What Is CTV Advertising: Are Connected TV Ads Worth It?

If you’re like most marketers, you’re always on the lookout for new and innovative ways to reach your audience. Also, if you’ve been keeping up with the latest trends, you know that connected TV advertising is a great opportunity to do just that.

If you are still not using connected TV advertising, maybe this is the time to start. Let’s take a closer look at this powerful marketing tool.

Key Points

  • What Is CTV Advertising
  • How Does Connected TV Advertising Work
  • CTV Performance Indicators
  • How Much Does CTV Cost
  • Types of CTV Ads
  • Benefits of CTV Advertising
  • Our Takeaway

What Is CTV Advertising?

CTV advertising is a type of digital advertising that allows brands to reach consumers through connected applications and other devices. Here are some of the most common types of connected TV advertising platforms.

Smart TVs

Considering that a staggering 76% of American households own a smart TV, it’s not surprising that smart TV advertising has become increasingly popular. As the number of people using these devices continues to grow, so does the opportunity for brands to reach them with targeted advertising.

Gaming Consoles

Think of the newest PlayStation 5, Xbox Series X, or Nintendo Switch—the gaming community is only destined to rise. Research states that over half of all US households have at least one console.

Other Connected Devices

In addition to smart TVs and gaming consoles, many other connected devices can be used for advertising. These include streaming media players, set-top boxes, and even some Blu-ray players.

How Does Connected TV Advertising Work?

We all know that digital and traditional advertising methods are very different. Smart devices are all about interactive media, online streaming, and over-the-top content. But how does it work?

CTV and other digital advertising work pretty much the same—with ads being purchased via auction. When it comes to access, CTV ads usually take place on an invite-only private marketplace. This way, you can be sure that your ads are being seen by the people who are most likely to be interested in what you have to say.

CTV Performance Indicators

There are several different performance indicators that you can use to measure the success of your CTV campaigns. Here’s how.

Cost per Completed View

The cost per completed view, or CPCV, estimates the cost of your ad for each person who watches it from start to finish.

Completion Rate

This metric measures the percentage of people who watch your ad all the way through.

View-Through Rate

Also known as VTR, the view-through rate measures the percentage of people who see your ad and take action, such as visiting your website or making a purchase.

How Much Does CTV Cost?

The cost of CTV advertising varies depending on a fair share of factors, including the platforms you use and the targeting options you select.

In general, CTV campaigns tend to be very cost-effective, with some studies finding that they can cost from $20 to $50 per 1,000 impressions.

Types of CTV Advertising

If you would like to know which CTV ad formats are best for you, take a look at some of the most popular choices.

Home Screen Placement

Home screen placement is a type of CTV advertising that allows you to place your ad on the home screen of a connected TV platform. This is a great way to ensure that viewers see your ad as soon as they turn on their smart devices.

In-Stream Video Ads

In-stream video ads are served to viewers while they’re watching a piece of content and can be either pre-roll (shown before the content), mid-roll (during the content), or post-roll (after the content).

Interactive Pre-Roll Ads

Interactive pre-roll ads are a type of in-stream video ad that allows viewers to interact with your ad before they watch the content they’re interested in. For example, you might allow viewers to choose what product they want to see in your ad or what type of information they want to learn about your brand.

Benefits of CTV Advertising

In order to reach a larger audience and maximize the effectiveness of your marketing activities, it’s time to take advantage of the unique potential that the CTV advertising platforms provide.

Improved Targeting

Compared to other forms of digital advertising, CTV allows you to have more control over who you are targeting.

Save Time and Effort

With traditional TV advertising, you have to buy ad space on specific channels and hope that your target audience is watching them. But this is not the case with CTV ads. 

In fact, CTV advertising allows you to aim at specific audiences with targeted content, which means that you don’t have to waste a lot of time and effort.

Brand Safety

Brand safety is another significant benefit of CTV advertising. With traditional digital advertising, there’s always a risk that your ad will be shown on a website that isn’t appropriate for your brand. 

However, with CTV advertising, you can rest assured knowing that your ad will only be displayed on reputable platforms.

Measurable Ad Results

While traditional TV advertising makes it difficult to track what happens after someone sees your ad, this doesn’t happen with CTV. 

In the case of CTV advertising, you can use performance indicators like CPCV, completion rate, and VTR to track the success of your campaigns.

High Completion Rate

Compared to traditional TV advertising, the completion rate for CTV is much higher. This is because viewers have to choose to watch your ad on CTV, which means they’re more likely to be interested in your content.

What Is CTV Advertising: Our Takeaway

If you’re looking for a new way to market your product or service, consider using advertising on a connected TV.

Although CTV advertising is still in its early stage, it’s constantly developing. Because media generally causes plenty of distractions, CTV can be the way to go. By targeting specific demographics and providing relevant content, you can create ads that are more likely to be seen and appreciated by viewers.

Frequently Asked Questions

Is CTV digital advertising?

CTV advertising is a type of digital advertising that would typically fall under the category of display advertising. However, because CTV involves streaming content on a TV screen, it has some unique features that set it apart from other types of digital advertising.

For example, CTV ads are typically more extensive and attention-grabbing than traditional display ads. They are often interactive, allowing viewers to engage with the ad in some way. Additionally, these ads can target specific demographics based on the viewer’s location, viewing habits, and other factors.

As a result, CTV provides an effective way for advertisers to reach their target audience with a message that is both eye-catching and relevant.

Is CTV effective?

Many marketers believe that CTV advertising is as effective as linear TV. However, there is no definitive answer to this question.

Some argue that CTV campaigns significantly increase brand awareness and ad recall, while others claim that CTV ads are more effective than linear TV ads in driving purchase intent. However, it’s important to note that the effectiveness of CTV advertising varies depending on the campaign goals.

What is the difference between CTV and OTT?

Now that we’ve answered the question, “what is CTV advertising,” it’s time to look at the comparison between CTV and OTT.

CTV and OTT, more commonly known as over-the-top advertising, are both terms used to describe the delivery of content via the internet. Although CTV and OTT are very similar, they are far from identical. For instance, OTT encompasses all TV content that is delivered over the internet, while CTV specifically refers to TV content that is delivered via apps on smart TVs, gaming consoles, and streaming devices like Roku or Amazon Fire Stick.