comfortable using TV as their primary medium. That's not going to change. While there is the possibility that if the pro-league's TV rights demands escalate beyond reasonable limits, some TV sports sponsors will start dropping out, but that remains to be seen.
It's worth noting that digital platforms also function under a set of assumptions that also don’t quite hold up…but that’s a conversation for next time. Stay tuned.
WHAT’S THE STORY ON THE AMERICAN CONSUMER?
Speaking of reality checks, we have done a deep dive on the American consumer. Who are they? What do they think? How do they really respond to advertising? The result: Consumer Dimensions 2024, an exciting new annual report on how advertising reaches American consumers and their changing demographic makeup.
Consumer Dimensions is divided into two chapters. Chapter One: How Advertising Works explores how ads work, how much time consumers devote to them, the realities of attentiveness, the effects of frequency, mindset targeting and ad-relevant cross-platform metrics. Chapter Two: Profiling the U.S. Population provides an extensive portrait of the changing demographics of the American consumer: the aging of America, how the work force has changed over the years, the racial/ethnic makeup of the population, and many other variables that have a bearing on how marketers define their targets. Many tables include long-term trending and projections to provide a complete picture. Find out more about this new report, including a detailed TOC, here. Media Matters readers can also save 10% off their purchase of this report by entering the code SAVE55 at checkout.