Posted on May 28, 2024

The Power of CTV Advertising: Unlocking Targeted Reach and Engagement

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Linear TV is losing ground to CTV, and this is not surprising since watching content on streaming platforms is much more convenient than relying on traditional TV channels. For advertisers, CTV also implies an entire set of opportunities. 

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. In this guide, we will clarify the CTV marketing meaning, explore its benefits, and not only.

What Is Connected TV?

Before we answer the question “what is CTV in digital marketing?”, let’s find out what CTV means on its own. Standing for Connected TV, CTV is a device that enables video content streaming. The most obvious example is a smart TV connected to the Internet, although gaming consoles and gadgets like the Roku Streaming Stick are also on the list of connected TV devices. 

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The Evolution of TV Advertising

Nowadays, online video content is packed with a variety of CTV advertising examples, but it has not always been like that. 

The First TV Ad Ever

TV advertising was born in 1941 when the commercial of Bulova watches became the first ad to be delivered via TV during a baseball game.

Regulations are Entering the Stage

After advertisers started using TV to reach their audiences, it didn’t take long for regulations to be introduced. They mainly focused on promoting socially responsible practices.

Cable TV Offers Even More Opportunities

After the appearance of cable TV in the 1950s, marketers got an opportunity to address highly engaged users. During that period, they preferred short but catchy commercials.

24/7 Advertising Becomes Possible

After continuous broadcasting was introduced, it became possible for advertisers to deliver ads regardless of the daytime and time zone. This meant an ability to reach users globally.

CTV Changes the Advertising Landscape

After CTV devices entered the market, viewership habits have changed significantly. People started to prefer the convenience of connected TV, while advertisers gained an opportunity to enhance targeting and reach their customers programmatically. 

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What is Connected TV advertising?

Now, let’s finally answer the question, “what is CTV in advertising”. 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 were 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 coming years. 

How Does CTV Advertising Work?

Since you are already familiar with the connected TV advertising definition, let’s discover how CTV advertising works. 

Create Your Ad

The first step is to come up with a commercial (make sure it’s catchy) and upload it to the selected platform. 

Set Up Targeting

The next thing to do is to go through the targeting settings and provide as many details about your audience as possible. The more targeted the campaign is, the better results it delivers.

Go Omnichannel

To ensure the campaign’s success, it’s essential to reach users across multiple channels and devices. Prepare creatives that would match your CTV ads to build brand awareness.

Set Your Budget

The final step is to specify your budget and launch the campaign. Note that programmatic connected TV advertising platforms often have bid optimization features from which you can benefit. 

8 Types of Connected TV Ads

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 smart TV advertising can be interactive, skippable, or non-skippable. 

  • Interactive ads boost viewer engagement by encouraging audiences to interact with an ad by clicking links, scanning QR codes, giving feedback, etc.
  • Skippable ads allow viewers to omit an advertisement after a few seconds. The time may vary, but naturally, it’s 3 or 5 seconds. Advertisers don’t pay if users skip an ad but pay when they watch a certain percentage of the ad. 
  • Non-skippable ads don’t provide an option to move to the streaming content instantly, and viewers have to watch an advertisement till the end. It takes approximately 15-30 seconds.

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. 

Instream or Linear Video Ads

This type of CTV advertising emerges when users consume video content in the digital space. Instream ads may resemble traditional TV ads since they are aired in three formats when users watch movies or TV shows: pre-, mid-, and post-rolls. 

  • Pre-roll ads emerge before the main video content. Sometimes, viewers can skip an ad after several seconds or watch the full version of the advertisement before they can access their desired content. 
  • Mid-roll ads interrupt the show or movie in the middle of streaming long content, just like a commercial break on linear TV.
  • Post-roll ads show up at the end of the streamed video. 

Non-linear Ads

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. 

  • Picture-in-picture ads, or a ‘Double Box’ format, are a type of nonlinear CTV video overlay advertising. Streaming content plays in the small window simultaneously with advertisements.

Companion Ads

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.    

Display Ads

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. 

Audio Ads

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.

Dynamic Ad Insertion in CTV (DAI)

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.

360-degree Videos

These immersive videos allow viewers to interact with the content by changing their perspective. They are especially effective for showcasing products or immersive storytelling.

Augmented Reality (AR) Ads

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? 

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Key Benefits of CTV 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.

Access to a Wider and More Engaged 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.

Optimized Ad Spend

What does CTV mean in advertising in terms of cost-effectiveness? 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.

Precise Targeting

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.

Support for Multiple Ad Formats

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.

Campaign Performance Measurement and Tracking

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.  

  • A campaign impression is the number of times an advertisement has been served.
  • The completion rate is the number of times an advertisement has been watched to the end. This indicates how many individuals watched through the entire commercial. 
  • Total reach represents all the unique devices and homes where the CTV ad is displayed.

Interactive and Responsive Advertising

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? 

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CTV Advertising Strategies

When it comes to building a CTV advertising strategy, it’s essential to keep in mind several factors. 

Use Trusted Data Only

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. 

Leverage Precise Targeting Opportunities

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. 

Integrate the Latest Tech Trends

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. 

Remember About Retargeting to Enhance ROI

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.

3 Best Practices for CTV Advertising

The following practices seek to enhance ad campaigns on the CTV platforms. 

Track Results

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. 

Go for Programmatic

87.2% of US CTV ad spending (including YouTube) is programmatic. Advertisers and brands use programmatic CTV advertising platforms to meet their targeted consumers, optimize campaigns, and boost ROI with precise data. 

Set Up Frequency Capping

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.

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Ad Fraud and Brand Safety in CTV Advertising

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. 

  • Website fraud is presented in the form of non-human traffic, impression laundering, and hidden ads. 
  • Background and spoofed apps, hidden ads, and performance manipulation take place on mobile devices like phones and tablets. 
  • Bot fraud is software that intentionally generates ad views and clicks to pump out money from advertisers. 

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.

Keep Up To Date With SmartHub

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 on the CTV industry and not only. Our commitment to delivering the latest industry insights ensures you’re well-equipped to navigate the dynamic world of technology.

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Summing up

What is CTV in marketing? It’s all about benefits for advertisers, including precise targeting and multiple ad formats. SmartHub owners can also take full advantage of CTV media trading in their marketplaces. The platform supports an entire set of formats (CTV is on the list), so there is no need for you to build such functionalities from scratch. Instead, you can start earning money through media trading after only one week. 


How does CTV advertising differ from traditional TV advertising?
CTV advertising revolutionized the industry by bringing interactive ad formats, integrating granular targeting, enhancing performance metrics, and driving CTV ad ROI.
What are the best practices for CTV ad optimization?
Audience segmentation, diversification of creatives, and data-powered decision-making can streamline CTV ad campaigns.
What are the emerging trends in CTV advertising?
Trends in CTV advertising develop along with cutting-edge technologies and include addressable TV advertising, advanced measurement, interactive CTV ads, data privacy, and cross-channel integration, reflecting the evolving landscape’s data-driven and interactive nature.
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