Performance TV: What Is It & How Does It Work?

Performance TV is transforming advertising by merging the expansive reach of television with the strategic approach of performance marketing. But, what is it and how does it work?

In this article, we will explore the mechanics of Performance TV advertising, illustrating its benefits and the pivotal role it plays in modern advertising strategies.

What Is Performance TV?

Performance TV is a term coined by MNTN, describing their innovative approach that combines the expansive reach of connected TV (CTV) with the precise, measurable tactics of performance marketing.

This method leverages advanced targeting and real-time measurement to optimize advertising outcomes on streaming platforms. By focusing on tangible results, Performance TV provides advertisers with detailed insights into campaign effectiveness, optimizing strategies for higher ROI.

Performance TV vs. CTV Advertising

CTV advertising broadly refers to the placement of ads on internet-connected televisions, without a specific focus on performance metrics.

Performance TV, however, is a targeted strategy that integrates performance marketing principles with CTV advertising to achieve measurable business outcomes.

Performance TV vs. OTT Advertising

OTT advertising, or over-the-top advertising, involves delivering content directly via the internet to viewers, (on all devices, not just television sets) bypassing traditional broadcasters.

In other words, Performance TV is considered a branch of OTT advertising.

Performance TV vs. Addressable TV Advertising

Addressable TV advertising targets specific audiences on their television devices with personalized ads through cable, satellite, and IPTV services (MVPDs).

Performance TV enhances this by using connected TV platforms and focusing intensively on performance analytics to track and optimize ad effectiveness in real time.

Performance TV vs. Linear TV Advertising

Linear TV advertising is the traditional method of scheduling commercials (such as cable TV ads) during television broadcasts, reaching audiences at fixed times.

In contrast, Performance TV leverages connected TV technology to deliver ads to users while they access on-demand content (SVOD, AVOD, TVOD).

Benefits of Performance TV Advertising

Performance TV advertising leverages cutting-edge technology to deliver several strategic advantages to advertisers seeking measurable results.

1. Targeting Audiences with Precision

Performance TV allows advertisers to target specific demographics, interests, and behaviors with a level of accuracy that traditional TV advertising cannot match. This precision helps in delivering content to the right audience, enhancing the relevance and effectiveness of ad campaigns.

2. Localized Targeting Using IP Addresses

By utilizing IP addresses, Performance TV enables advertisers to target audiences based on their geographic location. This capability allows for more relevant local TV advertising, which can be particularly effective for regional marketing strategies.

3. Elevated Video Completion Rates

Performance TV tends to have higher video completion rates compared to traditional digital advertising platforms. This is likely due to the non-skippable format of many CTV ads and the engaging nature of the content tailored to viewer preferences.

4. Real-Time, Accurate Measurement and Attribution

One of the core benefits of Performance TV is its ability to provide real-time metrics and CTV attribution. Advertisers can track the impact of their campaigns with precision and make data-driven decisions quickly to optimize performance.

5. Automated Optimization of Campaigns

With Performance TV, campaign optimization is automated based on performance data. This technology-driven approach adjusts bidding, targeting, and even creative elements dynamically to improve the efficiency and effectiveness of advertising efforts.

How Does Performance TV Advertising Work?

Performance TV advertising integrates sophisticated technology and data-driven strategies to enhance advertising efficacy and ROI. Here is a step-by-step process for how it works:

• Step 1 – Campaign Planning: Advertisers define their target audience based on detailed demographic, behavioral, and geographic data.
• Step 2 – Creative Development: Tailored ads are created to resonate with the targeted audience, ensuring higher engagement and relevance.
• Step 3 – Platform Selection: Ads are placed on connected TV platforms that align with the advertiser’s audience profile and campaign goals.
• Step 4 – Launch and Monitoring: The campaign is launched, and its performance is continuously monitored using real-time analytics to assess viewer engagement and response.
• Step 5 – Automated Optimization: Based on performance data, the campaign is dynamically adjusted—creative elements, targeting, and spending—to maximize effectiveness.
• Step 6 – Measurement and Reporting: Detailed reports analyze campaign performance across various marketing metrics to provide clear ROI and attribution, informing future advertising strategies.

Where Are Performance TV Ads Shown?

Performance TV’s programmatic ads are showcased across a variety of connected environments, reaching audiences where traditional TV cannot.

• Streaming Platforms: Ads are placed on popular streaming services such as Netflix, Hulu, Amazon Prime, and FAST channels, which have massive, engaged viewer bases.
• Connected TV Apps: Network-specific apps like those from NBC or CBS also serve as platforms, allowing for targeted advertising within their streaming content.
• Gaming Consoles: Consoles like PlayStation and Xbox, which host streaming apps, offer a unique demographic for advertisers targeting younger, tech-savvy audiences.
• Smart TV Interfaces: Many smart TVs come with pre-installed streaming apps where ads can be integrated seamlessly into the user experience.
• Third-Party Devices: Devices such as Roku, Apple TV, and Amazon Fire Stick, which aggregate various streaming services, also support Performance TV ads, expanding reach across multiple services.

Types of Performance TV Ads

Performance TV advertising offers a range of ad types that can effectively reach target audiences on connected TV platforms.

