Is Linear TV Dead? Shifting Budgets to Connected TV

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As technology reshapes our entertainment landscape, Connected TV (CTV) emerges as the beacon of choice, offering unparalleled flexibility and personalized content consumption for the modern viewer compared to Linear TV.

But what does this mean for advertisers like you? Where should you put your digital advertising dollars, and should your brand shift to CTV? Let’s dive in. 

The Rise of CTV and the Decline of Linear TV

Many consumers are opting to “cut the cord” by canceling traditional cable or satellite TV subscriptions in favor of more cost-effective and customizable streaming options. Streaming services provide personalized content recommendations based on user preferences, creating a tailored viewing experience – while Linear TV only offers a fixed schedule with limited customization.

Additionally, streaming services are accessible on various devices, including smartphones, tablets, smart TVs, and gaming consoles. This flexibility allows users to consume content on the go, contributing to the decline of traditional fixed-location TV viewing and driving up streaming video viewer time. 

Age differences in viewership between linear TV and streaming video vary significantly. Generally, younger demographics tend to favor streaming platforms, while older age groups may still prefer traditional linear TV. However, these preferences are not absolute, and there’s a growing trend of older audiences adopting streaming services.

For advertisers looking to reach a diverse age range within their target audience, a strategic approach might involve combining both TV and CTV to engage viewers across different age demographics effectively.

So… is Linear TV Dead?

Looking ahead to 2024, our projections indicate that the CTV ad market is poised to reach unprecedented levels, surpassing its early 2020 figures by nearly $13 billion. This staggering growth underscores the enduring appeal and widespread adoption of CTV platforms, solidifying its position as a dominant force in the advertising realm.

Linear TV is not dead and can still play a strategic role in brand exposure, especially for older demographics and rural locations. Despite the decrease in linear TV advertising expenditure, the overall TV ad spend (CTV + Linear TV) is projected to increase from $86.40 billion this year to $97.73 billion by 2027.

Striking a Balance with Your Ad Budgets

According to a survey conducted in March 2023 by the Interactive Advertising Bureau in collaboration with Standard Media Index and Advertiser Perceptions, advertisers are poised to shift their budgets, with 37% considering reallocating funds from linear TV and 36% from digital/mobile video to Connected TV (CTV). A separate study by Advertiser Perceptions and Premion reveals that nearly half of marketers anticipate a reduction in their linear TV budgets as they redirect more resources toward CTV.

In contrast, linear TV ad spend in the United States is anticipated to experience a decline, dropping from $61.31 billion this year to $56.83 billion in 2027, as outlined in the forecast. This downward trend reflects the shifting dynamics of viewership preferences.

Conversely, CTV is projected to maintain its upward trajectory, with ad spending forecasted to rise from $25.09 billion in 2023 to an impressive $40.90 billion by 2027. This signifies a substantial reallocation of advertising budgets towards the dynamic and rapidly expanding CTV landscape.

The shift in ad spending is taking place due to the ability to target specific audiences, drive higher engagement, and, of course, track results. 

Refining goals and campaign objectives is crucial for strategically allocating budgets to specific programmatic channels like Display, OLV, CTV, OTT, DOOH, and Streaming Audio. When deciding on the allocation of an ad budget to programmatic, various factors come into consideration. The initial question is, what is the overarching goal? Is it focused on enhancing brand awareness for foot traffic, or is the primary objective to boost brand awareness for website conversions? Additionally, determining the appropriate budget allocation and flight duration is fundamental to planning a successful campaign.

At Adlucent, we’ve found that crafting a harmonious blend of programmatic channels and thoughtfully allocating budgets empowers us to shape markets and guide user behavior, resulting in a notable boost in brand awareness and overall sales. Our programmatic approach often revolves around seamlessly integrating two to three channels. 

Particularly for enterprise budgets, our success lies in merging display campaigns with targeted CTV and streaming audio campaigns. The ability to connect with end-users seamlessly across various devices and channels during their online activities proves instrumental in achieving impactful results.

Conclusion

In conclusion, the evolving landscape of entertainment, shaped by advancing technology, positions Connected TV (CTV) as the preferred choice, offering unmatched flexibility and personalized content consumption for the contemporary viewer compared to Linear TV.

Looking ahead to 2024, CTV’s ad market is projected to reach unprecedented levels, showcasing its enduring appeal and widespread adoption. Are you interested in amping up your programmatic campaigns? Let’s prove outperformance has no limit.

Raheim Bundle

Raheim is a goal-oriented marketing leader with expertise in all facets of marketing management, full-funnel digital strategies, and reporting analytics. Providing insight and expertise to Mid-market and Enterprise accounts across the programmatic spectrum. Outside of work Raheim enjoys hanging out with his family, taking cold dips in the ocean at his favorite beach and playing golf on the weekends.