How purchase data is redefining TV ad performance and driving revenue

One strategy that marketers and media planners can no longer overlook is purchase-based segmentation. By using past buying behavior to predict future loyalty and sales lift, teams are more effectively capturing full-funnel value.

“People think of TV as linear, so they plan linear and streaming with the same mindset using demographic targets to achieve broad reach,” said Peter Topol, vp, head of advanced TV partnerships at Circana. “Now that we have a better understanding of the viewer using big data and how the program content is delivered — whether it’s linear, connected, streaming — TV can be used to support the full marketing funnel and not just brand awareness.

“This upfront season, video investment teams are finding out that it’s easier to measure television, including the non-traditional ad formats,” he said. “Measurement can include more than reach and impressions. You can understand consumer decisioning from consideration all the way through to product purchase.”

As demographics and habits shift, purchase data illuminates

Understanding audiences is essential for advertisers to make optimal investments in linear and digital TV. However, with the TV market increasingly splintered, age brackets and other demographics are only one piece of the puzzle.

Circana projects that by 2030, millennials and Gen Z will dominate the U.S. population and drive 60% of retail sales growth. This cohort is more likely to gravitate toward streaming and digital-first content rather than linear TV. For added precision, they can also be reached with purchase-based targeting tactics. Indeed, past purchases are the strongest predictor of future buying behavior — regardless of age, gender or viewing preferences.

New solutions empower advertisers to use purchase-based segments to reach audiences more likely to convert, rather than racking up impressions. For instance, Circana offers targeting using purchase-based segments representing approximately 126 million U.S. households.

Consider the case of a snack brand that may have a significant Gen Z audience and targets creative about a new flavor to that demographic. However, without more precise and specific targeting parameters, the creative is also reaching consumers who don’t buy that type of snack and are less likely to convert — contributing to wasted spend. 

In one use case, Circana used online and offline product transactions to create a custom-built audience for Roku to find brand buyers through CTV. Using the purchase-based targeting, Roku delivered 35% more incremental sales than the previous campaign, with fewer than half of the impressions.

“The reality is that people all have their own unique spending habits,” said Todd McClimans, product manager at Circana. “When you’re using someone’s known past purchase behavior to target them, if you’re talking to them in the context of something they’ve done before, they’re more likely to engage.

“To reach any particular group more efficiently with your creative — even generational cohorts — grounding it in their actual past purchases,” he said, “is going to be more likely to drive that behavior.” 

How advertisers optimize TV strategies for ROI and sales lift

Combining CTV with purchase data allows marketers to optimize for business outcomes instead of viewership, particularly as CTV platforms introduce more shoppable formats.

According to findings from Circana, marketing mix modeling (MMM) shows that CTV delivers higher ROI per dollar in early flight weeks, especially for product launches.

By incorporating purchase data into their targeting approaches, advertisers can more effectively reach consumers who are active in a category but are not yet engaging with a brand. This is in addition to using purchase data to target loyal customers.

For instance, Circana partnered with an agency to develop a media buying strategy that supports a CPG brand’s new campaign objective of increasing sales. Using purchase-based targeting, Circana identified three types of consumers who would be responsive to the creative message: lapsed brand buyers, non-loyal/switching shoppers and buyers of competitive brands. Post-campaign, a sales measurement study confirmed this approach was successful with the brand achieving double-digit incremental sales lift — with more than half of incremental sales coming from new, lapsed and competitive buyers.

Retail media networks are another avenue for advertisers to target consumers on CTV.

As retailers, including Amazon and Walmart, enter the content distribution business, their first-party transaction data can be used to reach consumers when they are making purchase decisions. By leveraging RMN data across CTV, advertisers turn content discovery into purchases. In another boon to advertisers, partnering with retailers enables closed-loop measurement, allowing them to attribute TV ad exposure directly to specific sales outcomes.

“Retail media provides CPG brands incremental reach beyond their national media buys through traditional properties,” said Topol. “In addition, retail media provides more than reach. Brands can tie their retail media buy to in-store promotion initiatives and drive conversion. The result is a full funnel execution from brand awareness to product purchase.”

Ahead of upfront and NewFront season, advertisers using purchase data are identifying the most effective avenues for their spending. Looking beyond reach and measuring sales impact is an important step for advertisers to take TV from a brand awareness channel to a precise performance channel.

“Now that you can measure TV across media platforms holistically, brands can ask their media partners for guarantees on sales performance instead of only audience KPIs,” Topol said. “Moving from measuring reach and frequency to sales outcomes is a new approach that brands can now plan for with national media.”

Partner insights from Circana