connected tv advertising

What is Connected TV advertising, or CTV? Chances are, you’re already using it in your home and office. Any smart TV, video game console, or TV connected to a device, like an Apple TV or an Amazon Firestick, is Connected TV. With CTV, audiences are encouraged to do the same operations as a smartphone but on a television, like watching YouTube videos, listening to music on Spotify, and surfing the web. You’re probably starting to connect the dots if you’re programmatically minded – those websites have ads, surely the CTV versions must as well, right? Yes, they do!

Benefits of Connected TV Advertising

While we already made the TV-as-a-smartphone reference earlier, it’s important to note that approach is precisely how marketers should look at CTV with the added benefits of television marketing. Programmatic buying for CTV is based on purchasing advertising inventory that is placed on media companies’ platforms (streaming services and ad inventory). Compared to direct media buying, programmatic CTV is time-saving, which is its primary benefit.

Precise Targeting: Brands can reach highly targeted, active audiences based on various interests, personality traits, and intentions.

Measurement: Clicks are not great indicators of success for CTV campaign effectiveness. That said, CTV’s primary focus is cost per completed view (CPCV), video click rate (VCR), or CPM. By optimizing for these metrics, advertisers are able to keep costs down while reaching as many viewers as possible. For this reason, CTV shines in awareness campaigns but is equally actionable elsewhere in the sales funnel.

Multi-Device Targeting: Due to the large variety of connected devices in homes, CTV campaigns hugely benefit advertisers who want to push ads across multiple device formats. 90% of people who are watching TV are also using their phones. Imagine being able to target one person with two devices? You can effectively doubly target them with the same ad to reinforce your message.

The Rise of CTV

Last year, 76% of video marketers across all industry verticals considered CTV advertising to be a requirement for their media plans. CTV allows marketers to take advantage of a premium advertising environment while remaining highly cost-effective. 

Just how premium is CTV inventory? CTV viewers have an 88% video completion rate and a 3.4% engagement rate, which are 1.1 and 10.3 times higher than non-interactive formats. CTV users are highly interested individuals who are ready, willing, and able to engage with your content from the comfort of their homes. 

Connected TV has become a hugely popular marketing tool for CPG, QSR, automotive, and independent agency clients. Products that have, or need, an omnichannel approach are poised to benefit the most from CTV as it connects viewers to products across ages, demographics, and interests. 

Challenges and Considerations for Advertisers

CTV is a wonderful tool for marketers but it’s important to acknowledge some of the current challenges facing the channel as well. As CTV popularity grows, expert marketers seek better ways to measure their CTV investments across marketing platforms and publishers. Other marketers have called out that managing CTV ads, their frequency, and inventory is another challenge. However, the outlook toward both of these concerns is largely optimistic as CTV programmatic investments gain more traction, as will the tools to support, measure, and optimize them. 

Looking to the future, as CTV ad spend increases, there will likely be a more competitive inventory landscape for advertisers. Nearly 40,000 people continue to cut their cable in favor of more cost-effective ways to access media and it’s more important than ever for brands to be able to spring forward against competitors to get their message across. It’s important to be aware of the challenges facing advertisers with CTV but it’s a great time to be optimistic about the channel’s future since it provides another powerful and innocuous opportunity to reach customers.