What is Connected TV Advertising?

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Learn How Connected TV Advertising Works for Marketers and Brands

Introduction

In the wake of the global pandemic, Connected TV advertising, better known as CTV advertising, has become one of the fastest growing channels of the US digital ad spending market. According to eMarketer, investments in CTV have grown by 40.6% year by year to reach a whopping $9 billion. Traditional TV advertising is officially out - and with expanded offerings, increased scalability and overall convenience and flexibility, Connected TV has risen to become one of the most lucrative and beneficial ad platforms for marketers everywhere.

CTV and OTT are quickly gaining momentum and will be a leading platform for advertising in our digital future. In this blog post, we will break down Connected TV advertising and why it matters today. From its definition, growth, benefits and implementation to GumGum’s CTV advertising solutions, get ready to learn everything you need to know about this increasingly popular advertising platform and how you can use it to boost your video ad campaigns.

What is CTV Advertising?

Before we begin, let’s first understand what  “Connected TV” means - what exactly is it? Connected TV (CTV) is any television device that is used to stream video content over the internet. This usually occurs via downloaded applications that are then used to stream video content such as television shows.


CTV advertising offers marketers data-powered targeting, optimization, reach and the ability to track and measure results. This has made it particularly enticing for marketers looking to reach the right audiences online.

CTV devices are available in the market in many forms.

Smart TVs

Illustration of a Smart TV

A Smart TV is an internet-enabled television set that includes free and paid services such as YouTube, Netflix, Hulu, etc. and eliminates the need for an add-on streaming device.

Connected Devices

Illustration of Connected Devices Available for Streaming and Delivering CTV Ads

Connected Devices are commonly known as over-the-top, or OTT, devices that plug directly into a television set, connect to the internet and contain both free and paid streaming applications such as YouTube, Hulu, etc. regardless if a television is a Smart TV or not. These devices include the Amazon Fire Stick, Apple TV, Roku and Chromecast.

Gaming Consoles

Illustration of Gaming Consoles to Watch CTV Ads

Gaming consoles such as Xbox, Playstation and Nintendo also contain streaming applications that can be used to stream video content on television sets. 

Unlike linear TV, CTV delivers content directly to audiences on demand. Now, audiences can watch premium content, such as movies and television shows, at any time and from any place, without having to pay steep fees for cable television. With TV viewers shifting toward streaming their favorite content on CTV and OTT devices, they are more likely to watch and engage with ad messaging in exchange for paying a much lower price than they would have for traditional TV. This offers a wealth of opportunities for marketers to leverage connected TV ads to reach their target audiences, inspire action and drive revenue.

Benefits of CTV Ads

CTV advertising has quickly become a powerhouse platform to reach audiences. Here are a few reasons why CTV ads work:

Growing Audience

Illustration of Connected TV Audience Growth Above Linear TV

Undoubtedly, there has been astronomical growth in the audience for connected TV. In fact, 82% of households in the US have at least one connected TV device (a penetration higher than cable TV), with a mean of 4.1 devices per connected TV household. Plus, 30% of adults watch streaming content daily while 60% watch it weekly. (Leichtman Research Group) This is huge for brands trying to get their content in front of engaged audiences! Now they can target millennials, Gen Zs and Cord Cutters who do not have traditional TV.

Advanced Targeting Capabilities

Illustration of GPS Targeting for CTV Ads

With connected TV advertising, brands can deliver highly relevant and engaging ads to the right audiences at the right times. Through addressable (GPS), demographic (age, gender, language, etc.) and behavioral (keywords and preferences), advertisers can target audiences based on their mindsets and consumer portraits. Plus, user-registration data also allows for cross-screen targeting!

Consumers are More Open to CTV Ads

Illustration of Viewers Accessing the Apple TV

It’s no secret that consumers are more tolerant to CTV advertising because they are watching content that they are enjoying and which is considerably cheaper than flipping through channels on cable television:  Audiences acknowledge that connected TV ads are a regular part of the streaming experience and are more open and more accepting of them.

Higher Completion Rates

Illustration of Video Completion Rate

According to Statista, in 2020, 95% of video ad impressions viewed on CTV devices were watched till the end in North America, while the average completion rate stood at 80%. This was likely due to brands incorporating more non-skippable ads within the streaming content, which ensured that their messaging was noticed by the audience.

Measurable Progress

Illustration of Tracking of OTT and CTV Advertising and Video Ads Performance

Since Connected TV advertising works programmatically, it offers brands the opportunity to track their success through different methods including video completion rate (VCR) and automatic content recognition (ACR). VCR indicates the number of times that a video plays to the end while ACR enables a smart TV to listen to/see what is playing on TV. Marketers can use VCR or ACR data to gain vital insights into viewership and consumer behavior to better align their ad messaging with what their audiences want to see.

Unique Ad Units

Illustration of Different Types of Video Ads on Laptop and Mobile Devices

CTV advertising gives advertisers the opportunity to use unique and dynamic ad units including pause ads, QR codes and interactive videos so that audiences can interact and engage with the brand content in a more authentic and immediate way.

