What Is Connected TV?

by | Jul 1, 2019 | Digital 101

Last month, we went over the broad strokes of Advanced TV, which is an umbrella term for new ways to advertise on television using programmatic technology. 

Underneath the Advanced TV umbrella is another umbrella term: Connected TV (CTV). Distilled down to its simplest definition, CTV refers to televisions that connect to the internet to deliver content. 

“Connect to the internet” can mean a lot of things, which is what makes Connected TV an umbrella term (think Smart TVs, Rokus, video game consoles and more).

CTV combines the power of programmatic targeting and analytics with the reach and inventory quality of traditional television. It’s a pretty big deal, and every advertiser needs to understand how it works and where the technology is headed.

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How does Connected TV work?

Traditional TV advertising offers a blanket approach by hitting many households across the country at once. Connected TV on the other hand, allows you to pick the people you’d like to reach using programmatic technology.

This capability is made possible by over-the-top (OTT) devices, which the Interactive Advertising Bureau defines as technology that “connects to a TV (or functionality within the TV itself) to facilitate the delivery of internet-based video content.” 

In other words, Smart TVs, Rokus and video game consoles. The stuff we use to stream Netflix and replace our cable and satellite subscriptions.

Which hits on the core differentiator of CTV among other channels: it’s TV advertising that reaches “cord-cutters” (people who decide to cancel their cable or satellite subscriptions). On top of that is the targeting, analytics and data-driven approach programmatic advertising provides. Let’s dive a little deeper.

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What do Connected TV ads look like?

Say you want to try out that show your coworkers can’t stop talking about. You pull up Hulu on your Roku and fire it up. Any commercial shown during the breaks in the show is Connected TV inventory. 

Most of these ads are fairly similar to what you might see in traditional linear TV, but the creative opportunities CTV brings to the table are just beginning to be explored. A few big changes CTV brings to creative are:

Length

CTV ads break the mold of traditional fifteen and thirty second spots and can be anywhere from six seconds to a minute and a half or more.  

Interactivity

From overlaid buttons to image carousels and more, CTV ads give your audience the opportunity to engage directly. 

Personalization

CTV’s programmatic tech allows you tailor your creative message to the specific audience you’re looking to reach.

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What is unique about Connected TV?

Measurability

CTV is the most measurable category of Advanced TV,  including standard conversion tracking as well as cross-screen, cross-device measurement with fully integrated retargeting capabilities. 

Alongside newer digital metrics, CTV is also measured on traditional metrics like gross rating point.

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Newbie Note

Historically, gross rating point (GRP), which is an estimate of audience reach based on age and gender demographics, has been the gold standard of TV measurement. Modern digital advertisers need more than just GRP because the volume of potential audiences is always shifting with programmatic Advanced TV. Because of this, it makes more sense to measure and track  impressions.

Its measurability allows CTV to fit right into cross-channel campaigns. When combined with technology like LumenAd, you can see the performance of CTV ads alongside display, search and whatever else. 

Completion Rate

CTV audiences are captive audiences, which means they’re committed to the content they’re consuming and will stick around for your ads.

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In fact, according to Comscore and Nielsen, CTV viewers complete 98% of the ads they’re served. 

This is much higher than the completion rates of other devices like desktop (72%), mobile (74%) and tablet (80%), according to the Interactive Advertising Bureau’s report on Q1 of 2018.

Personalization & Targeting

The targeting capabilities of CTV is a huge topic we’ll have to save for a deep dive post, but the gist is that you can use first- and third-party data just like other digital strategies. 

If you’re a car dealership, you can target people researching new cars in your area. If you’re a furniture retailer looking to target newlyweds that just moved to a new house, you can do it. It’s an audience-first way of thinking about buying television ads, rather than the traditional show- and network-first way of thinking.

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Why is Connected TV a big deal now?

Recently, CTV has hit a tipping point for available inventory. EMarketer reports that 57.2% (up from 55.5% in 2017) of the US population will be on CTV in 2019. Not only that, but these viewers are projected to spend more time consuming CTV content.

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Put another way, CTV supply is starting to catch up with demand, making it more freely available for everyone to use. 

This increase inventory is directly related to the increase of “cord-cutters” (and now, even “cord-nevers”). Just thinking anecdotally will help you get an idea of the potential CTV has at this moment in time: how many people do you know that have ditched their cable or satellite? Have any of those people stopped watching TV? Our guess is probably not, which means they’re watching Connected TV.

But we don’t have to think anecdotally. We have data.

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of american households own a Smart TV.

Source: eMarketer

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People became cordcutters in Q1 2019

Source: Variety

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US adults use OTT Devices

Source: comScore and Nielsen

With all it has going for it, CTV’s future is bright. If you’d like to start leveraging CTV in your campaigns, schedule a digital media consultation and we’ll explore how best you can leverage it. Subscribe below for future deep-dives into CTV and other digital channels.

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