AD TECH INSIGHTS
by Roman Vrublivskyi
Posted on Oct 20, 2023
The Power of CTV Advertising: Unlocking Targeted Reach and Engagement
by Roman Vrublivskyi
by Roman Vrublivskyi
In recent years, connected TV has become a buzzword in the home entertainment and digital marketing industries. It is not surprising, as there is an increasing preference for CTV over linear television. People simply pull off the cords for wireless content viewing.
The skyrocketing popularity of programmatic TV advertising is evident in many ways, including the variety of ad types and specific features of the CTV space that allow the full use of the lucrative potential of CTV platforms for advertising campaigns. Let’s have a sneak peek at the CTV world.
Talking about the CTV advertising meaning, CTV (Connected TV) refers to any type of device that can connect to the internet and support digital video streaming. Unlike typical television sets, they can broadcast content from multiple sources (the Internet, local stations, and cable TV).
CTV advertising definition includes a smart TV with an embedded Internet connection mechanism, or it could be a smart device that is plugged into a regular television to enable the TV to connect to the web. Gaming consoles like the PlayStation and Xbox and adapters like Roku, Chromecast, Apple TV, and Amazon’s Fire TV are examples of connected TV gadgets.
Connected TV is like a video entertainment hub that allows you to watch regular TV, satellite TV, and stream Internet-based media all on the same device. In 2023, US adults are projected to spend, on average, nearly two hours daily using CTV devices.
People are increasingly turning to CTV because of its convenience and improved entertainment value. 88% of US households have at least one Internet-connected TV device, while the number of CTV users exceeds 110 million among Gen Z and Millennials.
This number can’t help but draw the attention of brands and advertisers. They include this channel in their marketing strategy because CTV allows for reaching solvent audiences with improved targeting solutions and delivers better campaign results than linear TV advertising. And as regular TV viewing declines further, CTV will become one of the most prolific advertising channels in the upcoming years.
Connected TV does not operate like traditional television; hence, displaying ads on CTV works quite differently and may demand a digitally inclined approach. The Internet enables connected TV, suggesting that the programmatic ad approach will be the most effective method to publish CTV ads.
Programmatic advertising enables the automated purchase and display of digital advertisements. You do not need to manually search for channels to display your ads with programmatic systems.
Thanks to a data-driven approach and real-time bidding, your ads are automatically served to the right audience. In this scenario, programmatic ad technology assists in purchasing ad inventories specifically designed for connected TV devices.
Also, programmatic CTV advertising enables marketers to serve custom ads for different audiences. In this case, different ads can be displayed to various individuals who are viewing the same show broadcast on separate devices.
Let’s briefly consider the types of CTV ads and how they work. But before that, it’s important to mention that connected TV (CTV) advertising can be interactive, skippable, or non-skippable.
These are a few connected TV examples of ad interaction with viewers. Let’s delve into more details and consider the most popular CTV ad types.
This type of CTV advertising emerges when users consume video content in the digital space. Instream ads may resemble a traditional TV ad since they are aired when users watch movies or TV shows in three formats: pre-, mid-, and post-rolls.
Non-linear video ads, also known as overlay ads, display over the screen concurrently with the video playback and without interrupting streaming. These are small static images, texts, videos, or animated media with call-to-action buttons or clickable links that deliver improved engagement with an audience.
Companion ads may appear in parallel with linear or nonlinear ads. Companion ads display in different forms, from static images and text to rich media and creatives wrapping around the screen.
Advertisers use companion ads to be visible to viewers when they consume content. This type of ad minimizes the disruption of content viewing and enhances a flawless user experience.
The interface is another place where static or animated banners are delivered across CTV platforms. Display ads appear in the menu section, home screen, inline placement, etc.
Display ads on CTV provide the same experience as display ads on the web without interfering with streaming.
These are audio-only ads that play during audio streaming services on CTV platforms. They are effective for reaching viewers who listen to music or podcasts.
DAI technology allows advertisers to serve personalized advertisements to individual viewers based on their profile and viewing behavior. This enables highly targeted and relevant ad experiences.
These immersive videos allow viewers to interact with the content by changing their perspective. They are especially effective for showcasing products or immersive storytelling.
AR ads incorporate augmented reality elements into the viewing experience, allowing viewers to interact with digital objects or information overlaid on their screens.
The abundance of CTV advertising demonstrates that advertisers can engage with viewers in multiple ways and test the most effective types of ads. What are the benefits of connected TV advertising?
Connected TV advertising offers a result-oriented approach to TV media buying. It enables precise targeting based on data analytics and demographical preferences. Compared to traditional TV commercials, CTV ads provide superior insights, precision, and measurable results, especially when it comes to programmatic. While linear TV advertisers can target only based on the context of the broadcasted TV show, CTV ads can be served programmatically to a preferred audience in line with particular features of this audience.
Advertisers prefer connected TV to linear TV because the ads projected on CTV channels have more views than ads on linear TV. Besides, the CTV audience is better engaged with ads because of the convenience and varying entertainment options. This means that an increasing number of targeted viewers will see and interact with a CTV ad.
CTV ads are 53% less expensive and more efficient than traditional TV ads. A CTV ad displayed on one device might reach numerous individuals simultaneously. This is a more efficient marketing approach than displaying ads on mobile devices.
