Capturing consumer attention in a world saturated with advertisements is complex. But the emergence of Connected TV (CTV) has opened a world of possibilities for digital marketers, advertisers, and businesses alike. By combining the reach of television with the audience targeting and measurement capabilities of digital advertising, CTV presents itself as a powerful tool to engage audiences like never before. In this blog post, we’ll delve into the emerging realm of CTV and uncover its potential to revolutionize your digital marketing strategy.
What is CTV?
Connected TV (CTV) refers to television sets that are connected to the internet, allowing viewers access to a range of streaming services, apps, and other online content directly on their TV screens.
Unlike traditional television, CTV offers viewers more flexibility in terms of when and what they want to watch. With an array of streaming service options like Netflix, Hulu, Amazon Prime Video, YouTube TV, Sling TV, and more, viewers have the freedom to curate their entertainment experience based on their preferences.
How does CTV Advertising work?
- Connected TV (CTV) advertising delivers targeted video ads to viewers through internet-connected television sets or devices, such as smart TVs or streaming media players.
- CTV advertising uses programmatic technology to automate the buying and selling of ad inventory, allowing advertisers to reach specific audiences and optimize their campaigns.
- Advertisers can leverage data-driven targeting capabilities to reach their desired audience segments based on demographics, interests, location, or viewing behavior.
- CTV ads typically serve during commercial breaks within streaming content, similar to traditional or linear TV advertising, but with the advantage of targeting and measurement capabilities.
- CTV platforms offer ad formats such as pre-, mid-, or post-roll ads and interactive or clickable ads, allowing viewers to engage with the content or take desirable actions. Ad performance is tracked through various metrics like impressions, completion rates, and conversions, providing valuable insights for campaign optimization.
1. Over-the-top (OTT)
Over-the-top (OTT) means delivering video, audio, and other media content over the internet, bypassing traditional distribution channels like cable or satellite TV providers. OTT platforms enable users to access and stream content directly through internet-connected devices such as smart TVs, gaming consoles, smartphones, tablets, laptops, and more. These platforms offer a wide range of on-demand content, including movies, TV shows, live events, and original programming.
OTT services often require a subscription or offer a combination of free and premium content. Popular OTT platforms include Netflix, Amazon Prime Video, Hulu, and Disney+, providing viewers with convenient, personalized, and flexible ways to consume media content according to their preferences and schedules.
OTT vs. CTV
OTT and CTV differ in how they deliver content in streaming media. Here’s a summary of their differences:
OTT refers to platforms that deliver media content over the internet, bypassing traditional distribution channels. It allows viewers to use various platforms and devices to watch, including smartphones, tablets, computers, and smart TVs. OTT services provide on-demand access to multiple types of content, including movies, TV shows, and original programming. Examples of OTT platforms include Netflix, Hulu, and Amazon Prime Video.
CTV refers to the device used to stream video content: smart TVs and streaming media players. CTV offers a more TV-like experience, allowing viewers to watch streaming content directly on their big screens.
CTV advertising delivers targeted video ads before, during, or after the viewer’s streaming content. This enables advertisers to achieve a TV-like reach while benefiting from advanced targeting and measurement capabilities.
While OTT encompasses a broader spectrum of streaming media services across more devices, acting as the larger umbrella, CTV focuses explicitly on internet-connected smart TVs. CTV is OTT, but OTT can be viewed on any device (e.g., watching Hulu on a TV, phone, or laptop is all OTT — it’s only CTV when the audience is watching Hulu on the TV).
2. Ad Supported Video on Demand (AVOD)
Ad Supported Video on Demand (AVOD) is a video streaming service model where users can access and watch digital content for free, supported by advertisements. AVOD platforms stream a wide range of movies, TV shows, and other on-demand video content without requiring a subscription fee. Instead, these services monetize the content by displaying advertisements at various intervals during playback.
Users can enjoy the content for free, while advertisers leverage the platform’s audience to reach their target demographic through targeted ads. AVOD platforms provide a mutually beneficial ecosystem, allowing viewers to access free content while advertisers gain exposure and engagement opportunities. Examples of AVOD services include YouTube, Tubi, and Crackle.
3. Free Ad-Supported Streaming TV (FAST)
Free Ad-Supported Streaming TV (FAST) is a streaming service that offers access to various TV shows, movies, and other video content without a subscription fee. FAST platforms are supported by advertisements, allowing viewers to enjoy the content at no cost.
