Samsung’s Justin Fromm On What’s New With The Rule Of 40
Samsung Ads just released an update to their groundbreaking report on the Rule Of 40 that says brands should allocate 40 percent of their budget to CTV.
Justin Fromm, Head of Global Insights, takes us through the key findings and where CTV advertising is headed in the latest Thought Leaders Circle video.
Justin Fromm: This is the second time we've published the rule of 40. The first time we published
it was earlier this year, and that analysis demonstrated the need for advertisers to shift budgets to CTV
to reach the growing audience that's moving away from linear.
Today, in fact, 27% of Samsung households are streaming only, meaning that at best a linear campaign reaches just 73%. In this analysis, what we wanted to demonstrate was that as more viewers shift away from linear, even if they watch linear and consume linear content, it's very difficult to reach them.
And it's certainly very difficult to reach them with the frequency intended by an advertiser.
On Samsung televisions 90% of all linear minutes are consumed by just 25% of linear viewers.
And that's because so many of our viewers are light to medium linear television viewers.
They tune in just a few hours a week or just a few hours a month.
They're technically linear viewers, but it's very hard to reach them.
So what we did this time was demonstrate that by utilizing CTV, not only can you reach the hard
to reach or difficult to reach or impossible to reach streaming only audience, but actually it's easier to reach some of those linear viewers.
And so not only do you increase reach to all audiences, you actually increase your national television reach.
The new TV landscape is such that the practical reach of a linear campaign to adults 18 to 49 is just 50%. You can, with a very large spend, maybe reach 60% of the total audience. But the frequency at that point for those heavy viewers is well off the charts.
We're at this pivotal point in the TV ecosystem as viewers continue to shift more of their viewing to streaming and more viewers continue to shift away from pay and linear television.
And so that 40% line, kind of that demarcation is only going to shift larger and greater as as time moves on.
So it's the rule of 40 today, but it very quickly will become the rule 50 in the rule of 60.
