What Is CTV Advertising and How Does It Work?

TV isn't what it used to be. With streaming giants like Netflix, HBO Max, Prime TV, Apple TV+, and Disney+ taking over, viewers now have the power to watch whatever, whenever, and wherever they want—for a fraction of the cost of traditional broadband TV.
An impressive 85% of U.S. households have jumped on the streaming bandwagon, possessing at least one video streaming service subscription. And the numbers are skyrocketing. A staggering 93% of Americans express intentions to expand their streaming options or modify their existing plans.
At the same time, the digital advertising landscape continues to evolve. One term has been making waves: Connected TV (CTV) advertising. With the rise of CTV platforms and their increasing popularity among viewers, advertisers are recognizing the immense potential of targeting audiences through this medium. In this blog post, we will delve into the world of CTV advertising, exploring its key features, benefits, and strategies that can set you apart from the competition.
In this deep-dive into CTV advertising, we’ll explore:
1. What is Connected TV (CTV)?
- Examples of CTV devices
- Difference between CTV and OTT
- Connected TV audiences
2. What is Connected TV Advertising?
- How does CTV advertising work?
- How to buy CTV advertising
- CTV for local advertisers
- Does CTV advertising work?
3. Advantages of Connected TV Advertising
- Reach wider audiences with CTV advertising
- Precise targeting with CTV
- Connected TV location targeting
- High video completion rates with CTV
- Real-time CTV ad optimization
- Detailed measurement and accurate attribution
4. How to start CTV advertising
- CTV campaign measurement
1. What is Connected TV (CTV)?
CTV is a digital revolution that has transformed the way we consume video content. Whether at home or on the go, audiences now have various ways to stream their favorite content. No longer bound by cable subscriptions, viewers can indulge in a vast array of live and pre-recorded digital content, spanning from TV shows to blockbuster movies, from breaking news to exhilarating sports events, and beyond.
Connected TV (CTV) refers to Internet-connected devices such as smart TVs, gaming consoles and streaming devices that allow viewers to stream videos, music, and browse the web. All connected TVs enable audiences to use applications such as Netflix or Prime Video to stream content.
1. Examples of CTV devices
Let's explore the devices that bring this digital revolution to life:
- Smart TVs: Experience seamless connectivity with Internet-enabled televisions. Leading brands like LG, Samsung, Sony, and Vizio offer built-in media platforms, eliminating the need for additional devices to stream your favorite shows and movies.
- Connected devices/Sticks/Dongles: Unlock the potential of any TV with these compact marvels. Plug them directly into your television and connect to the Internet, empowering you with access to a wide range of apps and video streaming. From Roku and Google Chromecast to Amazon Fire TV Stick and Apple TV, these devices transcend the boundaries of a smart TV.
- Gaming Consoles: Immerse yourself in a world where gaming and streaming converge. Popular consoles such as Playstation, Xbox and Nintendo Switch not only cater to gaming enthusiasts but also offer built-in app stores, enabling seamless streaming of video content to your device.
2. Difference between CTV and OTT
While the term STV is often used interchangeably with over-the-top (OTT) TV, it is important to note the subtle distinction between them. While OTT refers to the consumption of streamed content via the Internet no matter the device (be it via a gaming console or smart TV), CTV only refers to viewing that takes place on a smart TV set.
3. Connected TV audiences
Household-level devices dominate the streaming landscape, with the likes of gaming consoles and smart TVs accounting for more than 80% of streaming TV viewership. The CTV audience encompasses both cord-cutters who have bid farewell to traditional cable television and loyal broadcast TV viewers.
This audience is continuously expanding, driven by the ever-growing popularity of streaming content. As a result, advertisers have a golden opportunity to tap into this thriving market by leveraging video advertising on an impressive array of devices.
2. What is Connected TV Advertising?
In the captivating world of Connected TV (CTV) advertising, your brand takes center stage in the midst of viewers' favorite movies, binge-worthy TV shows, and captivating video content. Seamlessly delivered through streaming services on smart TVs or connected devices, CTV offers a powerful platform to engage and captivate your target audience.
With CTV, your brand can seamlessly integrate into the diverse array of devices and platforms viewers use, from smart TVs to smartphones, tablets to gaming consoles. Picture your brand's message streaming seamlessly across smart TVs, computers, mobile devices and gaming consoles.
CTV brings your brand to life during viewers' streaming experiences. From interactive ads to targeted campaigns, CTV advertising allows you to connect with specific audiences while they enjoy their favorite content on streaming platforms and digital channels. As traditional cable viewership declines and cord-cutters embrace streaming services, CTV advertising emerges as a transformative solution to reach and engage your audience. Embrace the shift in content consumption and embark on a new advertising journey tailored to the evolving habits and preferences of modern viewers!
3. Advantages of Connected TV Advertising
The benefits of CTV advertising are undeniable. Unleash the power of connected TV (CTV) advertising to connect with your target audience exactly where they consume content. From precise targeting to detailed measurement and in-flight optimization, CTV offers unparalleled opportunities for brands to expand their brand reach beyond traditional channels such as in-store or online. Tap into the vast potential of streaming platforms by reaching audiences where they are already consuming content and achieve remarkable results.