• Pre-Roll Ads: These are short video ads that play before the main content starts, capturing the viewer’s attention when engagement is likely at its highest.
• Mid-Roll Ads: Similar to traditional TV commercial breaks, mid-roll ads appear during breaks in the main content, maintaining viewer engagement.
• Post-Roll Ads: These ads play after the main content has concluded, targeting viewers who watch through to the end.
• Interactive Ads: Enhanced with interactive features, these ads engage viewers by offering clickable elements that can lead to direct actions, like visiting a website or learning more about a product.

How Are Performance TV Audiences Targeted?

Performance TV utilizes advanced CTV audience targeting capabilities to ensure ads reach the most appropriate viewers, enhancing campaign effectiveness.

• First-Party Data: Advertisers can leverage their own customer data to target ads more precisely. This includes using information such as past purchases, browsing history, and customer profiles to craft personalized advertising experiences.
• Third-Party Data: This involves using data sourced from external providers, which offers insights into broader audience behaviors and preferences, allowing advertisers to extend their reach beyond their existing customer base.
• IP Targeting: By targeting specific IP addresses, advertisers can deliver localized ads that are more relevant to viewers based on their geographic location, enhancing the relevance and impact of the message.
• Frequency Caps: To avoid ad fatigue and maintain a positive user experience, frequency caps limit the number of times a specific viewer is shown the same ad within a given time period. This strategy ensures ads remain effective and engaging without overwhelming the audience.

Performance TV Metrics and Measurement

Performance TV provides a comprehensive suite of CTV metrics to measure and optimize streaming advertising campaigns effectively.

• Impressions: Measures the number of times an ad has been displayed, regardless of whether it was clicked or not.
• Return on Ad Spend (ROAS): Evaluates the efficiency of the advertising spend by comparing the revenue generated from the campaign to the cost of the ads.
• Cost per Completed View (CPCV): The cost advertisers pay for each ad that is watched through to completion, reflecting viewer engagement.
• Cost per Acquisition (CPA): Calculates the cost associated with acquiring one new customer, a key metric for evaluating the effectiveness of the campaign in driving conversions.
• Reach: The total number of unique viewers who have seen an ad, useful for understanding the scope of an ad’s impact.
• Frequency: Tracks the average number of times each viewer sees an ad, helping to balance ad exposure and avoid viewer fatigue.
• GRP (Gross Rating Point): Indicates the total exposure of an ad campaign by measuring how many times it’s been seen relative to the target audience size.
• CPP (Cost Per Point): The cost to reach one percent of the targeted audience, a metric used to gauge the cost-efficiency of different media.
• Cross-Screen Measurement: Assesses how ads perform across different devices, crucial for understanding how audiences interact with campaigns on various screens.
• Target Rating Point (TRP): Similar to GRP but focused specifically on the target demographic, measuring the percentage reached within the intended audience.

Performance TV Advertising Best Practices

Adopting strategic best practices can significantly enhance the effectiveness of Performance TV advertising campaigns. Some effective strategies include:

• Holistic Integration: Ensure your Performance TV efforts are integrated with broader strategies (omnichannel marketing), creating a cohesive message across all channels.
• Creative Consistency: Maintain consistency in messaging and branding across different CTV ad platforms to reinforce brand identity.
• Audience Segmentation: Divide your audience into more refined segments to tailor messages more precisely and increase ad relevance.
• Iterative Testing: Continuously test different ad elements, like creatives and call-to-actions, to identify what resonates best with your audience.
• Leverage Analytics: Use advanced analytics tools to gather insights and adjust strategies based on data-driven evidence.
• Focus on Storytelling: Craft compelling narratives that engage viewers emotionally, making the most of the video format’s storytelling potential.
• Ad Timing and Scheduling: Optimize the timing and frequency of your ads to maximize engagement without overexposing your audience.
• Optimize for Different Platforms: Make sure your ad uses the correct CTV specs to maximize the viewing experience.

Performance TV Advertising Examples

Performance TV advertising is used by top brands to deliver targeted, measurable ads. To add context, these aren’t necessarily MNTN clients, but these are CTV advertising examples from companies that have taken advantage of streaming platforms.

• Nike: Nike uses CTV advertising to showcase their latest products and campaigns, often integrating interactive elements that allow viewers to learn more or make a purchase directly from their smart TVs.
• Amazon: Amazon’s CTV ads highlight exclusive deals and new product launches, leveraging personalized data to target ads based on viewers’ shopping habits and interests.
• Coca-Cola: Coca-Cola utilizes CTV advertising to promote new beverage flavors and seasonal campaigns, incorporating engaging storytelling and dynamic visuals to capture the audience’s attention.
• Target: Target’s CTV ads focus on personalized shopping experiences, featuring tailored product recommendations and promotions that encourage viewers to shop online or visit their nearest store.
• Procter & Gamble (P&G): P&G employs CTV advertising for brands like Tide and Gillette, using data-driven strategies to reach specific demographics and drive product awareness and sales.

Performance TV: Final Thoughts

Performance TV has revolutionized the landscape of television advertising, offering brands a powerful platform to deliver targeted, measurable, and interactive ads. By leveraging advanced data analytics and the extensive reach of connected TV platforms, businesses can effectively engage their audiences, drive specific actions, and optimize their advertising strategies for better ROI.