The Benefits of Connected TV Advertising for Businesses of All Sizes

Introduction to Connected TV Advertising: A Beginners Guide

What is Connected TV advertising?

Let’s dive right in, shall we? Connected TV advertising, also known as CTV advertising, is like the love child of traditional television advertising and digital advertising. It is delivered on internet-connected television sets. This could be via a smart TV itself or devices that connect a TV to the internet, like a gaming console or streaming devices such as Roku or Amazon Fire Stick. This allows advertisers to display their ads right in the middle of your favorite digital streaming content – just like in the good old days of cable TV but with a modern twist!

The difference between OTT and CTV/PTV

Sometimes, the terms “Over The Top” (OTT) and “Connected TV” (CTV) or “Programmatic TV” (PTV) might seem like they’re playing a confusing game of musical chairs in your mind. Let’s clear up the confusion. OTT refers to content that’s delivered over the internet without the need for traditional broadcast or cable TV subscriptions. This is your Netflix, Hulu, and Amazon Prime Video content. CTV is a subset of OTT, specifically dealing with content consumed on a television screen that’s connected to the internet. PTV, on the other hand, is the technology that automates the buying and selling of TV advertising, and it can include both OTT and traditional TV.

What is CTV advertising and how does it work?

CTV advertising works a bit like a blend of traditional and online advertising. Just like traditional TV, ads are shown during breaks in a show. However, CTV advertising can be precisely targeted to specific audiences and can be interacted with, similar to online ads.

For example, suppose you are a sports equipment retailer. You could potentially target your ads to viewers who are watching a live sports event on a streaming platform. The ads are generally shorter than traditional TV ads, and viewers can sometimes interact with them, such as clicking to visit a website.

Who is the target audience for Connected TV advertising?

Now, who should be on the receiving end of these ads? The target audience for CTV advertising is, in essence, anyone who watches streaming content on a connected TV device. This encompasses a broad range of demographics, as people of all ages and backgrounds are now consuming digital content. However, CTV allows for advanced targeting based on viewer interests, behaviors, and more, so advertisers can really narrow down their audience. For instance, if your product is a trendy health drink, you could target your CTV ads towards young adults who watch fitness-related content. So, in a nutshell, your target audience is as wide or as specific as you make it!

The Benefits of Connected TV Advertising

What are the benefits of Connected TV advertising?

There are several compelling reasons to venture into the world of CTV advertising. It’s not just about being trendy or keeping up with the Joneses in the digital marketing world. It’s about leveraging the power of advanced technology to connect with audiences in meaningful and effective ways.

Reach a large, engaged audience

One of the biggest perks of CTV advertising is the sheer size and engagement of the audience. Today, more and more people are cutting the cord on traditional cable TV and opting for streaming services. In fact, by 2025, it’s estimated that there will be over 204 million CTV viewers in the United States alone. Now, that’s a lot of eyeballs on screens! Plus, viewers on streaming platforms are often highly engaged in the content they’re consuming, making them more receptive to ads.

Target your ads to specific audiences

Remember those days when TV ads were blasted out to everyone and anyone watching a particular channel at a particular time? CTV advertising is a far cry from that. With the advanced targeting capabilities of CTV, you can reach the right people with the right message. That’s because CTV advertising allows for precise audience targeting based on data like demographics, interests, and viewing habits. So, instead of shouting your message into the void, you can have an intimate conversation with your ideal customer.

Measure the success of your campaigns

Tracking and measuring your ad performance is crucial in any form of advertising, and CTV advertising does not disappoint in this arena. Unlike traditional TV advertising, where the measurement of ad effectiveness can be a bit nebulous, CTV offers detailed analytics and reporting. You can track metrics like video completion rate, impressions, clicks, and conversions. This allows you to tweak and optimize your campaigns for maximum effectiveness.

Get more bang for your buck

Who doesn’t love a good bargain? CTV advertising offers advertisers a cost-effective way to reach their target audience. Since the targeting is so precise, there’s less ad wastage. You’re not paying to show your ads to people who aren’t interested in your offering. Plus, the real-time bidding process in programmatic CTV buying ensures that you’re getting the best prices for your ad slots.

