It's time to flip the TV advertising paradigm: linear is now incremental to streaming.  

Over the past several years, we at Samsung Ads have been demonstrating the need to move TV ad budgets from linear to CTV to achieve total reach of American viewers. Our “Rule of 40” called for 40% of TV budgets to move to CTV. While the idea may have been novel to some in the industry when we introduced it in 2021, most advertisers now understand that TV viewing is multi-channel and that successful TV advertising campaigns require a share of budgets across linear and streaming. And yet, viewing behaviors continue to shift. Today, 63% of Samsung Smart TV viewers spend more of their TV time with streaming content than with linear, broadcast TV. We call these viewers “Streaming-Centric”. These Streaming-Centric viewers use streaming as their primary viewing source. Many of them don’t consume any linear.

We used our automated content recognition data, which identifies all the content and ads that air on linear TV to explore whether linear ad campaigns reach Streaming-Centric viewers or not. Based on 15 ad campaigns from a variety of industry verticals, we built a reach curve for linear ads to Streaming-Centric viewers.

The results were shocking but not surprising. Even the biggest linear ad campaigns reach just 17% of the Streaming-Centric audience. When you do the math, linear ad campaigns are unable to reach 52% of the TV Universe! If the maximum reach of linear TV is just 48%, then it’s time to rethink how we approach TV advertising. Linear is now incremental to CTV.

Luckily, streaming is no longer primarily ad-free. Advertisers can reach streamers, both the 63% of Streaming-Centric viewers and the 25% of viewers who watch both add streaming to their linear, in streaming content. In fact, ad-free viewing has declined every quarter over the last year and ad-supported streaming now accounts for nearly two-thirds of streaming time.

So while we love the Rule of 40, advertisers can no longer shift just 40% of their impressions to CTV. It is now time to revisit long-held assumptions that linear TV budgets should lead allocation. Linear advertising is insufficient for reaching the majority of viewers. Nor is it needed to quickly scale significant audience reach. CTV should be the foundation of an efficient and effective reach strategy for TV advertisers.