CTV Advertising: Benefits of Connected TV Advertising & How it Works
As the TV industry shifts more to connected tv so does the advertising. CTV Advertising has grown at a fast pace from the more traditional linear tv advertising. Here we discuss the benefits of connected tv, how it works, and why CTV advertising is a growing trend among households.
What is Connected TV
Connected TVs are televisions that use external devices or internal hardware to stream Over-the-Top (OTT) content. The first in-home television set was purchased at the 1939 World’s Fair, and internet service was first made available to consumer homes in 1995. It wasn’t, however, until the 2010s that the two were combined at scale in the form of Connected TV (CTV).
Connected TV (CTV) & Over-The-Top (OTT)
OTT is content viewed via internet connection rather than traditional antenna, cable, or satellite connections. Connected TVs can be televisions that leverage internet-connected gaming consoles or hdmi plug-ins such as an Xbox, Roku, or Google Chromecast to display streaming content. In recent years, however, the most dominant form of CTV has become the Smart TV with its own built-in internet connection and operating system for downloading apps and streaming video content.
CTV vs OTT vs Linear TV
CTV and OTT are often used interchangeably, and while they are highly correlated, they aren’t synonymous. Connected TVs can be used for viewing traditional linear content and OTT content can be viewed on other devices. With that said, the two complement each other spectacularly when paired together, allowing consumers to view a wide variety of both linear and on-demand content in large format.
OTT video content now generates similar views to traditional cable and broadcast programming, and the average household has more than four streaming services. With the proliferation of streaming video-on-demand (VOD) services and the emergence of linear free ad-supported TV (FAST) platforms like Pluto TV, it’s not uncommon for households to have 10-20 different apps available on their Connected TV.
With the landscape evolving at an accelerated pace, it’s important to understand the implications to television advertising.
Linear TV Advertising
Traditional linear television sets a programming schedule and fills commercial breaks with advertisements of predetermined lengths. Targeting is little more than using high-level demographics such as age, gender, race, geography, etc. to buy a commercial placement during a show (or on a channel) that has viewer demographics which align with an advertiser’s target audience.
If that sounds vague and difficult to forecast, imagine how complicated it can be to confidently analyze and attribute conversions to the ads. Advertisers are able to get viewership numbers, but there’s no connection between the offline ad view and future online, or in-store, purchase. Sure, brands can utilize QR codes, vanity URLs, and “How did you hear about us” surveys, but that’s asking a lot of customers who are more likely to simply follow-up with a Google search.
On the other hand, Connected TV advertising offers greater targeting and attribution possibilities. CTV content is internet based and each VOD or FAST streaming content provider has a digital profile of customers. This allows for the use of zero, first, and third party data to provide a much richer set of targets to potential advertisers. Connected TV also creates opportunities for personalization.
Unlike traditional linear television, CTV advertising can be dynamic with ads curated to the subscriber rather than the show or channel. This lets advertisers know they are reaching targets rather than hoping they are reaching targets. In addition, CTV ads are not entirely skippable like with traditional linear television programming that can be recorded or paused and then fast forwarded. Advertisers have a captive, targeted audience resulting in greater view-through and more optimized media buys.
But wait, there’s more! OTT content on Connected TVs is internet based just like the rest of the digital purchase funnels that brands architect. It’s now possible to connect television advertising to other online engagement through the capture of IP addresses, device IDs, or other identifiers. If someone sees a targeted ad while streaming on a Connected TV and then visits the brand’s website from the same IP address, device, profile, etc, the two behaviors can be connected — allowing advertisers to more accurately attribute conversions to CTV advertising.
As companies like Apple and Google continue to lead the charge for greater consumer privacy, the use of these attribution signals may shift, but there are still more options available for advertising within OTT content on Connected TVs than in traditional linear television slots.
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Channel setup takes a few minutes and accommodates a wide variety of video input sources. Content can easily be scheduled and distributed for CTV and OTT content to sites, social media, and other platforms. Channel Monetization is as simple as dropping ad segments into a schedule and sourcing video content. Revenue streams can be elevated to the next level with TVU Channel Plus. TVU Channel Plus utilizes TVU Networks’ partners and resources to sell and insert ads into available programming slots.
Growth Trend in CTV Advertising
Connected TV is growing in popularity as more households engage in cord-cutting and new, flexible content sources continue to emerge. Targeted CTV advertising is now a billion dollar industry with a seemingly long growth runway in its future as brands look to capitalize on younger, highly-captivated audiences who have more control over what they consume than any consumer has ever had.
This shift in video consumption — partnered with the significantly reduced risk and lowered barriers to entry afforded to video entrepreneurs by solutions like TVU Channel and TVU Channel Plus — presents a great opportunity for video content creators and distributors to build, sustain, or sure-up programming and revenue streams in this new, performance-channel landscape.