1. Reach wider audiences with CTV advertising
In the age of abundant data, diverse content sources, and numerous streaming options, traditional advertisers are grappling with the challenge of declining viewership.
Expand your brand's horizons and captivate wider audiences through the power of CTV advertising. With CTV advertising, you can extend your brand's reach to those who no longer have cable TV and those who prefer streaming for their entertainment needs. Brands can make their mark during premium TV shows, continuous video content on news apps, and livestreams on popular gaming platforms. This expansive reach opens doors to new possibilities and allows you to connect with diverse audiences in meaningful ways.
It empowers you to guide customers along their buying journey with impactful calls to action (CTAs). Seamlessly blend shopping experiences with entertainment, enabling viewers to explore and purchase featured products without any disruption to their enjoyment.
2. Precise targeting with CTV
CTV empowers you to go beyond broad demographics and tap into the granular details that truly define your target audience. By segmenting viewers based on education level, income, personal interests, and consumer behaviors, you can craft laser-focused campaigns that resonate with your ideal customers.
Whether it's retargeting website visitors or expanding your reach with lookalike targeting, CTV opens up a world of possibilities for advertisers enabling them to reach the right audience with precision.
3. Connected TV location targeting
CTV's digital prowess takes it a step further with hyper-localized advertising, enabling advertisers to hone in on specific locations with geolocation targeting. By leveraging viewers' IP addresses, advertisers can deliver customized messages to specific geographic regions, ensuring ads are not only relevant but also highly impactful.
Imagine reaching potential clients in their own backyard and addressing their specific needs and preferences. This localized approach not only enhances campaign performance but also establishes a stronger connection with your audience.
4. High video completion rates with CTV
CTV ads have a secret weapon for captivating viewers: automatic content recognition (ACR) technology. With ACR, advertisers can unlock real-time data on viewer engagement, giving them the power to fine-tune their campaigns and maximize their impact. These optimized ads are even more engaging meaning viewers can't help but stay tuned in, leading to higher completion rates and a boost in overall campaign effectiveness.
5. Real-time CTV ad optimization
Say goodbye to the limitations of linear TV advertising: with CTV ads, you have the power to modify and optimize your campaigns in real-time. No more waiting for the next airing or crossing your fingers that your message hits the mark. With CTV, advertisers can leverage real-time data to make informed decisions and fine-tune their ads on the go. This level of flexibility ensures that every precious marketing investment is spent efficiently, driving better outcomes and maximizing your return on ad spend (ROAS).
6. Detailed measurement and accurate attribution
With CTV, you can dive deep into campaign performance and track conversions with unparalleled accuracy. Advertisers gain valuable insights by monitoring website visits, purchases, and even foot traffic to physical locations. This data-driven approach empowers advertisers to make informed decisions and optimize their marketing strategies. Say goodbye to guesswork and hello to a new era of targeted and effective advertising. Thanks to CTV advertising, you have the power to unlock the full potential of your campaigns and drive remarkable results.
Now that you have a comprehensive understanding of the benefits of CTV advertising, the question arises: How can you tap into this ad space?
4. How to start CTV advertising
With the right approach, planning and executing CTV campaigns can be a seamless process. Begin by establishing a clear strategy that aligns your brand's goals and target audience with your overall marketing objectives.
Next, choose your CTV advertising platform wisely—options are plentiful, from smart TV manufacturers to streaming sticks and video streaming services. Or, opt for streamlined CTV management with platforms like Vibe, offering an efficient solution for your advertising needs.
Once the platform is chosen, it's time to craft compelling CTV ads that resonate with your audience. Consider the optimal ad format, such as 15 or 30-second spots, or explore interactive elements like QR codes to enhance engagement.
Execute your campaign by defining your target audience and leveraging data sources, be it first-party or third-party data. Laser-target your ads for precise engagement. Launch your CTV ads through your chosen platform and closely monitor performance.
Finally, here's the game-changer: CTV offers advanced capabilities. Think location attribution, site attribution, conversions, sales lifts (online and offline), and foot traffic analysis. Maximize your campaign's punch with real-time optimization tools, making data-driven adjustments on the go.
By following these steps and utilizing the power of platforms like Vibe, you can master the world of CTV advertising, deliver successful campaigns for your brand and optimize your return on marketing investment (ROMI).
4. CTV campaign measurement
CTV advertising delivers optimized prices and strategic ad placements through automated systems. At the heart of this success is programmatic pricing, leveraging vital metrics like video completion rates (VCR) and cost per completed view (CPCV). With high ad completion rates and limited ad skipping, CTV ensures your message gets seen.
But there's more to CTV than meets the eye. Elevate your brand impact by tracking brand reach, audience reach, and brand uplift—measuring perception and preference like never before.
Feeling inspired to kickstart your CTV advertising journey? Don't miss out on the boundless opportunities CTV advertising offers to elevate your brand presence and engage with audiences. Get ready to captivate, convert and conquer CTV advertising with Vibe.