CONNECTED TV

Connected TV Advertising

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Connected TV Advertising

Connected TV advertising is still in its infancy when compared to long-standing advertising tactics like radio spots and prime-time television ads. However, it’s the fastest growing channel within the advertising industry.

But First, WTF is Connected TV?

Before we dive into the history of Connected TV advertising, let’s first explain what is Connected TV. Over 80% of all households in the United States have a CTV. The Connected TV definition is simple. It refers to the internet-connected device that allows users to watch their favorite content. Essentially, a CTV is a smart TV, smartphone, Roku, Firestick, or any other device that provides paying customers their entertainment.

Okay, Now WTF is Connected TV Advertising?

So, what is Connected TV advertising? It has evolved over the years and now allows subscription providers to display specific ads to users during their favorite content. CTV advertising must credit its beginnings to 1995 when the Internet Protocol (IPTV) was first released. However, a few years would need to pass before CTV would begin to take off. iTunes offered the ability for users to download their favorite shows in 2005 for a nominal fee. While this was revolutionary for the time, Netflix’s release in 2007 of streaming services would begin the snowball effect.

The release of streaming did not necessarily create an interest in CTV advertising at first. Netflix never planned (and still has not allowed) advertisers to run the platform, despite having 200 million subscribers. YouTube also launched its first ads in 2007. Hulu was not far off and allowed advertisers to begin showcasing their messages in 2009. The power of CTV advertising lies in which programs allow advertisers to utilize it to its full potential. Since this marketing channel is newer, many marketers are still hesitant on inquiring what is CTV advertising. But the reality of any channel in advertising is to stay up with the trends to never fall behind or it’ll be even harder to catch up. Read on to learn more.

How Does Connected TV Advertising Work?

Connected TV advertising rose from the cord-cutting phenomenon, which would not have occurred with Over-The-Top (OTT). For those wondering, “how does Connected TV advertising work,” the CTV ads are delivered during OTT content. It’s important to remember there is a distinct difference between Connected TV vs OTT.

A Connected TV is a device that is used to access OTT content. OTT is the streamed content that plays directly over the Internet rather than through traditional cable. OTT vs CTV is not one and the same. However, like several other systems in our everyday life, the terms are often used interchangeably because they are so closely related. For example, some individuals use all-wheel drive and four-wheel drive interchangeably, but these two systems both have their unique uses and benefits.

OTT advertising is specifically used to provide content through streamed content. On the other hand, Connected TV advertising has ads that are played on the device itself (smart TV, Roku, etc). Since a CTV is used to play OTT content, it has become common for the two terms to be used to describe both types of advertising.

What's a Connected TV Ad?

While some advertisers may be weary, they shouldn’t be. These CTV ads are non-skippable, non-user-generated content, and non-short clips. When users are interested in a product they are now shown an ad for that product or something relevant to that product. CTV advertisements allow marketers to reach a wider, more targeted audience during their clients’ campaigns all while building their credibility through a TV screen.

Marketers should begin incorporating CTV advertising strategies sooner than later. By doing so, they can understand this marketing channel before the market becomes fully saturated. This is the same advice marketers received when social media marketing was on the rise. For example, the ad spend from 2014 to 2019 rose by over $10 billion. Connected TV advertising statistics are already proving to be more powerful for marketers.

Connected TV Advertising Companies in Programmatic

Linear TV is often mentioned when discussing Connected TV. Those who are wondering what is linear TV know it better as their regularly scheduled program on cable television. When comparing linear TV vs Connected TV, several differences are obvious. The first is the delivery of the content. Linear TV requires a cable subscription while CTV is an internet-connected device (like Roku or Firestick) that delivers content. Connected TV advertising companies can also provide tracking, which is unavailable with linear TV.

Addressable TV is another term that often arises when discussing CTV advertising. Technically, all CTV advertising is addressable TV advertising. Specifically, addressable TV allows marketers to run their ads on specific devices within a household. Compared to OTT advertising, ads are only run through specific entertainment, such as shows or movies.

When it comes to CTV advertising companies, each will have its values, strategies, and relationships. Connected TV advertising platforms create partnerships with various providers. This influences the audience your message can reach, which ultimately affects the results you can expect from your campaign. Connected TV advertising examples can be considered in the comparison of linear ad and CTV ad tracking and reporting based on age and gender during a specific show.

Connected TV Growth

As mentioned, Connected TV growth has sharply risen over the past several years. The CTV advertising market share grew dramatically during the global pandemic, but it was also on the rise before quarantines. In 2019, the Connected TV market share was only $6.42 billion. From 2020 through to Connected TV viewership 2021, ad spend grew to $9.03 billion. Those who analyze Connected TV statistics predict that the Connected TV advertising market size will rise to 24.76 billion by 2024 (just three years from now).

With the current state of Connected TV growth 2021, the market is set to hit $14.11 billion by the end of 2022. This rapid growth is a clear sign that this is the fastest growing digital marketing channel available in the industry today. All companies and industries can benefit from using CTV advertising. With the world turning to the convenience of streaming services by watching OTT content on CTV devices, any brand (big or small) can reach a part of its audience through this marketing channel.

Connected TV Advertising Trends

As we’ve learned, Connected TV is rapidly evolving. The latest Connected TV advertising trends have already arrived. The world is going cookieless, but marketers do not need to worry or fret. When one looks at any Connected TV examples, he or she will quickly find that CTV has never even used a single cookie to provide successful metrics.

The trend for moving toward cookieless was announced by Google at the beginning of 2020 before the pandemic began. The world’s largest search engine decided to stop supporting third-party cookies in its Chrome browser. First-party cookies may also phase out as users’ desire for more privacy becomes a large purchasing factor.

The reason Connected TV advertising does not rely on cookies is that it uses cross device technologies. These technologies do not rely solely on cookies to provide a better user experience. Simply by logging into streaming services, a user’s preferences are stored with their profiles rather than in cookies on their device. CTV advertisers can use this data to deliver the best-performing ads for a specific user.

The question is not if, but when the post-cookie world will begin. Fortunately, solutions are already being developed to ensure a smooth transition for advertisers. Unified ID 2.0 relies on cross-site targeting, which is what CTV advertising has used from the beginning. The user’s email address will log their actions and preferences rather than cookie data. Unified ID 2.0 counteracts the changes that are coming forth with the decline of third-party cookies. Rather than having to learn new technologies, marketers will have a temporary solution for moving into a cookieless world.

What's Next For Marketers Regarding Connected TV Advertising?

For marketers, now is the time to test CTV ads for their clients’ campaigns. Rather than waiting until we live in a cookieless world, marketers can take advantage of today’s technology to excel in tomorrow’s future. The only way to keep up with the ever-changing trends in digital marketing is to engage in effective testing. If marketers wait until cookies are gone and Connected advertising is even larger than it is now, they may fall behind in optimizing their campaigns and meeting client expectations.

Connected TV will not slow down anytime soon. Its exponential growth is reliant heavily on the increase in streaming services. Traditional channels (like NBC) are moving to create their own streaming platforms NBC’s Peacock). Even providers like Apple are creating their own content. All of this OTT content is eligible for CTV advertising. The more OTT content that is created in the future, the wider range a marketer can reach with CTV advertising tactics. Combined with the cross device tracking, marketers can create targeted ads that product better metrics for their clients.

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