Top 7 Advantages of Connected TV Advertising

1. CTV Advertising is Cost-Effective: As discussed earlier, with precise targeting and programmatic buying, you get more value for your money.
2. CTV Offers Precision Targeting: Get your message in front of the right people at the right time.
3. Next-Level Optimization and Measurement: Use real-time analytics to continually improve your campaigns.
4. Holistic Campaigns: CTV can be seamlessly integrated into your broader digital marketing strategy for a comprehensive approach.
5. CTV Has a High Adoption Rate: With millions of viewers, CTV is not a passing fad, it’s here to stay.
6. Setting Yourself Apart With Connected TV: Early adopters of CTV can enjoy less competition and more opportunities to shine.
7. CTV Provides Impressive Rate of Increase: The viewership and engagement on CTV platforms continue to grow at a rapid pace.

How to Create Effective Connected TV Ads

Use high-quality creative

In the world of CTV advertising, content is indeed king. Or maybe we should say, “creative” is king. The quality of your creative assets can make or break your ad campaign. This means you should aim to produce high-definition videos with great visuals and sound. The idea is to create ads that not only look good on a big TV screen but also can hold the viewer’s attention. Remember, you’re competing with their favorite shows and movies, so bring your A-game!

Use high-quality images and sound

The quality of your visuals and sound directly influences how viewers perceive your brand. Ensure your ads are sharp, clear, and professional. Sound is equally important. Good sound design can enhance the mood of the ad and make the messaging more impactful.

Make your ads relevant to your target audience

Even the most beautifully crafted ad will fall flat if it doesn’t resonate with its intended audience. This is why it’s important to ensure your ads are relevant to your target demographic. This could mean showcasing a problem they’re facing (that your product or service solves, of course!), reflecting their values, or tapping into their interests and hobbies.

Speak their language

Try to use the language, phrases, or even memes that your audience can relate to. This not only grabs their attention but also makes your brand feel more relatable and human.

Keep your ads short and sweet

In the fast-paced world of CTV, brevity is your friend. Viewers are used to short, snackable content, so try to keep your ads concise and to the point. Avoid long-winded explanations or unnecessary details. Instead, focus on conveying your main message as quickly and clearly as possible.

Make every second count

Each second of your ad should serve a purpose. Whether it’s showcasing your product, reinforcing your brand image, or evoking an emotion, make sure every moment of your ad is working towards your goal.

Use call-to-action buttons

Don’t forget to include a call-to-action (CTA) in your ad. This could be an invitation to visit your website, a prompt to learn more about your product, or a nudge to make a purchase. CTAs are crucial because they guide the viewer towards the next step and can significantly boost your conversion rates.

Make it stand out

A good CTA should be visually noticeable and should clearly tell viewers what action you want them to take. Don’t be afraid to be a little creative with your CTAs to make them more engaging and compelling.

Creating effective CTV ads may seem like a daunting task, but with these tips in mind, you’re well on your way to crafting ads that not only capture attention but also drive action.

Understanding Metrics in Connected TV Advertising

Just like traditional advertising mediums, the success of CTV advertising can be measured using specific metrics. Let’s dive into how to measure the success of your Connected TV advertising campaigns.

How to measure the success of your Connected TV advertising campaigns

Determining the success of your CTV ad campaigns involves tracking and analyzing key metrics. With advancements in digital technology, advertisers can now access detailed analytics and insights in real-time. This allows you to assess campaign performance, adjust targeting strategies, and optimize your ads for better results.

Key Performance Indicators (KPIs)

Some of the key performance indicators (KPIs) used to measure the success of Connected TV advertising include ad impressions, ad clicks, website traffic, and conversion rate. Tracking these KPIs gives you a clearer picture of your campaign’s effectiveness and helps you make data-driven decisions.

Track ad impressions

Ad impressions refer to the number of times your ad was displayed to a viewer. This metric is fundamental in measuring the reach of your CTV ad. A higher number of ad impressions means that your ad is getting more visibility, increasing the chances of achieving your advertising objectives.

Track ad clicks

Ad clicks represent the number of times viewers interact with your ad, typically by clicking on it. While clicking is less common in CTV advertising due to the nature of the platforms (most ads are not clickable like they are on the web), some CTV ads still offer interactive features. High ad click rates can indicate that your ad is engaging and relevant to the viewers.

