So you want to advertise on TV.
Pretty straightforward, right? Well, it’s a bit more complicated than that. You know the feeling when you drag yourself to the neighborhood diner for a quiet breakfast only to be bombarded with “how do you want your eggs?”, “sausage or bacon?”, “ coffee black or with cream?”, “biscuit or toast?”? Well, it’s kind of like that but the payoff is a perfect egg, er… ad.
As we were saying, you want to advertise on TV? Great! Broadcast? Cable? CTV? OTT? Let’s have a look at what it all means and, more importantly, what it will cost you.
In today’s media buying landscape, there are two major types of TV advertising channels, which include some subcategories:
Linear television is what we think of as “traditional” television that broadcasts programs in a certain order, listed in your trusty weekly television digest. It stands in opposition to “on demand” streaming which allows viewers to decide when and how to watch specific programs. Within the linear television framework, viewers can opt for different delivery systems: broadcast or cable. Same goes for advertisers.
Broadcast television transmits programs by using public airwaves, which means channels are available for free to any household within the range of a transmitter. All revenue comes from selling commercial spots to advertisers. Broadcast television viewership has taken a dramatic downturn, but remains strong for live events, especially sports and politics.
Cable television is a more recent option in the linear television category, and while it offers a more customized experience, it still does not allow for on-demand viewing. Cable television programs reach households through coaxial or fiber-optic cables and, contrary to broadcast television, viewers are charged a subscription fee to access their programs.
Connected Television and “Over-The-Top” Television are basically the same from an advertiser’s point of view, but different in the ecosystem of on-demand streaming. The first refers to the machine through which viewers are able to receive the streamed content (quite literally a television connected to the internet) and the second to the on-demand content they are receiving through an “over-the-top” device connected to their television (think of a fire stick or Roku dongle.)
YouTube has hopped on the CTV bandwagon, with YouTubeTV now offering similar capabilities to your favorite streaming channels like Hulu or Sling.
TV Advertising Rates
Ok, you’ve got the lay of the land and now you’re ready to spend. Here’s the insider info you’re looking for.
Broadcast television has a much greater reach than cable television since it is automatically delivered to every household within a given area, regardless of subscription status, but that reach will cost you. Average broadcast television CPMs run between $25 and $45.
Cable television allows for better targeting based on subscriber profiles, but has a limited reach and, more importantly, is becoming increasingly obsolete compared to more user-friendly Connected TV and OTT systems. In fact, according to a recent Statista study, cable watchers are “cutting the cord” at an unprecedented rate, especially since the pandemic. Average cable television CPMs run between $15 and $35.
YouTube for CTV
YouTubeTV is a bit of an outlier, since it has begun offering long form “television style” programming, but the watching experience remains fragmented and the market share is not yet clearly defined. With that in mind, CPMs are currently low, but may begin to increase soon. Average YouTube TV CPMs run between $10 and $20.
CTV and OTT
Since early 2020, CTV viewership has dramatically increased, with 55% of all television viewers watching on CTV rather than linear television. Because CTV (and OTT) are delivered via a household’s IP address, it is a highly targetable, highly trackable media channel with an inventory growing at super speed. It also now reaches a vast inventory of channels, which was not the case just two years ago. Today, advertisers can find their audiences on virtually any channel. Because it is still new to the market, typical CPMs can still be quite high. Average CTV CPMs run between $20 and $40; but, keep reading for good news…
Vibe.co was founded by ad tech industry veterans who understand that the key to a disruptive sector like CTV is a powerful new product, not hype. That’s why they were able to develop one of the smartest and fastest-learning bidding tools in the industry. Add to that private deals with premium channels and apps, and you get… Average Vibe.co CTV CPMs run between $10 and $20!