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CTV is the fastest-growing major ad format in the United States and allows marketers to reach highly engaged audiences through the biggest screen in their house.
With over 54% of US households being “non-pay TV,” meaning they have canceled or never subscribed to a traditional pay TV service (e.g., cable, satellite, or telecom), CTV advertising has significant potential.
In this article, we’ll review what it is, why it’s important, how it works, and how you can buy CTV advertising today.
CTV advertising is a type of digital advertising that appears within streaming content on Smart TVs like Roku, Apple TV, and Google Chromecast but doesn’t include other device types like smartphones, tablets, and desktop computers.
📺 Where are CTV ads shown?
CTV ads show alongside TV shows or live streams viewed through streaming platforms (e.g., Tubi, Hulu, Peacock, and Pluto TV) or interactive CTV ads that are shown to a specific audience and include engaging actions for viewers.
An example of a David’s Bridal CTV advertisement.
With CTV advertising, marketers can promote their products or services on popular streaming platforms and use advanced audience targeting features to reach customers most likely to purchase.
Unlike some other advertising formats, CTV is highly measurable, enabling marketers to understand the full efficacy of their advertising investments.
Example: Meineke, an auto repair company, struggled to reach new audiences. So, they developed a Connected TV campaign targeting premium audiences from NHL and NFL games, resulting in a 63% higher conversion rate with live sports ads and 48,000 in-store visits over two months, and exceeding their on-target goals by more than 180% compared to linear TV in the 18-34 age bracket. View the ad here.
OTT advertising, or Over-The-Top advertising, is a type of digital advertising that delivers ads through internet-connected devices that stream video content, including smart TVs, gaming consoles, and streaming devices, and is often associated with subscription-based services like Netflix, Hulu, and Disney+.
Although CTV and OTT are sometimes used interchangeably, OTT encompasses any internet-connected device, while CTV specifically refers to viewing content on a smart TV.
📺 Related Article: OTT vs CTV: What Are They? Learn about the differences between OTT, Linear TV, and CTV, the benefits, and which options are best for your business needs.
Programmatic TV advertisers recognize significant advantages in CTV growth, targeting, optimization, and measurement, among other benefits.
Connected TV boasts the highest video completion rates worldwide at a whopping 98% compared to mobile web, app, and desktop. Also, CTV delivers the highest ad view share across devices, with over 71% of impressions in 2022. These stats suggest more viewers will watch the entire ad, increasing the chances of brand recognition and recall.
Also, interactive CTV ads, which provide interactivity for viewers, enhance engagement and increase brand recognition. Magna, a media strategy group, found that interactive video ads drive a 47% gain in time spent with a marketing message compared to a non-interactive ad.
Precise audience targeting allows marketers to reach viewers based on demographics and interests (e.g., age, gender, race, location), ensuring a meaningful connection between brand messages and the consumers reached.
For linear TV, Nielsens’ broad age and gender metrics limit targeting to identifying programs with the highest audience concentration among specific demographic groups (e.g., men ages 45-69, women 24-45). With addressable CTV advertising, advertisers can micro-target viewers to increase engagement rates.
Example: A women’s clothing company runs linear ads during a daytime soap opera because the show’s audience mainly comprises women aged 18-49.
With addressable CTV advertising, the women’s clothing company could target viewers who have recently purchased women’s clothing or are interested in women’s fashion by displaying interactive CTV ads with a QR code directing viewers to the website to shop.
Also, brands can use their own First-Party data to reach potential or existing customers or rely on tools like Axon Audience Manager to provide a comprehensive audience analysis through various data types.
Our proven four-step process makes planning and executing CTV campaigns straightforward.
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Since most CTV ads aren’t clickable, advertisers may have difficulty connecting the ads to actual sales.
CTV’s scale of measurement options enables marketers to understand the opportunities available and determine the best approach for their brand. Also, these various metrics allow advertisers to determine campaign quality and adjust strategies accordingly.
We measure CTV campaign success in 5 categories:
Linear TV advertisements are planned and inserted well in advance, making it difficult to make changes mid-campaign.
In-flight optimization allows advertisers to test different variables, such as creative versions, audiences, and channels, and modify them as needed to optimize performance.
📚 Related article: Interactive CTV Ads are the Secret to Higher Engagement and Longer Viewing Rates
Read more about how interactive CTV ads can increase engagement, improve brand recall, and deliver better results.
CTV’s digital capabilities can pinpoint customers based on location through IP addresses, enabling advertisers to serve ads within a smaller geographic area.
Advertisers can also customize messaging based on a viewer’s location, like sending the appropriate commercial to viewers closest to each of a restaurant’s five locations.
🌍 How do CTV ads help with local marketing?
“Using IP addresses to pinpoint customers, advertisers can deliver highly relevant content to viewers in their local markets. This opens up a world of possibilities for local businesses, allowing them to target potential customers in a highly granular way. With the ability to customize messaging based on location, marketers can tailor their campaigns to resonate with specific audiences and achieve greater engagement and conversion.”
