Remember when TV advertising was just interrupting your favorite show with cheesy commercials? Those days are fading fast. Connected TV (CTV) is revolutionizing how we consume content and how advertisers reach their audiences with TV marketing campaigns.
Connected TV refers to any television that can connect to the internet and access content beyond what is available via traditional cable providers.
This includes streaming devices like:
- Roku
- Smart TVs from Samsung or LG
- Gaming consoles like Xbox or PlayStation
What makes CTV advertising increasingly crucial is its ability to deliver targeted ads to audiences right where they are watching, whether on Hulu, YouTube, or niche streaming services.
Let’s dive into how to tap into this innovative advertising frontier to connect with viewers on their favorite streaming platforms and smart TVs.
Key Takeaways
- Connected TV advertising combines the impact of TV with digital precision, allowing you to target specific audiences on streaming devices based on demographics, interests, and behaviors.
- CTV offers real-time performance data, enabling you to optimize campaigns on the fly for maximum ROI.
- With CTV, you can reach the growing audience of cord-cutters who are moving away from traditional cable TV.
- CTV ads typically have higher completion rates due to their relevance and engaging format.
- Implementing a CTV strategy requires careful planning, from choosing the right platform to creating compelling content and continuously optimizing your campaigns.
What is Connected TV?
Connected TV (CTV) is exactly what it sounds like; televisions that connect to the internet. But it’s so much more than just smart TVs. CTV encompasses any device that allows you to stream content on your TV screen—think Roku, Amazon Fire Stick, and gaming consoles as well.
The shift towards CTV has been dramatic. In 2023, cable TV subscribers dropped to 72.2 million from 98.7 million in 2016. Why? Because 82% of American adults say streaming entertains them more than cable TV. It’s not just about cutting the cord—it’s about gaining control over what, when, and how we watch.
What is Connected TV Advertising?
So, what happens when you mix digital advertising with the engaging experience of connected TV? You get connected TV advertising. This form of digital marketing allows businesses to place video ads directly on their target audience’s smart TVs and connected devices. Imagine your ad appearing right in the middle of a popular streaming series on a viewer’s smart TV—that’s CTV advertising.
CTV advertising is unique because it combines the broad reach of traditional TV with the precision targeting of digital advertising. This means you can show your ads to specific segments of viewers based on detailed criteria like demographics, interests, and viewing habits.
It’s important to note that CTV advertising isn’t the same as OTT (Over-The-Top) advertising, though they’re often confused. While CTV specifically refers to ads shown on TV screens via internet-connected devices, OTT encompasses all streaming content, including on mobile devices and computers.
The beauty of CTV advertising lies in its flexibility. You can use traditional TV-style ads, interactive ads that viewers can engage with using their remotes, or even personalized ads tailored to the individual viewer.
Benefits of Connected TV Advertising
Connected TV advertising is a new part of any paid media toolbox. Here’s why you need to pay attention:
- Precise targeting: With CTV, you can reach specific audiences based on interests, behaviors, and locations. It’s like having a GPS for your ideal customers.
- Real-time measurement: Data is essential to guide your campaign strategy, and CTV delivers. You’ll see who watched your ad, for how long, and what they did afterward. This instant feedback lets you make educated decisions when it comes to adjustments.
- Cord-cutter reach: Cable TV is shrinking, but CTV lets you connect with viewers who’ve switched to streaming. You’re meeting your audience where they actually watch.
- High completion rates: Relevant ads get watched. CTV’s targeting means your message is more likely to resonate, keeping viewers engaged to the end.
- Agile campaigns: Unlike traditional TV, you can adjust CTV ads quickly. Spot an underperforming element? Change it immediately and see the impact.
How Does Connected TV Advertising Work?
CTV advertising might seem complex, but I’ll break down the technical process for you:
- Viewer Initiates: A viewer selects content to watch on their connected device. This could be anything from a Netflix show on a smart TV to a YouTube video on a gaming console.
- Data Transmission: The publisher (like Hulu or Roku) sends available viewer information to an ad exchange. This data might include device type, content genre, and any known viewer demographics.
- Auction Begins: An automated bidding process, known as real-time bidding (RTB), starts for this specific ad opportunity. This happens in milliseconds, before the content even begins to load.
- Information Sharing: Supply-side platforms (SSPs) provide more detailed information to potential buyers. This could include the viewer’s approximate location, the time of day, and the type of content being watched.
- Bidding War: Demand-side platforms (DSPs) with matching criteria automatically bid for the ad slot. If you’ve set up a campaign to target, say, sports fans in Chicago, your DSP will bid on this opportunity if it matches.
- Winner Selection: The highest-bidding DSP wins, and their ad is placed. If that’s your ad, it’s then served to the viewer as part of their streaming experience.
This entire process happens in less than a second, across millions of devices simultaneously. It’s lightning-fast, automated, and data-driven, ensuring that your ad reaches the most relevant audience at the right moment.
There are three main ways to buy CTV ads:
- Open auction/Real-time bidding (RTB): Prices are determined during a real-time auction.
- Private marketplace (PMP): An invite-only version of an open auction.
