What Is Connected TV and How Is It Changing Traditional Advertising?
Written by Rebecca Barth
Connected TV is quickly becoming the preferred viewing method and will likely eclipse cable in the near future. According to the Leichtman Research Group, 74% of U.S. households currently use at least one connected TV device, which has created entirely new marketing and advertising opportunities. But what exactly is connected TV and how is it changing traditional advertising?
What Is Connected TV?
If you use Apple TV or Roku to access your favorite apps on your TV, you’re already familiar with connected TV technology. Connected TV — also known as CTV — refers to televisions that can connect to the internet (either smart TVs or those connected to streaming devices or gaming consoles).
How Do Connected TVs Display Ads?
When users open an app like Pandora on their CTV, they might be shown a brief 15-30 second ad before they can view their Pandora music and start singing along to their favorite tunes. Other CTV apps with advertising include Fox Now, Google Play, and Crackle, which often show ads in the middle of content as well.
The Connected TV Advertising Dictionary
Before we dive into how CTV advertising works and its many benefits, let’s cover a few related terms you should know if you’re interested in CTV advertising.
- Over the Top (OTT): Video services that go “over” your cable content to provide additional content through the internet. CTVs stream OTT content.
- Full-Episode Player (FEP): FEP is professional video content that is television length, includes commercial breaks, and can be accessed from both apps and the web.
- Live Streaming: Refers to television content that is streamed in real time over the internet, typically by a paid streaming service or directly by the network.
- Video on Demand (VOD): Allows the user to watch what they want, where and when they want. Users can stream or download VOD content any time after the program is aired live.
- Ad Reach: This is a metric term that describes what percent of your target audience (ex: 18 to 24-year-olds) have seen at least one of your ads.
- Ad Frequency: The frequency of your ad measures how many times a single viewer in the target audience has seen one particular ad.
- Cost Per Point (CPP): Like cost-per-click in paid digital advertising, the CPP determines how well your ads reach the desired audience for the price you are paying to show them.
How Is Connected TV Changing Traditional Advertising?
With more and more households, especially those with Millennials, using CTV services instead of cable or traditional TV, many businesses and advertisers are going to need to shift to advertising through CTV to reach certain demographics.
According to the Video Advertising Bureau, in 2017 there were over 14.1 million households in the U.S. that only viewed video content through OTT services. That’s 11% of households with TVs that did not see your traditional TV advertisements. Of the other households, 74% were multichannel, meaning those households accessed content through OTT in addition to traditional viewing channels. The study predicts that OTT-only households will rise by more than 8% by 2021.
Many businesses consider digital ads such as Facebook or Google ads to be completely different than TV ads. However, CTV advertising is bridging that gap with ads that incorporate the wide audience of traditional television advertising with the targeting and tracking benefits of digital advertising.
5 Benefits of Connected TV Advertising
Besides being able to reach users who don’t have cable or even network TV services, CTV provides several other key benefits for advertisers.
- Highly Targeted: CTV ads have increased audience targeting abilities — including first– and third–party targeting, lookalike modeling, retargeting, and cross–device targeting.
- Numerous Parameters: With CTV advertising, you can easily specify the device, frequency, geography, and time your marketing content is seen by users.
- Easily Trackable: Like digital advertising methods, CTV advertising allows for simple, real-time tracking of views and clicks.
- More User-Friendly: Many users find ads on their CTVs less invasive and more relevant. This improved experience means users will think more highly of your brand and be more likely to purchase products and services.
- Increased Brand Awareness: Because users are only being shown one or maybe two ads at a time (compared to the standard four or five during traditional TV breaks), they are more likely to remember your ad and your brand.
Interested in Advertising With Connected TV? Get Started Today
Here at LaFleur, we utilize programmatic advertising tactics (and our mad design and writing skills) to create beautiful ads that help increase your brand awareness. Our marketing repertoire includes targeting for CTV advertising in addition to online search, display, and remarketing campaigns.
If you’re interested in learning more about targeting for CTV devices, give us a call at (888) 222-1512 or complete our online form. We’d love to discuss your options and how CTV advertising can benefit your business.
74% of U.S. TV Households Have at Least One Connected TV Device. (2018, June 8). The Leichtman Research Group. Retrieved from https://www.leichtmanresearch.com/74-of-u-s-tv-households-have-at-least-one-connected-tv-device/
An overview of the competitive video ecosystem. (2018, March). The Video Advertising Bureau. Retrieved from http://www.thevab.com/wp-content/uploads/2018/03/OTT-Ecosystem-Overview-Final.pdf