Samsung Ads Warns Of Linear TV Ad Imbalance

Samsung Ads’ big sales message offers tough words for linear TV marketers mulling a small shift of linear TV budgets to advertising video on demand (AVOD) services: It’s not enough.

Research from the company suggests unless linear TV marketers shift a massive 40% of linear TV budgets to AVOD services, they will suffer a “state of severe imbalance.”

Earlier this year -- before the upfront market commenced -- TV networks implored TV marketers to shift anywhere from 20% to 30% of their linear TV budgets to their premium ad-supported streaming platforms and other digital video assets.

For its research, Samsung looked at certain categories -- automotive, consumer-packaged goods (CPG), and TV network tune-in ads -- that showed a major imbalance.

Linear TV networks marketers over-indexed anywhere from 197 to 203, while streaming-enabled homes under-indexed at around the 92 level. This came from marketers that spent 100% of their budgets with linear TV.

Shifting 40% of linear TV dollars to streaming-enabled homes brought down the linear TV index for those three ad categories to around a 110 to 129 and streaming platforms higher to 98 or 99 index.

Samsung says its 40% rule applies to most categories and should go higher in specific instances: 45% for “luxury auto intenders” and 50% for 25-54 viewers, for example.

Dave Morgan, president/founder of Simulmedia, told Television News Daily, the 40% number does not make sense: “Ad-supported streaming is well under 10% of total viewing on TV in the U.S. ... For sure, marketers should over-invest in the future of ad-supported streaming and should go at a higher number than 8% to 10% of their premium video budget.”

He adds: “Connected TV ads can carry better targeting, so there should be less waste theoretically, but there isn't logic for TV advertisers broadly to go deeper than 20% to 25% or so unless their target customer is much better reached on Hulu, Peacock, etc. Plus, premium AVOD rates are at $24 CPM [cost per thousand viewers] untargeted [persons 2 years and older] and national cable is around $5 CPM.”

Another media agency executive responded: “It makes sense in the extreme.” He adds longer term, this may make sense: “A two-year plan, but it will happen. Linear is actively trying to kill itself.”

The report cites data from more than 50 million Samsung Smart TV homes in the U.S. showing 78% of streaming-enabled homes watch little to no linear TV, only “one-third of an hour per day.”

Samsung Ads created a model to measure the gross rating point delivery of network and cable TV schedules against linear-only and streaming-enabled audiences.

Its data is not modeled or based on aggregated panels, instead coming from first-party data via Automatic Content Recognition (ACR) technology, which identifies content viewership across linear TV, OTT and gaming platforms.

Third-party data comes from The Nielsen Company -- but not validated or endorsed by Nielsen -- and MediaRadar.

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