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Cord cutters, cord shavers, and binge-watchers are the major contributors to the streaming revolution. Traditional television viewing has declined, with people using OTT (Over-the-Top) devices like Roku, Apple TV, and Amazon Fire Stick.
With this shift in how audiences consume content, marketers have had to adapt their strategies to reach these new viewers. Connected TV (CTV) advertising has emerged as a powerful tool for reaching the elusive streaming audience.
Let’s explore what CTV advertising is and how it works.
Connected TV refers to any television connected to the internet and can access streaming content. Smart TVs, streaming devices (such as Roku, Chromecast, and Apple TV), and gaming consoles (like Xbox and PlayStation) are all CTV devices.
Connected TV advertising places video ads on these connected televisions through streaming services or apps. CTV advertising allows marketers to reach audiences who have moved away from traditional TV and consume content through streaming services.
According to Forbes, 84% of US households have at least one CTV device, making it a valuable platform for advertisers to reach a wide audience.
Now that we understand connected TV advertising let’s explore its benefits.*
CTV ads are far superior in video quality and user experience compared to traditional TV ads. They are streamed at a higher resolution, making them more visually appealing and engaging for viewers.
The completion rate for CTV ads is also higher, as viewers are less likely to change the channel or fast-forward through the ad than traditional TV. With the rise of streaming services like Netflix and Hulu, viewers have become accustomed to high-quality video content. As a result, CTV ads are more likely to grab and maintain viewers’ attention.
One of the biggest advantages of CTV advertising is its targeted capabilities. Marketers can access a wealth of data from CTV devices, streaming services, and apps. With geographical data like ZMA, Zip Code, and IP addresses, advertisers can target specific regions or households.
They can also use demographic data such as age, gender, and income to ensure their ads reach the right audience. The behavioral data collected from streaming services and apps allow further targeting based on interests, past viewing history, and search queries.
This level of precise targeting ensures that ads reach the most relevant audience, increasing the chances of conversion.
CTV advertising also allows for hyper-localized and personalized ad delivery. Advertisers can target specific neighborhoods or cities based on IP addresses or ZIP codes. The ability to deliver ads based on location helps reach audiences in a particular area, making it ideal for local businesses.
Personalization is also possible through CTV advertising. Using data, advertisers can also personalize ads based on user interests and preferences. The relevance and personalization of these ads lead to higher engagement and conversion rates.
Unlike traditional TV advertising, CTV advertising provides real-time data and analytics for campaign optimization. With the ability to track impressions, clicks, conversions, and more, marketers can adjust their campaigns in real-time for maximum impact. They can make data-driven decisions to optimize campaigns and improve their ROI (ROI).
While connected TV and Over-the-top (OTT) advertising may seem similar, some key differences exist. OTT refers to any streaming content across devices, including CTV, and includes desktops, laptops, tablets, and smartphones. These ads can be in the form of display ads, audio ads, or video ads.
CTV advertising, on the other hand, is specific to connected televisions and delivers video ads through streaming devices like Roku, Amazon Fire Stick, or Smart TVs. CTV ads are unskippable, ensuring that viewers see the entire ad.
If you are consuming Netflix or Hulu through a Smart TV, you see CTV ads. However, the ads will fall under the OTT category if you access these streaming services through your laptop or phone. OTT advertising can reach a broader audience, but CTV advertising offers better targeting capabilities and a more engaging user experience.
Traditional TV advertising has been the go-to medium for marketers for decades. While it still reaches a large audience, CTV advertising has some distinct advantages over traditional TV.
Firstly, CTV ads can target a specific audience through data and analytics, whereas traditional TV ads have a broader reach but less precise targeting capabilities.
Secondly, CTV ads offer better engagement and completion rates than traditional TV ads. As mentioned earlier, viewers are less likely to change the channel or fast-forward through CTV ads, leading to a higher return on investment for advertisers.
Lastly, CTV advertising allows for real-time data and campaign optimization, whereas traditional TV ads rely on post-campaign data analysis. This allows advertisers to make changes to their campaigns in real-time for maximum impact.
Advertisers typically work with an advertising platform or network when they want to run a CTV ad. These platforms partner with streaming services and apps to deliver ads to CTV devices.
The networks and publishers like Hulu, PeaCock, and Pluto TV sell ad space to advertisers through the platform. Advertisers can choose their targeting parameters, budget, and creatives, and the platform will deliver the ad to the selected audience.
Once the ad is created, it is delivered to CTV devices through streaming services or apps. The ad will then play during breaks in streamlining content, reaching viewers in real time.
The ads stop playing when the content resumes, ensuring viewers see the entire ad. The programmatic nature of CTV advertising allows for real-time tracking and optimization, providing valuable data to advertisers for future campaigns.
Advertisers can track several key metrics to determine the success of a CTV advertising campaign.
Impression tracking refers to the number of times an ad is displayed on a viewer’s screen. The total number of impressions can measure the potential reach of an ad campaign.
CPV is the cost per view, which measures how much it costs for a viewer to watch an entire ad. As CTV ads are unskippable, every view is considered a completed view.
ROAS measures the return on investment for an ad campaign by comparing the cost of the campaign to its revenue generated. If the ad spend is $100 and the revenue generated from the campaign is $200, the ROAS would be 2:1.
Frequency capping refers to limiting the number of times an ad is shown to a viewer. To prevent ad fatigue and ensure a better user experience, advertisers can cap the number of times an ad is shown to each viewer.
Viewability tracking measures how many viewers see the entire ad. Viewers who do not see the entire message should not be counted as viewers.
Demand-side platforms (DSPs) and supply-side platforms (SSPs) act as intermediaries between advertisers and publishers in the CTV advertising ecosystem. These partners can help with targeting, ad placement, and ad delivery for CTV advertising campaigns. They also provide valuable data and insights to help advertisers make data-driven campaign decisions.
VenziMedia is a programmatic DSP that offers advanced targeting options, real-time campaign optimization, and transparent reporting for CTV advertising. Our platform partners with top streaming services and apps, giving advertisers access to a vast inventory of CTV ad space.