These services stream a range of channels or curate a library of on-demand content that users can stream on various devices. FAST platforms differ from traditional cable or satellite TV as they leverage internet connectivity to deliver content over-the-top (OTT) without requiring a cable subscription. Examples include Pluto and Sling.
4. Subscription Video on Demand (SVOD)
Subscription Video on Demand (SVOD) is a streaming service where users pay a recurring fee to access a vast digital content library, including movies, TV shows, and more. Unlike traditional television, SVOD allows users to watch content on-demand, anytime, and on multiple devices. These services often offer original programming, personalized recommendations, and ad-free viewing. Popular SVOD platforms include Netflix, Amazon Prime Video, Hulu, Disney+, HBO Max, and Apple TV+.
5. Transactional Video on Demand (TVOD)
Transactional Video on Demand (TVOD) is a video streaming model where users can access specific content by paying a one-time fee for each piece of content. With TVOD, users can rent or purchase movies, TV episodes, or other video content on a pay-per-view basis.
Unlike SVOD, which operates on a subscription model, TVOD allows users to directly access the content they want without committing to a recurring fee. Examples of TVOD services include iTunes, Google Play Movies, and Amazon Instant Video, offering a convenient and on-demand way to access digital content for a specific duration or as a permanent purchase.
6. Multiple Video Programming Distributor (MVPD)
Multiple Video Programming Distributor (MVPD) refers to a service provider that delivers multiple channels of video programming to subscribers. MVPDs are typically cable or satellite TV providers that offer consumers bundled packages of television channels for a monthly fee. These providers transmit the content through their distribution infrastructure, such as cable lines or satellite signals.
They offer various programming options, including live TV, on-demand content, and premium channels. MVPDs have traditionally been the primary means of accessing television programming, but they now face competition from streaming services and other digital platforms that offer similar online content.
7. Private Marketplaces (PMP)
Private Marketplaces (PMP) are digital advertising platforms that connect publishers and advertisers in a controlled, exclusive environment. PMPs offer a curated inventory of ad space or impressions that are available to a select group of advertisers or buyers.
These marketplaces provide more transparency than open ad exchanges, allowing publishers to maintain control over their inventory and pricing, enabling advertisers to access premium ad placements with specific targeting options. PMPs offer a secure and controlled way for publishers and advertisers to collaborate, fostering direct relationships and improving ad performance and efficiency.
8. Video on Demand (VOD)
Video on Demand (VOD) refers to a digital content delivery system that allows viewers to watch video content at their convenience. VOD services provide a library of movies, TV shows, documentaries, and other video content that users can stream on-demand through various CTV devices.
Unlike traditional television or cinema, VOD eliminates the need for scheduled programming, allowing viewers to choose what to watch and when. It offers flexibility and convenience, enabling viewers to pause, resume, or rewind content as desired. VOD has become increasingly popular with the rise of streaming platforms like Netflix, Hulu, and Amazon Prime Video, providing a vast selection for subscribers to enjoy anytime, anywhere.
9. View-Through Rate (VTR)
View-Through Rate (VTR) is a metric used in digital advertising to measure the percentage of users who view an ad but do not interact with it by clicking or taking immediate action. To calculate VTR, divide the number of ad impressions viewed to completion by the total number of impressions served, and multiply by 100. It provides insights into the effectiveness of video advertisements in capturing and retaining viewers’ attention, as well as overall campaign performance.
A higher VTR indicates that more viewers watched the entire ad, suggesting better engagement and potential brand exposure. Advertisers and marketers often use VTR to assess the performance and impact of video ad campaigns, optimize ad spending, targeting, and creative strategies, and evaluate the overall success of their ad placements.
10. Video Ad Serving Template (VAST)
Video Ad Serving Template (VAST) is a standardized XML-based protocol used in digital advertising to deliver video ads across different players and platforms. VAST defines the structure and format of the ad creatives, including the video file, companion banners, click-through URLs, and other interactive elements.
Advertisers can leverage VAST to deliver to various video players and support different ad formats, such as pre-, mid-, and post-roll. It also enables essential functionalities like ad tracking, ad skipping, and ad verification. By using VAST, advertisers can streamline the distribution of video ads and enhance the viewer experience across a wide range of video platforms and devices.
Knowing the ins and outs of CTV advertising is crucial for marketers to engage their target audiences. By embracing the intricacies of CTV, you can leverage its targeting capabilities, interactivity, and measurement tools to create impactful campaigns that resonate with viewers. Division-D can help your business understand and unlock CTV’s potential to elevate your digital marketing efforts. Contact us today!