Track website traffic

Tracking website traffic is crucial to understanding how your CTV ads are driving users to your site. An increase in website traffic after launching a CTV ad campaign can indicate the campaign’s success. Using tracking pixels and UTM parameters can help you understand where your traffic is coming from and if it’s being driven by your CTV ads.

Track sales

While impressions and clicks are important, they don’t tell the full story. Sales are the true bottom line in any ad campaign, and CTV advertising is no exception. Tracking sales helps you directly attribute revenue to your CTV ads. This might involve looking at sales data, tracking conversions, or using unique promo codes tied to your CTV campaigns. Remember, the ultimate goal of any advertising effort is to drive sales, so this is a critical metric to follow.

(Smart TVs) Connected TV performance measuring

With advancements in smart TV technology, advertisers can now access more granular data on viewer behavior. This includes how long they watch an ad, whether they skip it, mute it, or rewind to watch it again. These metrics offer deeper insights into how viewers are interacting with your ads, giving you a better understanding of your ads’ effectiveness and viewer engagement.

Connected TV CPMs

Cost per thousand impressions (CPM) is a critical metric used by advertisers to measure the cost-effectiveness of their campaigns. In the context of CTV, the CPM tells you how much it costs to reach 1,000 viewers with your ad. Comparing CPMs across different campaigns and platforms can help you determine where you’re getting the most value for your ad spend.

Remember, a lower CPM doesn’t always mean better value. You also need to consider the quality of the impressions and the level of viewer engagement. Sometimes, paying a higher CPM for a more engaged and targeted audience can result in a better return on investment (ROI).

Insights into the Connected TV Landscape

Understanding the terrain can guide you in making informed decisions about your Connected TV advertising strategies. In this section, we will take a closer look at the size of the connected TV market, its rapid growth, the increasing prevalence of streaming, and the rise in sports-related streaming.

Connected TV Advertising Statistics

CTV (Connected TV) advertising spending in the U.S. was valued at $20.69 billion in 20221

The CTV ad spending market size in the U.S. is projected to grow to around $24 billion in 2023, marking an increase of 26.5% to 26.7% from 20222

U.S. CTV ad spending is anticipated to surpass $21 billion in 2022 and $26 billion in 20233

How big is the connected TV?

Connected TV is no small market. In fact, it’s massive! As of 2021, it was estimated that over 204 million viewers in the United States alone use connected TVs. Globally, this number is much higher and is expected to continue growing rapidly in the coming years. The sheer size of the connected TV market presents significant opportunities for advertisers to reach diverse audiences in households around the world.

Connected TV advertising and OTT markets grow exponentially

The growth in connected TV advertising is mirroring the rapid growth of Over-The-Top (OTT) markets. OTT platforms like Netflix, Hulu, and Amazon Prime Video are experiencing tremendous growth, with more and more viewers choosing to stream their favorite content rather than watch traditional television. The rising popularity of OTT platforms is directly fueling the expansion of the connected TV advertising market.

Viewers Are Streaming More Content

With the rise of OTT platforms and connected TV, viewers are streaming more content than ever before. This isn’t just about the number of people streaming—it’s about the amount of time they’re spending on these platforms. With more viewers spending more time streaming, the opportunities for advertisers to reach these audiences increase.

Sports-related streaming is on the rise

Live sports have always been a significant part of traditional TV viewing. However, with the growth of connected TV, sports-related streaming is on the rise. Platforms like ESPN+, DAZN, and NBC’s Peacock are increasingly offering live sports to their subscribers. For advertisers, this presents a unique opportunity to reach passionate, engaged audiences who are tuned in to live sports content. This trend is only expected to accelerate as more sports leagues and events embrace streaming.

Getting Started with Connected TV Ads

Embarking on the connected TV advertising journey might feel daunting initially, but don’t worry! With a strategic approach, it becomes much more manageable. Let’s get started.

Define Your Target Audience

First things first, you need to know who you’re advertising to. Who is your ideal customer? What are their interests? What kind of content do they enjoy? What time of day are they most likely to be watching? Having a clear understanding of your target audience is key to creating effective, engaging advertisements.

Decide What Ad Inventory & Creatives to Use

Once you have your target audience clearly defined, the next step is deciding on your ad inventory and creatives. What types of ads are you going to use? Are you going to use video ads, banner ads, or perhaps a mix of both? The types of ads you choose should resonate with your target audience and fit seamlessly into the content they are viewing.

