If you’ve ever seen an ad on Hulu, YouTube TV, or Sling TV, you’ve seen CTV advertising in action. As per its definition, Connected TV (CTV) advertising allows advertisers to reach target audiences via smart TVs and other OTT (Over-the-Top) devices.
CTVs are part of the overall OTT universe that encompasses any video content or service that can be streamed via the internet, such as Netflix, Disney+, and Amazon Prime Video. The term “Over-the-Top” refers to the method in which the content is served – meaning over the top of the “box” services like traditional cable or satellite TV. It’s important to make the distinction, as these two terms often get mixed up. It helps to think of the two as working together – OTT delivers the content and CTVs are the some of the outlets or devices that the content is served on. CTV advertising is the ad content you’ll see on CTVs.
Why CTV Advertising?
As the world binge-watched while we were all stuck indoors in the early part of 2020, the rate of streaming content viewers skyrocketed. A study revealed that as of 2020, 82% of U.S. TV households had at least one internet-connected TV device. As a result, regular “linear” TV viewing is down to one-third of all TV viewing, compared to 60% just two years ago. Advertisers went where the viewers were to get in front of their target audiences using these emerging media sources, while smaller brands were able to launch their own TV ad campaigns with smaller budgets.
Benefits of OTT & CTV Advertising
At a first glance, CTV advertising seems like a sure win. However, to be sure it can deliver for your brand, it’s important to understand the how’s and the why’s.
CTV & OTT have better reach. With your ads appearing via streaming services, you reach an audience you normally wouldn’t on broadcast TV. The growing number of cord-cutters, cord shavers, and “cord nevers” just proves that the shift in how we view entertainment is changing and doesn’t show any evidence of slowing down.
CTV advertising has more precise targeting than linear TV. Advertisers can choose specific geographic areas or targeted audiences, eliminating “wasted” impressions – something broadcast commercials can’t claim. Marketers have opportunities for retargeting for more impact after data measurement and analysis.
Get better reporting. By advertising on OTT platforms, you’ll gain stronger and more valuable data analysis to target and retarget your audience.
It’s cost-effective. Compared to linear TV advertising, CTV ad CPMs are typically higher, but you can spend less money to reach your audience, allowing more customized media buying while eliminating wasted ads and offering more value in the long run. CTV advertising is a great option for new brands to build awareness at a reduced cost compared to linear TV.
Viewability is high for CTV ads. Viewability is extremely higher for non-skippable TV ads since users must watch it to completion to continue watching a show on most platforms, delivering a completion rate of 98%.
CTV advertisers have options. Advertisers can choose from in-stream ads, home screen ads, or interactive ads, along with new innovations that continue to be made available.
CTV advertising works. Criteo’s latest consumer behavior survey found that 4 in 5 consumers were influenced by video streaming content and ads when making a purchase.
OTT & CTV Advertising Challenges
The industry is growing at such a rapid pace that it has not yet developed the proper standards and guidelines to allow for a seamless implementation. Before you consider sinking your entire ad budget on CTV, consider the following:
OTT is poorly organized. A lack of standardized identifiers inhibits ads to specific viewers consistently. Flash and cookie support is sparse and limits elements of targeting. When users switch devices, it also poses a problem for identifying target audiences.
No user identifiers create a lack of transparency. Because both the CTV device and the OTT platform each have different IDs, advertisers may know where they are putting their money but not know who they are reaching or how often they are reaching them.
Should I use direct or programmatic advertising? This depends on what is most important to you. If you want to know exactly where and when your ad is running, direct advertising is your best bet. If you’d like a wider range of options to reach your audience, programmatic advertising is a better option. Each avenue has its limitations on data and potential fraud, so partnering with an expert is crucial to getting the most out of your advertising budget.
How To Make OTT & CTV Advertising Work for You
As with any new marketing initiative, a best practice is to always diversify. The past year showed that streaming content was also used heavily across several different devices, including tablets, smartphones, desktops, and laptops. Spreading out your OTT advertising across CTVs and other channels is your best bet and allows you to use personalization and retargeting to maximize your ROI.
Use all the data you have available to you. Between your data, the first-party data provided by your OTT advertising partner, and any third-party data used, you can pinpoint your audience with the narrowest segmentation. For even better results, continue monitoring the data and optimize your campaigns as you see your data change.
The bottom line is that OTT & CTV advertising aren’t going anywhere and will continue to grow exponentially. Advertisers that have jumped on the early bandwagon have seen CTV advertising deliver the impact of linear TV advertising with the bonus of precise targeting of digital ads. With OTT & CTV only gaining momentum, it’s important to get a team on your side that knows how to navigate this new territory.
We are CTA advertising experts. Strategic Marketing offers our clients proficiency in these types of media buys by staying on the cutting edge of OTT trends. A leader in the South Florida advertising landscape for over 29 years, our proven strategies have helped small and large businesses grow and thrive through the ebbs and flows of the global market. Call us at 561-688-8155 to learn more about Strategic Marketing and how we can get you started on CTV advertising today.