Connected TV advertising, also known as OTT (over-the-top) advertising, is booming. For the first time since the onset of the cord-cutting revolution, CTV is poised to overtake
traditional TV advertising in terms of total advertising dollars spent.?
Traditional linear TV advertising is still a valuable tool for reaching massive audiences with scale and efficiency. However, more consumers are moving away from traditional cable and satellite TV subscriptions (or, in industry parlance, multichannel video distribution providers – MVPDs). As a result, the inventory pool is increasingly narrowing.?
Linear TV advertising only offers a blanket-the-market approach to TV advertising. Connected TV advertising offers a more nuanced and precise way to deploy media dollars. This maximizes return on ad spend and avoids reaching customers outside of a brand’s target audience.
Connected TV platforms – or CTV – refers to a large number of internet-enabled or “over-the-top” content delivery vehicles, including:?
- SVODs (streaming video-on-demand services) apps like Hulu, Netflix, Paramount+, Disney+, ITV X, BBC iPlayer, Max (formerly HBO Max), and Peacock
- vMVPDs (virtual multi-channel video distribution providers) like Sling and DIRECTV Stream
- FASTs (free ad support platforms) like Pluto, Roku Channel, and Amazon’s Freevee
There are several key reasons CTV is pulling market share from its linear TV counterpart.
- More and more consumers are “cutting the cord”. There’s simply fewer people watching traditional TV through cable, satellite, and free-to-air antennas around the world. Cord-cutting shows no signs of slowing as more people opt for using their smart TV’s operating system or over-the-top devices like Apple TV, Roku, and Amazon Fire TV. The available CTV inventory continues to grow daily.?
- CTV platforms offer precision-based targeting. When buying traditional TV advertising, advertisers are often forced to buy at a national or market-based level. This means that the ads will appear to everyone in a given broadcast area. For example, an 18 year old male in the city center and a 54 year old female in an outer-suburban area will both view the same ad even if neither are endemically interested or part of the target demographic. CTV platforms offer the ability to target users across myriad dimensions and can focus delivery of ads to specific audience segments. This benefits the advertiser by ensuring that each dollar spent is going to further the campaign’s key objective.?
- CTV platforms offer more meaningful metrics and measurements. Despite all the advances in technology, knowing who and how many people see a given ad is still a guessing game of sorts with traditional TV advertising. Linear TV viewership is measured by Nielsen ratings. Information is aggregated from “Nielsen households”, or people who allow their linear TV viewership to be measured.? Their viewership is expected to model viewers across various demographic segments. As with other digital media and marketing platforms, CTV ads offer impression-level measurements. These measurements show when an ad was seen and how much of an ad was watched. CTV ads provide a more accurate breakdown of any downstream KPIs including conversions from ad exposure.?
- CTV can leverage first-party audience data to help in targeting and retargeting efforts. For example, as part of an omnichannel marketing campaign a marketer or brand can leverage CTV platforms to deliver TV ads to users who visit their website or interact with ads on other digital platforms.
- The cost of entry for CTV is lower than traditional TV. It’s no secret that the cost of advertising on television is expensive. This is especially true for larger media markets with large populations. The cost of entry is often too high for many advertisers. In contrast, CTV advertising allows marketers access to high-impact mediums without breaking the bank or allocating all of their media budgets to a single channel. With more efficient costs, CTV allows for more accessible television advertising.
Has your brand tried connected TV advertising? If not, what are you waiting for? Even for the most niche audiences, CTV is a highly-impactful and effective advertising channel.?