In terms of creatives, remember that quality is critical in the connected TV environment. Viewers expect high-quality, engaging content. Thus, investing in high-quality creatives is a must.

Take Note of Your Metrics and Benchmarks

Success in advertising is all about understanding your performance. Before you launch your ads, decide on the metrics that are most important to you. Are you focused on impressions? Click-through rates? Conversions? Define these benchmarks early on so you can accurately track your performance and make data-driven adjustments as needed.

Compare and Select Your Connected TV Vendor

It’s time to select your connected TV vendor. There are many options out there, so it’s important to do your homework. Consider factors such as cost, reach, ad formats offered, and any additional services they might provide. Most importantly, choose a vendor that aligns with your business goals and target audience. Remember, this is a partnership, so it’s vital to select a vendor that you feel confident will support your connected TV advertising endeavors.

What is Ad Fraud in Connected TV Advertising?

Ad fraud. Ugh, just the sound of it has a bit of a gut-wrenching feel, doesn’t it? It’s one of those phrases that makes advertisers and marketers worldwide cringe. Unfortunately, it’s an issue we have to tackle head-on in our industry, especially when it comes to newer platforms like Connected TV.

Ad fraud, in simple terms, is a practice where an individual or group attempts to defraud advertisers, publishers, or supply partners in the digital advertising ecosystem. They accomplish this through various malicious tactics, essentially robbing advertisers of their precious ad dollars. 

What are the different types of Ad Fraud?

Astonishing as it may seem, ad fraud has several faces, each one as unscrupulous as the last. Here are a few of the major types you might encounter:

1. Impression Fraud: This happens when fraudsters use bots or non-human traffic to create fake impressions, making advertisers believe their ad has been viewed more times than it actually has.
2. Click Fraud: Similar to impression fraud, click fraud uses automated systems or bots to generate fake clicks on an ad, skewing performance metrics and draining ad budgets.
3. Pixel Stuffing and Ad Stacking: These are practices where multiple ads are crammed into a single ad slot (pixel stuffing) or piled on top of each other (ad stacking). In both cases, only the top ad is viewable, but advertisers are charged for all of them.
4. Ad Injection: This is when unauthorized ads are inserted into a webpage, replacing existing ads or adding new ones without the publisher’s consent.
5. Domain Spoofing: Fraudsters pretend to be a reputable publisher to trick advertisers into buying impressions on their site.
6. Attribution Fraud: This occurs when a fraudster manipulates the attribution of an ad event, making it seem like it was the cause of a conversion when it wasn’t.

How does Ad Fraud affect Connected TV Advertising?

You might be thinking, “Oh, Connected TV (CTV) should be safe, right?” Well, even though CTV advertising is seen as a ‘premium’ environment, it’s not immune to ad fraud. In fact, it’s becoming a new frontier for fraudsters.

With CTV, we see familiar types of fraud, like bots and device spoofing. There’s also ‘server-side ad insertion’ (SSAI) fraud, where fraudsters manipulate technology used to streamline ad delivery on CTV. They trick advertisers into thinking their ads were shown on real CTV devices when they weren’t.

Ad fraud on CTV can lead to skewed performance metrics, wasted ad spend, and decreased ROI, similar to other platforms. But keep your chin up. The good news is that the industry is actively developing solutions to combat ad fraud, especially in the CTV space.

Deeper Dive into Connected TV Advertising

Now that we’ve covered the basics, it’s time to delve a little deeper into the world of connected TV advertising. What makes it unique, and why is it capturing so much attention from marketers across the globe? Let’s take a look.

What Sets CTV Advertising Apart?

Connected TV advertising is set apart by its ability to blend the best aspects of digital advertising with the power of TV. You get the reach and engagement of television, coupled with the precision targeting and analytics of digital. And because it’s served via the internet, you’re not restricted by geographical broadcast areas, which broadens your potential audience immensely.

CTV Follows a Familiar Structure

If you’re coming from a traditional TV advertising background, you’ll be glad to know that CTV follows a similar structure. There’s still a focus on creating engaging, quality content, and it’s presented in a format that’s comfortable and familiar to viewers. The main difference is the delivery mechanism and the additional layers of targeting and measurement that come with it.

