CTV Campaign Basics

The acronym CTV stands for “Connected TV,” a term that itself refers to any television set that is used to stream video content over an active Internet connection. More often than not, these videos are streamed via apps that are downloaded by users to better reflect their viewing preferences.

A “smart” TV is perhaps the most obvious example of one of these devices, as they have their own built-in Internet connections and media platforms and thus require no additional equipment for streaming. Devices that plug directly into the TV that is connected to the Internet (think: the Apple TV, Roku, Chromecast or Amazon Fire Stick) would also fall under this umbrella. Gaming consoles like the Xbox and PlayStation would also qualify, as they have built-in app stores that essentially allow them to act as streaming CTV media devices along with gaming platforms.

A Connected TV advertising campaign, by association, is exactly what it sounds like: an opportunity to target relevant content channels (and audience groups) with long-form, non-skippable online advertising via these devices. The right CTV campaign is an advertiser’s best chance to reach these users, the majority of which have already left traditional cable programming behind and are unlikely to ever return. CTV advertising is also by default a way to future-proof a brand’s efforts, as recent studies indicate that CTV households are predicted to grow to an enormous 82% of ALL households by as soon as 2023.

But at the same time, Connected TV advertising will not be successful if an advertiser simply takes the methods he or she has always used and tries to transpose them onto this new platform. This piece will discuss all of the things needed to know to be successful in terms of advertising to this new generation of users.

As stated, the answer to the question “what does CTV stand for?” is “Connected Television” – a series of devices that stream content to users, not over a cable connection, but over the Internet in their homes. But what is CTV advertising and why is it important in the modern era? Because it affords advertisers certain opportunities that simply didn’t exist in previous generations.

CTV advertising offers far better targeting capabilities than traditional television advertising, for example, allowing advertisers to virtually guarantee that their budgets are going toward their most valuable customers and the ones who are most likely to convert. CTV marketing also offers an opportunity to leverage more measurable results than ever before.

Connected TV programmatic platforms allow advertisers to measure the results of their ad campaigns via both digital and traditional metrics, for example, which include important ones like video completion rates and more. To put it another way, an advertiser won’t just know who is seeing any of his or her ad campaign – an advertiser will be able to see the amount of content the user viewed and whether or not he or she took any action at the end of it.

Finally, CTV advertising allows advertisers to tap into an audience that is growing dramatically all the time – CTV meaning not only millennials but also the growing percentage of the population who do not have cable television and who do not plan on getting it anytime soon. This generation of cord-cutters is here to stay, and CTV marketing, therefore, becomes a brand’s best opportunity to adapt to that fact.

A similar concept that is equally important is OTT TV advertising, which is short for “over the top.” OTT services are streaming services that allow users to buy access to their platforms to watch television content over the Internet via a standard, closed TV system. With an OTT device, users don’t have to subscribe to traditional cable in order to watch their desired shows and programs. Popular OTT examples include services like Netflix, Disney Plus, HBO Max, Hulu and Amazon Prime.

OTT advertising is again important for advertisers because it allows an advertiser to take an ad campaign message directly to where the targeted viewers in a way that is far more targeted and effective than ever before. An example of OTT advertising (inaction) would be if a user turned on an Apple TV, opened the YouTube TV app, selected a video, and had to watch two or three commercials before and during the content actually came on. These commercials are far more relevant to the user’s own interests than anything most likely seen on traditional television.

This is because of those aforementioned targeting capabilities that allow advertisers to leverage the data already being created to provide better and more specific content than ever. Not only does a user see commercials of his or her actual interest, but advertisers get to more effectively connect with the prospects who are most likely to become paying customers in the first place – thus increasing the return on investment of their ad campaign at the exact same time.

At this point, it’s important to touch on another related concept – linear, also known as traditional, television. The linear TV definition provided by the experts at Oracle is “a traditional system in which a viewer watches a scheduled TV program at the time it’s broadcast and on its original channel.”

In simpler words, this is the familiar way of watching television that most adults grew up with – a bought bundle of TV channels from a cable, satellite, or telco company. For example, back before streaming services, a particular show would have an air date and time that the viewer had to be home in order to watch it. If not, the viewer would have to wait for the network to rerun it or have the option to record it via DVR to view it later.

As the battle between connected TV vs linear TV continues, linear TV’s reach continues to implode due to the increasingly advanced TV landscape arising. From an advertising perspective, CTV vs linear TV is also beneficial if they’re spending money on an ad running at a specific time and the viewer doesn’t see it because they weren’t home. Ultimately, the advertiser has essentially wasted his or her money. With Connected TV advertising, a viewer will see the campaign regardless of the time he or she watches a show.

Although, let’s look at CTV vs OTT. Connected TV vs OTT advertising ultimately comes down to a matter of semantics. The term CTV is used when specifically talking about those smart televisions and streaming devices that are used to deliver content to users. OTT is platform agnostic, meaning that it doesn’t actually matter which devices are included in the discussion. A streaming platform, like Netflix, would be considered an OTT service, which is then delivered to users via a CTV device, like an Apple TV. It can be helpful to think of connected TV examples in those terms.

These days, there are a wide array of connected TV advertising platforms out there all targeting users in more precise ways than ever before. According to a recent CTV study by eMarketer, approximately half of all CTV ad spend this year is going to the same three platforms: YouTube, Hulu and Roku.

But interestingly, one connected TV advertising example that isn’t a part of the three mentioned above experienced incredible gains this year: the Apple TV. Due in large part to the COVID-19 pandemic and the fact that more people are spending more time in their homes than ever before, the Apple TV actually saw the largest market share increase of all CTV devices in 2020 – to the tune of about 175% increase. Therefore, it makes a certain degree of sense that connected TV companies are turning their attention toward these types of devices. It makes sense for CTV advertising companies to focus their CTV ad spend in this direction because they can instantly target users on various platforms.

In the end, CTV is for all brands. Both content consumption on CTV platforms and CTV ad spend are increasing – and this is one trend that shows no signs of slowing down anytime soon. In fact, CTV has been the least affected by ad placement during the 2020 COVID-19 lockdowns – and total CTV ad spend is expected to reach $16 million per advertiser by the end of the year according to one study. Not only that, but by the end of next year, CTV ad spend collectively is estimated to hit an enormous $10.81 billion – most of which will go directly to CTV examples like YouTube, Roku and Hulu as outlined above.

Everyone knew that CTV and OTT advertising was the way of the future – stats like the above go a long way towards proving that this future has officially arrived.