Over the past 10 to 15 years, we have experienced a rapid pace of technological change. Every year, more and more consumers shift their TV consumption towards on-demand TV from the traditional, scheduled airtime TV.
In 2023, an astounding 88 percent of U.S. households owned at least one internet-connected TV device. The number of CTV users amounts to more than 110 million among Gen Z and Millennials.
Number of connected TV users in the United States from 2020 to 2025, by generation (in millions)
Source: Statista
In fact, streaming entertainment accounted for 32% of total TV time in May 2022, up from 26% one year ago. (Nielsen). CTV advertising is a $9 billion dollar industry, that allows marketers to reach targeted audiences like never before. Keep reading to understand why CTV advertising is an opportunity you can’t afford to ignore.
1. What is Connected TV (CTV)?
Connected TV, often referred to as Smart TV, is a television that connects to the internet, allowing viewers to access streaming content, apps, and other online services directly through their television sets.
2. What is a CTV Device?
A CTV device is one that connects to or is embedded in a television supporting video streaming services like a SmartTV, Xbox, Roku, Apple TV, etc.
3. Who is a Cord Cutter?
You can probably imagine what a “cord cutter” refers to, as the term has been used for years in regard to cutting ties to the traditional landline phone and opting for the freedom of a mobile device. The same goes for TV and video opportunities. On-the-go streaming has made it possible to watch your favorite shows and provide hours of entertainment from just about any home TV and mobile device. Many times, the apps and services are less expensive than traditional cable, so cutting ties to the expensive service tethered to your home TV is a no-brainer for those on the move.
4. What is CTV Advertising?
Connected TV Advertising is a form of digital advertising that appears within streaming content on TVs. These ads are shown alongside TV shows or live streams viewed on streaming devices. They can also be interactive ads shown to a specific audience and include actions for viewers to take.
5. How Does CTV Advertising Work?
With CTV advertising, users see your ads when watching video content on their smart or connected TV. Users watching popular streaming platforms like Netflix, YouTube, Hulu, etc. will see various video, interactive, or display ads throughout their streaming.
6. What KPIs are Used to Measure CTV Advertising?
A key metric to track is ROAS, or the return on ad spend. This number will tell the story of how your campaign is performing in general. There are many ways to dive into these numbers because CTV ads have the ability to target in very specific ways.
7. How Does CTV Differ from Traditional Television?
CTV differs from traditional television in that it doesn’t rely on cable or satellite connections. Instead, it uses an internet connection, enabling viewers to access a wide variety of on-demand content.
8. Is CTV Advertising More Effective Than Linear TV Advertising?
CTV offers more precise and cost-effective targeting than linear commercials on traditional cable channels. Linear ads are viewed by everyone based on an assumption of interest.
According to Strategus, “Since CTV advertising is hosted digitally, campaigns see instant results, at any time.”
Related Reading: CTV: Industry Disruption and Opportunity
9. Is CTV Advertising Affordable for Small Businesses?
CTV advertising can be cost-effective, with options for budgets of all sizes. Many platforms allow for flexible spending, ensuring that even small businesses can benefit from CTV advertising.
10. What is the Difference between CTV, OTT, and Streaming?
Connected TV (CTV), Over-the-Top (OTT), and Streaming are closely related terms, but they refer to different aspects of the ecosystem. Here are the key differences:
Connected TV (CTV)
Definition: CTV, also known as Smart TV, refers to the physical television sets that are connected to the internet. These TVs have built-in Wi-Fi capabilities and can access online content directly without the need for external devices.
Usage: CTV is the hardware through which viewers can access OTT streaming services (e.g., Netflix, Hulu, Disney+, Amazon Prime Video) and other online content, including apps, websites, and social media platforms.
Examples: Smart TVs from brands like Samsung, LG, Sony, and Vizio are all examples of CTVs.
Role: CTVs serve as the platform on which viewers can enjoy OTT content, making it a physical device.
Over-the-Top (OTT)
Definition: OTT refers to content delivery over the internet, bypassing traditional cable or satellite television providers. It’s a method of distributing video, audio, and other media content directly to viewers via the internet.
Usage: OTT encompasses the content itself, including streaming services like Netflix, Hulu, and HBO Max, which are accessible via CTVs, as well as other devices like smartphones, tablets, computers, and streaming media players.
Examples: Netflix, Hulu, Disney+, YouTube, and Amazon Prime Video are all examples of OTT streaming services.
Role: OTT services provide on-demand content to viewers across various devices, regardless of whether the content is accessed through a Smart TV (CTV) or other devices.
Streaming
Definition: Streaming, in the context of digital media, refers to the process of continuously delivering audio or video content over the internet in real-time. It allows users to access and consume media content without downloading it to their devices.
Usage: Streaming focuses on the action of consuming content as it’s delivered in real-time over the internet.
Examples: When you watch a movie on Netflix or listen to music on Spotify, you are engaging in streaming. The content is delivered in a continuous stream as you watch or listen.
11. What is the Difference Between CTV and OTT Advertising?
Simply put, OTT, or over-the-top is the delivery of advertising for TV or video content online through streaming or on-demand entertainment. CTV is an internet-connected device used to watch TV or video content online. With CTV, the ad impression is on an actual TV set. OTT is comprised of CTV with mobile and desktop.
