What is Connected TV?
The Connected TV definition includes any device that can receive television programming (or streamed video content) that is also connected to the Internet.
Connected TV (CTV) has been available for more than a decade; however, recently, Connected TV advertising has expanded dramatically. Broadcast and cable television always had the reach to advertise to a very wide demographic, which gives television advertising a sense of prestige. Yet, standard television advertising is expensive. This often makes it difficult to justify the advertising spend based on the return on investment (ROI).
With Connected TV, the programming dynamic flipped on itself. Streaming content on CTV is delivered based on audience demand. No longer is an audience member required to watch a program on a schedule. The programming is made available on demand. This means when streaming content through a CTV device, television advertising could be tracked to individuals’ usage patterns and measured more effectively.
There are many ways to view content on a Connected TV. CTV programming can be viewed on smart TVs such as Apple TV. Roku, Amazon Firesticks, Chromecast, SlingTV, and other systems that are used to access streaming services are part of the CTV universe too. CTV players also include gaming consoles such as PlayStation or Xbox.
What is CTV from an Advertiser’s perspective?
Having an Internet connection and the ability to display streamed video on a connected device qualifies under the CTV definition. Many types of devices can place ads to run along with the streamed video content. These ads can be pre-roll before the content starts and during the content as mid-roll advertisements.
An interesting phenomenon found by researchers is that viewers are more willing to sit through the video advertisements while streaming television content, so they can continue to watch the content on a CTV device. There is less tendency for channel surfing, especially if a viewer is binge-watching a streamed television series.
CTV advertising is bought and sold using programmatic means in real-time through an automated bidding process. Programmatic buying gives Advertisers more control, better target market optimization, price efficiency, improved budgeting, and extensive reporting of key performance metrics.
Television advertising is beneficial for an Advertiser due to increased credibility through the association with national shows and popular television series. CTV advertising adds the ability to target a market segment more directly.
Connected TV Ads
Connected TV advertising is more cost-effective than traditional broadcast television and cable television advertising because there is much more information available about the audience. Target marketing is easier with programmatic advertising buys on CTV.
The journey of Connected TV ads starts with understanding the target audience and the demographics of the CTV viewers to try to match the advertising campaign with the best alignment of viewers possible. CTV tracking gives Advertisers information about the audience’s behaviors, demographics, and online activity.
The advantages of this Connected TV ad experience for an Advertiser/brand and the users make Connected TV advertising very effective for Advertisers who target millennials. Millennials are much less likely to watch broadcast or cable television programming. Instead, they are found in concentrated amounts on Hulu, Amazon, or HBO. They watch a lot of content on YouTube. The majority of millennials are living in a CTV-only household and do not use any other pay-TV service.
Although, Advertisers have to be aware that many CTV/OTT platforms have different requirements with Connected TV ads. And certain content is not available through CTV yet, such as local news, major sports events, and prime-time television shows that are found only on broadcast and cable networks.
Moreover, ads that are not targeted to the audience of CTV viewers are counter-productive. The whole point of marketing efforts on CTV is that the ads need to be relevant to the viewers. Ads that are relevant are seen as less annoying to the audience for CTV programming.
What is CTV advertising effectiveness over traditional broadcast models?
When considering the question of what is Connected TV advertising in comparison to broadcast television advertising, the key concern is relevancy. Connected TV marketing that seamlessly integrates with the programming demonstrates its usefulness.
The Connected TV advertising definition can best be understood by making a direct link with the audience’s interests. For example, if a series on Hulu has a younger demographic, it is a waste of advertising money on an effort to place ads that target an older demographic.
In traditional broadcast and cable system advertising, the reach is so broad that often the advertising dollars are wasted presenting a message to such a wide viewership that is so poorly targeted.
An internet connected device, such as Roku, has a distinct advantage of being able to deliver streamed advertising content through something called over-the-top (OTT) services. This OTT streaming content is displayed on the CTV devices mentioned above.
Data collection is playing an expanding role for digital advertising companies. There is a multidirectional data flow when comparing CTV vs OTT. A treasure trove of information about viewership and audience patterns is made available when comparing the two. And when thinking about Connected TV vs. smart TV, there is no difference. A smart TV just comes with all the OTT platforms already installed.
When thinking of Connected TV vs linear TV, there are major differences. Linear TV is one-to-many broadcasting, or typically a very expensive branding play that cannot collect user data. While CTV advertising companies are able to track and target an Advertiser’s distinct audience at a cost-effective price-point.
Connected TV Examples + OTT Examples
Below is a list of Connected TV companies and OTT companies that OTT / Connected TV advertising campaigns can be run on.
Connected TV Companies
- Apple TV/Apple TV 4K
- Google Chromecast
- Amazon Fire
- Blu-ray players with their own Internet connections and app stores
- Gaming consoles, such as PlayStation 5 and the Microsoft Xbox One
It is vital to distinguish the differences between Connected TV advertising companies (or Connected TV advertising platforms) and OTT advertising companies. This emerging field necessitates that an Advertiser works with an agency that does the behind the scene work for them. The agency should have the best interest in their partner and explain their work to the fullest, while showing a strong track record of successful CTV advertising examples.
Connected TV ad examples include any streaming advertising such as a digital ad, which is delivered programmatically. These digital ads are in a non-clickable, non-skippable format.
Connected TV examples also include streaming content delivered through gaming consoles. An obvious Connected TV advertising example, which is appropriate for a gaming console, is an advertisement for the release of an upcoming video game. Naturally, gamers will have an enhanced interest in the new releases of video games.
Here is an overview of the benefits of CTV advertising and some interesting, current statistics.
Connected TV statistics show that CTV ad impressions were up 55% in the third quarter of 2020, so audience-based buying will continue to be the norm in the future.
Connected TV Stocks
Connected TV advertising stocks include The Trade Desk (TDD), Roku (ROKU), Google (GOOGL) and Alphabet (GOOG). These are some to watch if you’re investing in CTV advertising this year.
Connected TV Growth
In 2020, the US Connected TV ad spending totaled around $8.11 billion, according to eMarketer, and that number is expected to continue to grow to around $11.36 billion by the end of 2021. Even better, by 2024, it’s projected to grow even higher to around $18.29. That is over double the spend in 2020, showing how quickly households are converting to CTV and how fast advertising is changing in this field.
Connected TV Demographics
Connected TV demographics include people who have used traditional services in the past (cord-cutters) and those who have never used traditional services (cord-nevers). These two groups make up the primary audience types that advertisers look to reach. Usually, the first group is made up of older individuals, while the second group is younger and more familiar with internet streaming on the whole.
The overall Connected TV advertising spend depends on the specific companies working together. The Connected TV advertising market size is up to 204.1 million viewers and growing by 2022, so reaching the total number of people that you want will depend on the amount you want to spend. Usually, Connected TV ad spend starts at a minimum level based on bidding.
Connected TV Market Share
YouTube’s share of the CTV market is expected to grow from 18.5% to 20%. It believes that its ad revenue from the CTV market will double within the next two years. Roku and The Trade Desk are proposed as some of the best bets in terms of stocks with the potential for great growth over the next few years, but others mentioned here are also expected to see a rise in stock value.
Connected TV Trends 2021
Connected TV trends 2021 can come to expect new tactics for reaching buyers, such as associating with specific premium channels to reach larger audiences. Advertisers are expected to purchase CTV inventory to reach a greater portion of the population.
Some additional premium network leaders in OTT / Connected TV Channels include Hulu, HBO, Apple TV+, and Amazon Prime.