–Sam Wilson, Senior Account Executive, KORTX
Geo-targeting like this allows advertisers to tailor their messaging to the local audience, resulting in higher engagement and, ultimately, better ROI.
Many argue that CTV advertising has an advantage over other media types in terms of effectiveness in a cookieless environment. This is due to the underlying structure used for targeting and attribution. Instead of cookies, CTV primarily leverages alternative identifiers such as device IDs, IP addresses, and geolocation data.
📑 Related article: Welcome to the Cookieless Future
Read more about using First-Party data and testing cookieless tracking solutions.
Due to their prominence in a family’s living room, Connected TV screens have been dubbed as the new homepage by NewDigitalAge. As the largest screen in the house, CTVs become the focal point of the room and offer advertisers a unique opportunity to reach a captive audience in a relaxed and comfortable environment.
CTVs allow advertisers to create visually appealing graphics and highly engaging advertisements that are difficult to achieve on smaller screens, such as mobile devices or laptops.
In a co-viewing environment, where more than one person is typically on the other side of the screen, advertisers can create campaigns that appeal to a broader audience, leading to increased engagement and brand awareness.
With CTV, advertisers can reach their target audience through the largest screen in the home, with advanced targeting, measurement, and optimization capabilities that traditional TV advertising cannot offer.
Here’s how it typically works:
At KORTX, our proven four-step process makes planning and executing CTV campaigns straightforward. If you’re interested in buying CTV advertising, we’ll apply this process to ensure a seamless and successful campaign.
Let’s review each in more detail.
In the Discover phase, we offer two strategy approaches:
To guide this process, we begin with an audience snapshot to extract your customers’ key interests and behaviors, including media consumption, purchase behavior, and household demographics.
In the example below, we walk through an automotive brand’s focus on driving sales for eco-friendly vehicles and discover the highest indexing demographic category and viewership habits.
We also uncover where these people live, which can be used to influence campaign geo-targeting.
With the Discover phase complete, we have the information needed to build your CTV campaign.
We’ll select audience segments, inventory, and creative messaging in the Define stage to maximize campaign personalization.
First, we use data from industry-leading ACR providers such as SambaTV and Kantar and viewership data from Comscore to reach your audience. Segments are available to reach cord-cutters and streamers across all programmatic channels.
Next, we leverage our deterministic, cross-device graph of over 170M customers to reach these qualified audience members on the CTVs within their homes.
💡 KORTX TIP: Enhance your CTV campaign and reach these same users with display, rich media, or online video
💡 Bonus KORTX TIP: Implement Axon Audience Manager through KORTX’s early access program to begin capturing 1P data that can be used for CTV targeting.
Then, we use viewership insights to understand the content your target audience watches on their household’s largest screen.
With this information, we’ll curate an inventory package from our publisher library containing thousands of deals sourced directly from major platforms and publishers.
With alignment on all campaign details, we move into our campaign launch sequence.
Using both our workflow automation and campaign sequencing, we’ll eliminate a cold campaign start by unifying learnings from KORTX Intelligence with data collection (Axon) to supercharge your campaign strategy and launch.
One of the most important portions of the campaign launch sequence is our KORTX commitment, our promise that your campaign aligns with our brand safety standards.
Monitoring and reporting are crucial for any marketing campaign. We offer a range of media metrics to provide clients with a comprehensive view of the campaign’s performance. Here are the five measurement categories we support at KORTX:
Common KPIs: Sentiment, Lift, and Favorability measured through brand study
Image: Sample brand study metrics
Common KPIs: Impressions, Unique Reach, Frequency Capping, Linear Overlap
Image: Available advanced measurement options for CTV reach and frequency
Common KPIs: Completion Rate, Engagement Rate, AVOC (Audible + Visible on completion)
Image: Sample engagement reporting, including AVOC
Common KPIs: Conversion Rates, CPA, Return on Ad Spend, Online Sales
Image: Sample conversion reporting powered by Axon
Common KPIs: Foot-Traffic, Sales at Retail Locations, Customer Lifetime Value
Image: Sample conversion reporting powered by Foursquare
Regardless of the measurement category, we provide our clients with a comprehensive view of their CTV campaign’s performance, allowing us to gather insights during the Measure phase that we can use to inform and improve future campaigns.
Image: Sample CTV report
Connected TV (CTV) advertising significantly benefits marketers looking to reach highly engaged audiences through targeted and measurable campaigns.
With CTV advertising, marketers can promote their products or services on popular streaming platforms and use advanced audience targeting features to reach customers most likely to purchase.
As more viewers switch to streaming services, CTV is a major ad format businesses must consider for their advertising strategies.
With over one billion user profiles, you can build and segment First-Party audiences that align with your campaign goals.
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Chris Rowell is the Co-Founder and CRO at KORTX.
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