Children Are the Future

An interesting aspect of connected TV is its popularity among younger generations. Kids are growing up in a world where streaming is the norm, and this is influencing viewing habits. For brands looking to reach younger demographics, connected TV advertising is a powerful tool.

OTT Advertising

Over-The-Top (OTT) advertising is a crucial component of the connected TV landscape. OTT refers to content that’s delivered directly over the internet, bypassing traditional cable or satellite TV services. OTT advertising allows brands to reach viewers on a range of devices, from smart TVs to mobiles, making it an essential part of a comprehensive CTV strategy.

Types of Connected TV Ads

Let’s touch on the different types of connected TV ads. You have in-stream video ads, which are similar to traditional TV commercials but can be targeted much more precisely. Then there are interactive ads, which allow viewers to engage directly with the ad using their remote. You also have display ads that can appear during pauses or menu navigation. Each type has its strengths, and the best mix will depend on your specific objectives and audience.

Frequently Asked Questions about CTV Advertising

Alright, let’s address some of the questions that pop up often when discussing connected TV advertising. We’ve already covered a lot of ground, but there’s always more to learn in this rapidly evolving space.

What are the advantages of advertising on Connected TV?

Connected TV advertising brings numerous benefits to the table. Here’s a quick rundown:

1. Precision targeting: With CTV, you can target audiences based on a wide range of factors, including demographic information, interests, and viewing habits. This level of granularity is something traditional TV simply can’t match.
2. Comprehensive analytics: CTV provides a wealth of data, allowing you to measure the performance of your ads in real-time and make adjustments on the fly.
3. High engagement: CTV viewers are typically highly engaged, leading to better ad recall and response rates.
4. Increased reach: CTV allows you to reach cord-cutters and younger viewers who are moving away from traditional TV.
5. Cost-effectiveness: With CTV, you only pay for the impressions you receive, making it a more cost-effective option compared to traditional TV advertising.

Why is connected TV advertising on the rise?

Connected TV advertising is on the rise due to several factors:

1. Shift in viewing habits: More and more people are embracing streaming services over traditional cable or satellite TV. This trend is especially pronounced among younger demographics.
2. Advancements in technology: The technology powering CTV continues to evolve, leading to better targeting capabilities and analytics.
3. High ROI: Brands are seeing solid returns on their CTV ad spend, which is driving more investment in this area.
4. Increased accessibility: As the technology becomes more widely available and easier to use, more advertisers are able to take advantage of the benefits CTV provides.

The bottom line? Connected TV advertising is not just a flash in the pan—it’s an exciting new frontier in digital marketing that’s here to stay. So why not join the party?

Conclusion

Well, we’ve reached the end of our deep-dive into connected TV advertising. I hope you’re walking away with a clearer understanding of what CTV is, the opportunities it offers, and how to approach it effectively. But before we part ways, let’s finish strong with a discussion on best practices for smart TV ads and how you can set yourself apart with CTV.

Best practices to follow with smart television ads

Creating effective ads for smart TVs is both an art and a science. Here are some of the key best practices to keep in mind:

1. Keep it high-quality: Given that your ads will be displayed on the big screen, ensure your creatives are of high resolution and production quality.
2. Make it relevant: Use the advanced targeting options available with CTV to tailor your ads to your audience’s interests and viewing habits.
3. Keep it concise: Brevity is the soul of wit, as they say. Aim to deliver your message clearly and succinctly to avoid losing viewer attention.
4. Include a clear call-to-action (CTA): Make sure viewers know exactly what you want them to do next, whether that’s visiting a website, downloading an app, or purchasing a product.

Setting Yourself Apart With Connected TV

The CTV landscape is becoming increasingly competitive, so it’s important to find ways to make your brand and your ads stand out. Here are a couple of strategies:

1. Leverage unique ad formats: Explore interactive ad formats that engage viewers more actively than standard video ads. Interactive ads could include clickable elements, quizzes, or even mini-games.
2. Use sequential messaging: Since CTV enables you to reach the same viewers across different devices, consider creating a narrative across your ads that evolves with each new impression.
3. Create tailored experiences: Personalization is key in the world of CTV. Make use of dynamic ad insertion to customize the content of your ads for different audience segments.

As we wrap up, remember that the landscape of CTV is rapidly evolving. Stay informed, be flexible, and keep your audience’s needs and habits at the forefront of your strategy.