To leverage the power of attention-grabbing creative, check out GumGum’s creative gallery here.

OTT & CTV Advertising: How They Work Together

What is OTT Advertising?

Over-the-top, OTT or streaming TV, refers to any type of streaming media content delivered over the internet. It includes subscription-based streaming services where consumers can access content on-demand without having to use a traditional satellite or cable provider. Audiences can watch OTT content across a range of devices such as cell phones, gaming consoles and tablets, but the majority of viewing occurs on Connected TVs (CTV). (Amazon) OTT advertising is then simply the streaming ads that appear within this video content that is being watched on various devices. 

Quick-Fire OTV Ads Statistics

Introduction to All the Best OTT Statistics
  • OTT video advertising is set to have ad revenues of $119 billion by 2023, which is 51% of all OTT revenues. (Statista)
  • Media revenue from OTT is expected to surpass $210 billion by 2026. This is nearly double the amount of revenue in 2020, which was $106 billion. (Digital TV Research)
  • When streaming video, 65% of the time it’s done on mobile and TV apps rather than on browsers. (Uscreen)
  • Although advertising generates 51% of the total revenue in the OTT market, subscription customers generate nearly twice as much money per user than users who use ad-supported streaming services. (Statista)

What is the Difference Between OTT & CTV Advertising?

CTV and OTT devices are sometimes used interchangeably, but they are not the same thing. Connected TV is a device that connects to the internet and directly contains all of the streaming applications that users need to watch their favorite video content. On the other hand, an OTT device is a delivery mechanism that connects to a CTV device to deliver content to audiences. 

While OTT advertising typically consists of pre-roll ads and other video advertising that is shown to users while watching content, CTV advertising is placed alongside apps and shows on their connected device. So, while CTV and OTT are related, they are distinct from one another.

Benefits of Over the Top Ads

Here are some of the top benefits of OTT Advertising:

  • Reach Large Audiences: With more CTV owners and rising streaming subscribers, marketers can now reach audiences with their OTT ads.
  • Micro-Target Viewers: While traditional TV advertising usually casts a wider net, OTT ads can be customized for different viewers based on their demographics and interests.
  • Gain Access to Better Data Analytics: From viewing times to completion rates, OTT advertising offers access to more robust data that can be used to make sure ads are proving successful.
  • Guaranteed Brand Safety: As OTT ads are usually delivered against premium content, they are less susceptible to harmful and unsafe content.

Contextual Advertising and Connected TV

With the fast-approaching demise of the cookie, the world of digital advertising is in a state of transition. With tracking past behavior becoming a big no-no, marketers have started to invest in their contextual capabilities, adding them to their CTV and OTT inventory. Not only does contextual advertising offer a respite from using personal data, it also allows brands to place their messaging within relevant content, which is aligned with their target audience and is more likely to cause them to take action.

GumGum, a contextual-first advertising technology company, provides the platform that delivers the next generation of contextual intelligence, industry leading engaging ad creatives, and the ability to measure and optimize advertising campaigns to better understand a consumer’s mindset that captures attention and drives action and outcomes.

Below, you will find GumGum's recent success with CTV and OTT advertising.

GumGum Verity™'s CTV and OTT Capabilities

Introduction to GumGum's CTV and OTT Ad Solutions

GumGum's contextual intelligence platform, Verity™, is the only contextual intelligence solution to fully analyze video content including audio, imagery and metadata to ensure true contextual relevance and brand safety on any screen.

Now, brands can apply Verity™ video processing to their CTV and OTT inventory for an added layer of contextual relevance, safety and scale.

GumGum x IRIS.TV’s CTV Campaign

GumGum recently partnered with the powerful video platform IRIS.TV to drive video performance for a jewelry company. 

GumGum Verity™ and IRIS.TV worked together to drive a strong VCR metric by utilizing Verity™ Video PMPs to target contextually relevant videos related to fashion, parenting, shopping and more. In addition to targeting these IAB contexts, the Verity™ team created a custom Mother’s Day segment for this advertiser.

Results:

Together, GumGum and IRIS.TV exceeded the client’s goal, generating a VCR of 98.54%. 

The Verity™ Video PMP campaign also outperformed the advertiser’s two other CTV providers, achieving a higher VCR than both and a lower CPM than one.

Illustration of GumGum's CTV Ad success

For more insights, please click here.

Do you want to learn more? Request a personalized demo to get started on your next Connected TV campaign!

Conclusion

In our rapidly changing digital world, brands, marketers and advertisers now must meet consumers where they are. Gone are the days of sitting in front of a traditional TV - instead, we are constantly streaming TV and video content on our phones, our iPads and our Smart TVs from different continents, in different time zones all over the world. CTV advertising offers an unparalleled opportunity to tap into this growing audience - by not only serving ads where people are but serving ads that are contextually relevant, engaging and will spark action.

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