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Connected TV Advertising: The Go-To Advertising Channel

CTV

Connected TV (CTV) is the latest buzzword in the industry. It is quite literally taking the online advertising world by storm, with businesses quickly noticing its full potential. Indeed, CTV advertising is now almost at the forefront of effective marketing campaigns. It could be just what you needed to develop a memorable advertising strategy.

As of 2020, more than 40% of adults are CTV consumers. It is no surprise, then, that marketers are looking for innovative ways to leverage the channel to raise brand awareness and promote their products or services. Plus, the latest research shows that 60% of digital buyers will move more of their traditional TV budgets to CTV in 2021.

So, you know where you can reach your audience! Connected TV advertising can get your ads on the big screen, introduce your brand to cord-cutters, and bring new customers to your business. These are just some of the reasons why CTV advertising is growing in adoption!

The increasing use of internet-powered television is certainly changing the advertising landscape. And CTV is at the forefront of this change.

But, what is connected TV advertising? How does it work? We will tell you that and more in our article!

What Is Connected TV Advertising?

Before we talk about CTV advertising and why you should leverage this channel, you might be wondering what connected TV is in the first place.

Connected television, i.e. CTV, refers to television that is connected to the internet and is able to host and deliver video content. This encompasses devices that can connect to the TV and internet as well. Modern devices with these capabilities include Smart TVs, game consoles, and even streaming boxes like Roku.

Therefore, connected TV advertising refers to ads that can be delivered to any TV or device that is connected to the internet and is able to access video streaming content. This includes ads bought programmatically and placed on consoles, computers, mobile phones, gaming devices, etc.

Connected TV advertising allows you to deliver your ads to premium content providers, which effectively helps you reach millions of cord-cutting households.

And that’s the connected TV advertising definition!

Why Advertise on Connected TV

In today’s marketing world, CTV ads are one of the most effective ways to reach your audience. They are more targeted, budget-friendly, and on-trend than linear TV advertisements. After all, with traditional TV ads, you can’t deliver your content to specific customers — your ads reach anyone who is watching a particular channel at any given time.

On the other hand, CTV enables you to control and know exactly the customer base that is watching your ads. This means that your ads will be shown to people who have expressed some kind of interest towards products or services you offer.

But one of the biggest reasons why you should advertise on connected TV is obvious — to reach more than 40 million Americans watching TV via a streaming device.

Here are other reasons why your brand should realize that connected TV and advertising are the future of the industry.

Budget-Friendly

It’s safe to say that smart television won’t be operating without online ads as the focus of the digital world has shifted towards television. This is good news for advertisers. Namely, they will be able to save up on an impression cost, making connected TV advertising cost-effective.

CTV advertising is a good choice because of precise targeting. Instead of looking for slots during which you can play your ads in hope of reaching millennials who like designer bags, you can specifically target this group through CTV. So, your advertising budget will be spent on your desired target audience.

Additionally, there is a higher chance that more than one potential customer will see your ad on a connected TV because, as you know, people tend to watch TV with family or friends.

Specific Targeting

What is the benefit that encourages marketers to turn towards CTV? Targeting! It doesn’t get as specific as it does on CTV.

In order to use smart television or other internet-connected devices, users need to log in via their Facebook, Google, or some other accounts. And this is where all information advertisers need to serve their ads to the right people are stored. Once customers log in to their accounts, the technology behind connected TV advertising will use third-party data to gather information such as geolocation, interests, online behavior, device type, language, and other.

Precise and specific audience segmentation is helpful for brands in that it enables them to deliver their ads to brand-receptive audiences. This brings more value to the brand.

Better Ad Quality

Everyone is racing to provide the best user experience nowadays. You don’t want to bombard your potential customers with too many ads that aren’t even relevant to them. That is why you should consider connected TV advertising.

In other words, CTV supports the transmission of targeted, personalized, high-quality ads in fullscreen. Needless to say, better ad quality improves brand exposure and promotes brand loyalty.

Variety of Ad Formats

With connected TV advertising comes a variety of ad formats. You can experiment with all kinds of video ads to determine which one drives the highest consumer engagement and helps you achieve your marketing objectives. Analyze the performance of your ads on connected TV and you will know which ad format has the highest chance of catching the attention of your audience.

We now know the basics of CTV advertising. And something tells us you’re probably wondering how connected TV video advertising works. Let’s find out!

How Does Connected TV Advertising Work?

With connected TV advertising, your ad buys won’t depend on air times or channels. Instead, they will be more targeted, delivered to a specific viewer watching a program. The advantage here is quite obvious — you don’t have to guess which shows your targeted audiences are watching and at what time. CTV advertising collects all data, enabling you to create a target audience based on their activities while watching this form of television.

So, how does connected TV advertising work? Well, the process goes like this:

  1. Viewers stream online content to their connected TVs (e.g. Smart TV) or connected TV devices (e.g. Roku).
  2. This creates an ad slot that needs to be filled with the appropriate content.
  3. An ad spot is purchased if the viewer matches your desired audience.
  4. The ad is then shown in fullscreen to the customer.

Having the ability to track and deliver ads to your targeted audience using CTV will certainly help you achieve your marketing goals, including increasing sales.

Connected TV Advertising Market Is Growing

According to IAB, OTT video advertising revenues are increasing around the world. In fact, they are expected to reach $80 million by 2022. When it comes to CTV, eMarketer calls it “one of the fastest-growing channels in digital advertising.” In fact, they estimated that CTV investments in the USA grew by 40.6%. Not only that, but they also stated that CTV ad spending will reach more than $24 billion by the end of 2024.

Here are other connected TV advertising statistics you need to be aware of:

  • The connected TV advertising market size is up to 204.1 million viewers, with the figure expected to grow by 2022.
  • Ad-supported video-on-demand app usage was up 74% last year.
  • CTV ad impressions increased by 55% in the third quarter of 2020.

Having said that, connected TV advertising is set to become the go-to advertising channel for brands around the world!

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