- Programmatic direct: Direct sales at a fixed price, bypassing the auction.
The key players in this process are:
- Demand-side platforms (DSPs): Used by advertisers to manage bids.
- Supply-side platforms (SSPs): Connect inventory to potential buyers.
- Ad exchanges: The digital marketplace where SSPs and DSPs meet.
This system ensures you’re reaching the right viewers at the right moment, every time. It’s a far cry from buying time slots and hoping for the best.
How to Plan and Execute a Connected TV Campaign
Ready to dive into CTV advertising? I’ll walk you through the process step-by-step. Here’s a quick overview of what we’ll cover:
- Developing your strategy
- Choosing the right platform
- Creating compelling ad content
- Setting your budget and bidding strategy
- Monitoring and optimizing your campaign
Let’s break each of these down so you can launch your first CTV campaign with confidence.
1. Start with a Strategy
Before you spend a dime, you need a solid strategy. Here’s what I recommend doing first:
- Define your objectives: Are you aiming for brand awareness, lead generation, or direct sales? Be specific.
- Identify your target audience: Who are you trying to reach? Get as detailed as possible about their demographics, interests, and viewing habits.
- Set clear KPIs: Decide how you’ll measure success. It could be:
- Impressions: The number of times your ad is displayed
- Completion Rate: The percentage of viewers who watch your entire ad. This is typically high for CTV ads.
- Cost Per Completed View (CPCV): The cost for each viewer who watches your entire ad.
- Brand Lift: Measures changes in brand awareness, perception, or purchase intent after viewing your ad.
- Reach and Frequency: How many unique viewers saw your ad and how often.
- Website Visits: Increase in traffic to your website after running the CTV campaign.
- Conversion Rate: The percentage of viewers who take a desired action after seeing your ad.
- Return on Ad Spend (ROAS): The revenue generated compared to your ad spend.
- Foot Traffic (for brick-and-mortar businesses): Increase in-store visits attributed to your CTV campaign.
- Align with other marketing efforts: Your CTV campaign shouldn’t exist in a vacuum. Think about how it fits with your overall marketing strategy.
The choice of platform can make or break your CTV campaign.
Here are your main options:
- Smart TV manufacturers: Think VIZIO and Samsung. These are the actual TV brands that have built-in streaming capabilities. They offer ad inventory across their native apps and sometimes partner channels.
- Streaming devices: Roku, Apple TV, and Amazon Fire are popular choices. These are external devices that connect to TVs to enable streaming. They provide ad opportunities across their platforms and partner apps.
- Video streaming services: Hulu and Peacock offer advertising options. These are the actual content providers where viewers watch shows and movies. They offer ad inventory within their content streams.
- Demand-side providers: Platforms like Madhive and MediaMath offer a broader reach. These technology platforms allow you to buy ad inventory across multiple CTV sources, and they provide broader reach and more advanced targeting options.
- Over-The-Top (OTT) aggregators: Platforms like SpotX, FreeWheel, and Magnite aggregate ad inventory from multiple streaming services and devices. They offer a single point of access to diverse CTV inventory.
Each type of platform has its strengths. Smart TVs and streaming devices offer direct access to viewers, streaming services provide contextual relevance, DSPs offer broad reach and targeting, while OTT aggregators provide efficiency in buying across multiple sources. Your choice should align with your campaign goals, target audience, and budget. Often, a mix of platforms can provide the best balance of reach and precision.
3. Create Compelling Content
CTV ads need to grab attention and engage viewers quickly. Whether you opt for a 15-second spot or a more interactive 30-second ad, the content should resonate with your audience and reinforce your brand message.
Incorporating elements like direct-response tools into the content you create, such as QR codes, can bridge the gap between viewer interest and action, driving higher engagement and measurable responses.
4. Set Your Budget and Bidding Strategy
CTV advertising can be cost-effective, but you need to be smart about your spend:
- Start with a test marketing budget: This allows you to gather data without breaking the bank.
- Choose your bidding model: Options include CPM (cost per thousand impressions), CPC (cost per click), or CPA (cost per acquisition).
- Allocate budget across platforms: If you’re using multiple platforms, divide your budget based on performance and audience reach.
- Set frequency caps: This prevents ad fatigue and ensures you’re not wasting impressions on the same viewers.
Remember, it’s not just about how much you spend, but how wisely you spend it.
5. Monitor and Optimize
The real power of digital advertising comes from its measurability. With CTV, you can track how well your ads are performing in real-time using KPI benchmarks. Use this data to tweak and refine your ads, shifting resources to the highest-performing platforms or adjusting your message to increase viewer engagement.
Use real-time data to your advantage:
- Track key metrics: Monitor impressions, completion rates, and conversions.
- Analyze viewer behavior: Look at engagement patterns and drop-off points.
- Adjust in real-time: Many platforms allow you to optimize campaigns on the fly.
- Test and learn: Try different creative versions, targeting options, or bid strategies.
- Connect online and offline data: Use attribution tools to understand the full impact of your CTV ads.
Continuous monitoring and optimization are key to turning a good CTV campaign into a great one, ensuring that you meet your strategic goals and get the best return on your investment.