How to unlock TV and OTT as a new performance marketing channel

By Lomit Patel | March 23, 2021

Lomit Patel, Vice President of Growth at IMVU, provides an overview on the best way to unlock TV and OTT as a new performance marketing channel. 

30-Second summary: 

  • Many up-and-coming brands, even those who consider themselves fiercely digital native, eventually reach the point of considering TV/OTT to reach millions of new users 
  • Performance marketing TV media can be tracked and optimized much more like digital media than TV has traditionally been viewed. 
  • The best way to set yourself up for success in testing TV and OTT is to work with a good TV agency that can help you better unlock this new performance marketing channel  
  • For some clients, their initial testing budget of $250K/month can scale up to 2-10x, while there are always those rare few who may not see life on TV.

Many up-and-coming brands, even those who consider themselves fiercely digital native, eventually reach the point of considering TV/OTT. Maybe their breaking point is the article about TV’s massive growth during COVID-19 and the other brands that rode that wave. Maybe it’s reaching the point where further investment in digital channels projects to deliver unacceptable diminishing returns. But when the time comes, the question generally becomes, “Should I do this… and IF I test this new strategy, how can I make meaningful learning quickly, yet minimize risk?”

Minimizing risk is relatively straight-forward. Performance marketing TV media can be optimized, shifted, or outright cancelled within 48-72 hours, making it much more like digital than TV has traditionally been viewed. Coupled with low scatter-market CPMs, a wide range of networks to choose from in size, audience, and program fit and even more worries can be soothed. And measurement, once TV’s major holdback, has been solved for as well. Site pixels as well as app tracking feeds can be fed into various modeling systems to be tied to TV spend in near real time and with near-live data access to performance reports, charts, etc., for both TV and OTT. That said, all of this direct attribution should be weighed against observable holistic lift and the client’s own observations in the early days of the campaign for level-setting.

“Should I do this?” is a more nuanced question. Brands new to TV should require their agency partners share research with them on any of their competitors who may be active in the space. This will help show how others have approached the space creatively as well as potentially answering if there’s a strong audience fit for the category and how far others have been able to scale. Agencies should additionally vet all plan networks against the client’s target audience via software like MRI and Helixa and share those learnings with the client. Similar category experience and case-studies should be used to provide the new-to-TV brand with projected metrics of what TV is expected to deliver – both at an attributed and holistic level.

Creatively, by the time most brands reach this stage, they have a wealth of experience in who their consumers are and how they like to be spoken to. This should be shared with the agency to inform not only the creative development for TV/OTT, but the program and channel mix. A mix of :15s and :30s is recommended, as well as at least 2 distinct spot concepts to start. This serves multiple purposes. One, the spot length mix allows for optimization on linear TV if the :15 (at half the cost of the :30) drives a better KPI – which it often does, provided the client’s full core message fits the format length, and their audience is accustomed to this sort of messaging. (Seniors are generally targeted with :60s at minimum, for instance, both for recall and to allow time to capture the 800# /CTA) Second, on OTT spot costs are equal for :30s and :15s, so running :30s has no cost premium. Lastly, going to market with 2 distinct concepts allows for the prevention of a false negative result on TV (e.g. If a single spot does not perform, then TV does not perform).

When it comes to making meaningful learnings quickly, the importance of an agency’s speed and transparency cannot be undersold. They need to be communicative, especially during crucial launch weeks – with daily data review and optimizations. It’s also important that there be a built-in testing structure – of not just multiple spots and lengths, but a variety of network tiers, dayparts, and genres, among other variables. A strong agency partner will take this relatively wide net and hone it quickly – dropping any underperformers, adding weight to leading networks for volume and efficiency, and using “if-then” logic to identify next networks to test into the mix.

On the client-side, one of the biggest remaining questions is often how much money to “bring to the table” for testing TV in a significant way. We strongly recommend a go-to-market budget of at least $250K for a 3-4 week test.  This may seem like a random round number, but it allows for a 3-4 week test matrix of various channels, from niche to Tier 1 – as well as statistically significant data on which spot concepts and/or lengths work best, and in which dayparts, genres, days of week, etc.  Having a budget that allows for frequency on a mix of channel sizes is particularly important, as many of the opportunistic or niche small channels on TV are either not scalable, or can receive more positive attribution than they deserve in some models.

So what will you get from that initial launch? Generally, Week 1 is dedicated to “Does TV work for this client? Meaning: “Are we delivering at or near their target metrics?” Any major outliers  – good or bad – are raised and either shifted or added to. In Week 2 and 3, the mix is toggled further as more data comes in on top spots, lengths, networks, and the benefit of further frequency or lag time. By Week 4, the agency should be able to identify the CPM that correlates to client success, as well as the footprint of TV networks that are delivering on client targets, and the near-term level to which that spend can be scaled safely. 

For some clients, their initial testing budget of $250K/month can rocket to a 5-10x safely. Others will choose to 2x and live at that level for a month or two, then scale again. For some, TV becomes a secondary or tertiary channel that doesn’t rival digital for their core audience. And there are always those  rare few who may not see life on TV. If this happens, a good TV agency should be honest during the test about their view of the prospects and even cut the flight short if data indicates.  

Lomit Patel is the Vice President of Growth at IMVU. Prior to IMVU, Lomit managed growth at early-stage startups including Roku (IPO), TrustedID (acquired by Equifax), Texture (acquired. by Apple) and EarthLink. Lomit is a public speaker, author, advisor, featured in Forbes Magazine and recognized as a Mobile Hero by Liftoff. Lomit’s bestselling book Lean AI, is part of Eric Ries’ “The Lean Startup” series, now available at Amazon.