Connected TV Ads: An Overlooked Opportunity

What is Connected TV (CTV)?

Technological advances have created a major change in the way we watch television. Connected TV refers to televisions which are able to connect to the internet and are able to stream or load digital content. There are two ways in which televisions can connect to the internet. A smart TV has an in-built connection while a standard television connects indirectly to the internet through smart devices e.g. Roku, Chromecast, gaming consoles, and internet-enabled DVD players. The internet is a universal platform because it allows availability of content from almost any location in the world.

Three Types of CTV ads

Stagnant ads, also called home screen placement ads, are typically images or short videos placed on the home screen and may feature a call to action. In-stream video ads cannot be skipped and form the second type. They are usually between 15 and 30 seconds long and are played before or during the program. The third type is interactive pre-roll ads. They are similar to in-stream video ads except that the viewer is able to click through to a landing page.

Benefits of CTV Advertising

CTV provides a more targeted and measurable form of advertising. It results in a cost-effective way of reaching the television audience. Traditional television advertising attempts to target relevant audience based on context. In comparison, CTV allows better targeting because viewers are profiled and ads can be bought in packages.

Additional benefits of CTV are the following:

• Precise audience targeting enables cost-effective advertising. For example, instead of advertising during a basketball game with the aim of reaching men between 25 and 39 years old who would buy a Ford pickup, you can specify this demographic group. When compared with personal devices, CTV captures a wider audience because people usually watch television with family and friends.

• CTV allows an ad to be tracked using data that shows the number of target users who saw the ad instead of how many times the ad loaded. An ad is considered viewable if the video actually plays.

• CTV advertising allows experimentation with split testing. Marketers can find out which ad format and call to action works best to drive audience engagement and improve ad design.

• CTV allows ads to be placed when audiences are highly engaged. This increases the chances for improving the return on investment.

• CTV ads can be run on major networks including Fox, ESPN, and NBC. Premium content publishers can also host CTV ads e.g. Amazon Fire TV, Hulu, and Vevo.

• CTV ads provide real time performance metrics. Some of the metrics are revenue on ad spend (ROAS), ad frequency, delivered impressions, video completion rate, and view-through conversions. Marketers are therefore able to discover a viewer’s path to conversion.

• The covid-19 pandemic created an absence of sports spectators during live games. This has increased sports related streaming. Opportunities for targeted advertising to sports fans are greater.

Target CTV Audience

Marketing objectives and execution plans need to be defined before CTV ad campaigns are initiated. There are three main categories used to segment a target audience. The first is demographics. This includes age, income, and location. The second is purchasing behavior. It includes the information an audience prefers and the buyer’s journey before making a purchase decision. The third is viewer interests. This includes desires, lifestyle choices, and recreation preferences.

DSP or Trading Desk

Demand side platform (DSP) is software which advertisers use to purchase video ads from a publishers’ marketplace. The DSP allows the management of advertising across several real-time bidding platforms. Advertisers are able to use viewer location and browsing behavior to target viewers who fit a specific profile. Large and well-financed companies are able to manage several DSPs simultaneously.

Trading desks centralize the purchase and optimization of media. They provide reports which help advertisers improve advertising performance metrics. Companies without generous advertising budgets or those that need to minimize time spent on managing DSPs should opt for trading desks.

Why Run CTV Ads?

CTV as a viewership performance driver needs serious consideration. Streaming services cost between $10 and $20 while the average cable bill is about $100. Paid ads help reduce the cost of internet services and viewers are expected to prefer the cheaper option. CTV ads should run all year round with seasonal curated ads for special events such as the Super Bowl and World Cup.

CTV creatives may include MP4 files and VAST tags. CTV advertising is an invaluable component of a well-rounded full channel television campaign. It also provides better viewer targeting and performance reporting. CTV targeting is more advanced than traditional television although many of the traditional targeting tactics are still applicable to CTV targeting e.g. geolocation. It is reasonable to expect that CTV ads will soon become the preferred method of television advertising.