12. What Types of Creative are Needed for a CTV Advertising Campaign?
There are a few best practices when it comes to the creative needs of a CTV advertising campaign. Leveraging a clear call-to-action (CTA) is imperative. Some general rules of thumb relate to size and file format. It’s recommended VAST 2.0, 3.0 and 4.0 specs are followed. The file format must be .mp4 with the duration recommended at 15 or 30-second non-skippable ads. Recommended dimensions are 1920 x 1080.
13. What is the Difference Between Pre-Roll, Mid-Roll, Post-Roll, and Interactive Ads?
Pre-roll, mid-roll, post-roll, and interactive ads are common formats for delivering video advertisements. Here’s an explanation of each:
Pre-Roll Ads
Position: Pre-roll ads are video advertisements that appear at the beginning of the content before the viewer’s chosen video begins.
Usage: Pre-roll ads are typically short (usually 15-30 seconds) and are commonly used to capture viewers’ attention before they watch the main content.
Mid-Roll Ads
Position: Mid-roll ads are video advertisements that appear in the middle of the main content, interrupting the viewer’s viewing experience.
Usage: Mid-roll ads are used to monetize longer-form video content, such as TV shows or longer YouTube videos. They can vary in length, depending on the platform and content duration.
Post-Roll Ads
Position: Post-roll ads are video advertisements that appear at the end of the main content, after the viewer has finished watching the primary video.
Usage: Post-roll ads are often used to maintain viewer engagement after they’ve consumed the main content, offering additional advertising opportunities.
Interactive Ads:
Format: Interactive ads engage viewers by offering clickable elements or interactive features within the video ad.
Usage: Interactive ads encourage viewer participation, allowing them to click on the ad to learn more, explore products, or take specific actions, such as signing up or making a purchase.
14. What is Programmatic Advertising in CTV?
Programmatic CTV advertising uses automated technology to buy and place ads, optimizing targeting and efficiency.
15. How can Brands Ensure Ad Viewability on CTV?
Brands can work with publishers and ad tech providers to ensure their CTV ads are delivered to viewable placements.
16. What Types of Targeting Can be Used with CTV?
There are many types of targeting that can be used. They spread across categories like IP targeting, cross-device targeting, and first-party targeting. It’s fully customizable to look at and target behavior based on relevant browsing behavior, general demographics, contextual targeting based on current entertainment consumption, geographic information, and time of day, among others.
17. What Types of Data Can Advertisers Use to Build Audiences?
Advertisers can use a variety of data types to target audiences on Connected TV (CTV) platforms. These data types provide insights into viewer behavior, preferences, and characteristics. Here are some of the key data types used for CTV audience targeting:
- Demographic Data: Information about viewers’ age, gender, location, household size, and income can help advertisers target specific demographic groups.
- Geographic Data: Geographic data allows advertisers to target viewers based on their location, enabling local, regional, or national targeting.
- Behavioral Data: Behavioral data includes viewers’ past actions and interactions on the CTV platform, such as content consumption, search queries, and app usage. It helps identify user interests and preferences.
- Contextual Data: Contextual data takes into account the content being watched. Advertisers can target viewers based on the genre, topic, or keywords related to the content.
- First-Party Data: Advertisers can use their own first-party data, such as customer data from their CRM systems, to create custom audience segments for targeting.
- Third-Party Data: Third-party data sources provide additional insights from external data providers. This data can include interests, shopping behaviors, and more.
- Weather Data: Weather data can be used for contextually relevant advertising. For example, an ad for cold beverages may be more effective on a hot day.
- Social Media Data: Data from viewers’ social media profiles and interactions can be used to target audiences with similar interests and behaviors.
18. Are CTV Ads Skippable?
Some CTV ads are skippable, while others are non-skippable. The format varies depending on the platform and content.
19. Is CTV Ad Inventory Limited?
CTV ad inventory can be competitive, but it continues to grow as more publishers and platforms embrace streaming.
20. How Can Advertisers Measure CTV Campaign Effectiveness?
Metrics like view-through rates (VTR), completion rates, click-through rates (CTR), and conversion tracking help measure CTV ad performance.
21. How do I Integrate CTV Advertising into an Omnichannel Campaign?
Omnichannel marketing has been shown to move customers further along the purchase funnel, which is why an omnichannel campaign is seen as more effective than multichannel marketing.
Adding the CTV advertising component to your overall marketing campaign offers the ability to measure attribution and effectiveness in a way most others don’t. The targeted approach will provide insight that directly links to users who are more apt to be interested in your product or service.
22. What’s the Future of CTV?
The future of CTV is bright. It’s expected to continue growing in popularity as more viewers shift away from traditional cable TV. As technology advances, we can anticipate even more innovative CTV experiences and advertising opportunities.
CTV Advertising Solutions
Connected TV is reshaping the way we consume video content and how advertisers reach their target audiences. Understanding the basics of CTV, its benefits, and its implications is important for advertisers to stay ahead in the ever-evolving world of digital media. See for yourself how our CTV solutions can help you boost customer acquisition.
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