Moreover, CTV commercials are data-driven, ensuring ads are aired at specified times. They target the right people instead of the spray-and-pray strategy of linear TV ads. With this data-driven method coupled with programmatic ad-buying processes, your ad budget is spent only when necessary and based on insights.
Granular targeting capabilities allow CTV advertising to outcompete other marketing channels in efficiency. Smart TVs and other CTV devices offer personalized user experiences based on first-party data, including language preference, location, or other information. This data can be harnessed for more precise and insightful targeting.
In addition to targeting, the information can also be used for retargeting and cross-targeting. Users who have shown interest in a brand or ad on one digital channel can be retargeted on a CTV channel and vice versa.
Targeting and retargeting on CTV channels is more effective because it allows sending more individualized ads to a specific and relevant audience rather than to a general audience.
By displaying ads on CTV, advertisers can test different ad formats to know which is best for a particular campaign. Marketers can try static images, graphics, interactive video ad formats, etc., to find the most engaging for their audience. Most of these formats raise user involvement as they make it possible for ads to interact with the audience. This greatly promotes brand-user relationships, brand recall, and enhanced customer satisfaction.
With linear TV ads, tracking and measuring ad performance is impossible. However, this is not the case with CTV advertising. On the CTV programmatic platform, marketers can measure their campaign performance and track user engagement.
So advertisers can track and monitor campaign impressions, completion rates, and total reach in the CTV space.
Connected TV advertisements can be broadcast when viewers are most receptive. For instance, ads can be delivered to target viewers when certain events are airing. For example, sports lovers can be targeted in a game final. Also, people can interact with ads by sending messages, choosing options on creative, or clicking prompts. Interactive ads offer the advantage of higher engagement and conversion rates.
How to increase CTV ad reach with a proven strategy?
When it comes to building a CTV advertising strategy, it’s essential to keep in mind several factors.
Partner up with reliable data providers who can give you a database for your advertising campaigns. Otherwise, there’s a risk of compromising the brand’s reputation and failing the ad campaign.
Reaching and engaging with relevant viewers via your ads is a practical approach to hitting your marketing goals cost- and time-effectively since the ads are served to the right audience when they are ready to engage.
With datasets in the CTV landscape, advertisers can segment their audience and serve the right messages to the relevant viewers. The CTV viewers are filtered and precisely targeted by their demographic or regional peculiarities, types of devices, and other features. Plus, cross-device targeting on CTV enables advertisers to engage with the audience through multiple devices and serve relevant ads.
It’s hard to impress modern viewers with traditional approaches to ad creative. The audience is tech-savvy and picky in terms of content quality. Therefore, using a creative approach and integrating advanced technologies into ads (e.g., augmented reality (AR), virtual reality (VR), interactive elements, dynamic personalization, etc.) are the keys to success.
Besides, choose relevant ad formats and placements aligned with streamed content and the audience’s experience. By giving these ads an interactive touch (e.g., polls and clickable buttons), there are more chances to hook viewers’ attention.
Give users a second chance to like your product and expand it again through retargeting. CTV retargeting allows for reaching a truly interested audience in a previously exposed product. So brands can get better results while eliminating budget waste.
The following practices seek to enhance ad campaigns on the CTV platforms.
Various ad types deliver different results, so advertisers can A/B test and streamline their ads. The CTV space offers multiple opportunities to monitor ad campaign performance in real time and adjust it instantly for better results.
87.2% of US CTV ad spending (including YouTube) is programmatic. Advertisers and brands use this media buying method to meet their targeted consumers, optimize campaigns, and boost ROI with precise data.
CTV users can see the same ad across multiple platforms during a short period of time. Frequency capping allows for properly allocating the ad budget and minimizing possible irritation from the repetitive ad display. This CTV feature limits the number of views for every viewer and thus boosts ad performance and engagement.
CTV is an appealing space not only for advertisers but also for fraudsters. In 2022, malicious activity in the CTV space spiked by 69% compared to the previous years. So, ad fraud is the biggest challenge for industry players and stands for invalid traffic presented by counterfeit clicks, impressions, and conversions.
This malicious activity compromises the return on media investment and leads to a decrease or total loss of revenue. Ad fraud occurs on sites and apps or can be caused by malignant bots.
The good news is that ad tech companies can detect and minimize the effect of fraudulent schemes on ad displays by cooperating with trusted partners. Working with SmartHub, you can use an integrated ad fraud detection system.
At SmartHub, we understand that the key to success in this rapidly changing landscape lies in staying highly up-to-date. That’s why SmartHub supports all kinds of traffic types and ad formats, including connected TV advertising (CTV).
Stay tuned to our platform for the most relevant and up-to-the-minute news and updates. Our commitment to delivering the latest industry insights ensures you’re well-equipped to navigate the dynamic world of technology.
СTV advertising holds a lot of benefits up its sleeve, and SmartHub owners can take full advantage of CTV media trading in their marketplaces. As an owner of the platform, you can magnify ad-serving opportunities with CTV ads and thus increase the effectiveness and profitability of your ad exchange. All you need is to partner with SmartHub to buy and sell inventory with supply and demand partners effectively.
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