Connected TV Advertising: Everything You Need to Know in 7 Minutes

Connected TV advertising, also called CTV advertising, is the act of promoting a business via ads that appear on video streaming devices, like Roku or Apple TV. Keep reading to learn more about connected TV advertising!

CTV advertising: A new form of TV commercials

Streaming services dominate American life today, and for that reason, they’re a fantastic marketing opportunity for your business. Read on to learn how you can harness connected TV advertising to reach more users!

It’s been a long day at work, and you’re ready to spend your evening relaxing at home. So, what do you do once you’re there? If you’re like many people, you kick back on your couch and turn on the TV.

TV has long been one of the most common ways for people to spend their time, and for that reason, it’s also long been a primary advertising opportunity for businesses like yours. But where cable commercials were once the ideal advertising tactic, today it’s connected TV (CTV) advertising.

CTV ads are perfect for reaching users right where they love to spend their time. But what is connected TV advertising, and how can you use it to reach your target audience?

Read on to find out more. Then subscribe to Revenue Weekly — our email newsletter — to receive more digital marketing tips from the agency with over 1020 client testimonials!

What is connected TV advertising?

Connected television advertising, or CTV advertising, is a form of promotion that takes place on video streaming devices.

“Connected TV” refers to any device that allows you to stream video content like shows and movies through a television. Examples include:

  • Roku
  • Xbox
  • Apple TV
  • And more!

So, CTV advertising involves advertising through those devices, usually in the form of video ads that play before and during the primary streaming content.

Connected television vs. OTT

You may have also heard of the term “over-the-top (OTT).” This term is very similar to connected TV, but there are some key differences between OTT vs. CTV advertising.

OTT refers to the broader concept of streaming video content from the Internet. It’s not specific to TV and could represent anything from a cat video on YouTube to The Fellowship of the Ring on Netflix.

Connected TV, meanwhile, refers specifically to video content streamed through a television rather than on a computer or mobile device. It can still include YouTube videos, but it usually represents richer content like TV shows and films — the sort of thing you might see on cable TV.

Why do you need CTV advertising?

CTV advertising is a worthwhile investment because  it’s quickly emerging as the successor to cable TV ads.

For decades, TV commercials had been one of the best ways to reach people. Today, though, many people are quitting cable to transition entirely to streaming. So, to continue reaching that audience, the best move is to switch over to CTV ads.

People spend countless hours on their favorite streaming services, so by advertising there, you’re guaranteed to reach users — particularly since those users can’t skip CTV ads. They have to sit through them in order to view their content, just like with cable TV commercials.

How does CTV advertising differ from other video advertising?

The main difference between CTV ads and other video advertising methods — such as YouTube in-stream ads — is in the device. As the name suggests, CTV ads typically appear on televisions rather than computers or mobile devices.

Because of that, they’re intended purely for awareness. For people using laptops, you might run ads that are interactive and lead users to a landing page when they click. But people aren’t doing any clicking on a TV, so you should focus your ads around brand awareness instead.

How does connected TV advertising work?

For the most part, the process of running CTV ads is the same as running other types of paid advertising online.

You work through specific ad networks to create your video ads and try to outbid your competitors to earn ad spots. CTV advertising is a form of programmatic advertising, so you’re competing for ad space. That means you need high-quality ads and strategic bids.

Additionally, programmatic TV advertising comes with the benefit of letting you target specific audiences. You can target demographics by age group, location, and more. That’s a significant improvement over traditional TV commercials.

Finally, you’ll naturally want to reoptimize your ads to better reach your target audience. A particular ad might not perform as well as you want, in which case you can try out a different variation of the same ad, or create a new one altogether. 

Programmatic TV advertising metrics

To see how well your ads perform, you’ll need to pay attention to specific metrics. From there, you’ll analyze those metrics to see where you can improve your campaigns.

The metrics you track in your CTV advertising won’t be the same as the ones you track in other types of programmatic TV advertising. Normally, you’d look at metrics like click-through rate (CTR) and conversion rate. But those metrics don’t apply to CTV ads.

Instead, you’ll want to look at metrics that tell you something about the ads’ performance. 

Here are four connected TV advertising metrics to track and analyze:

Ad reach

One of the first things you’ll want to know about your ads is how many people they reach. How large is the audience viewing your ads?

Most platforms should allow you to see this metric, which is referred to as ad reach or impressions. It lets you know how many times your ad popped up on someone’s screen, so you can see whether you’re reaching a large or small audience.

Ad reach isn’t the most valuable metric on this list by itself, but it’s critical for calculating some of the other, more useful metrics. For that reason, you’ll want to keep up with it.

Video completion rate (VCR)

Raw impressions aren’t everything. Just because your ad shows up in front of someone doesn’t mean they’ll watch it all the way through — they might close out of it. To get a better sense of how many people are engaging with your ads, you should look at video completion rate (VCR).

This metric measures how many people watch your video ads completely. More specifically, it measures that number against your ad reach, telling you what percentage of your ad viewers watch the whole thing.

So, if your ad displays to 1500 people, and 900 of them watch it all the way through, you’d have a VCR of 60%.

Cost per completed view (CPCV)

Another metric you’ll want to track is cost per completed view (CPCV). This metric allows you to see how much you’re spending on your CTV ads. Rather than showing you how much you’re spending overall — which doesn’t tell you much — it shows you how much you’re spending per completed ad.

In other words, CPCV looks at your overall spending and divides it by the total number of people who watched your ads all the way through. The result tells you how much money you’re spending on each of those people.

Notice that CPCV doesn’t factor in people who saw your ad but closed out of it partway through, because they aren’t likely to turn into leads. It doesn’t matter that 1500 people viewed your ad if only 300 watched it all the way through — only those 300 are worth the money you’re spending.

So, if you find that you’re spending too much money per completed view, you might want to think about reoptimizing. 

Cost per mille (CPM)

A final metric to keep up with is cost per mille (CPM), which is very similar to CPCV. Both measure how much you’re paying for your completed views.

The difference is simply in scope. Whereas CPCV measures how much you pay for each individual view, CPM measures how much you pay per thousand views — “mille” in this instance refers to a thousand views.

It’s simple to find this metric — just multiply your CPCV by 1000. The reason you might want to know CPM in addition to CPCV, though, is that it lets you view your campaigns on a larger scope, seeing things in relation to the larger picture.

For instance, maybe your CPCV doesn’t seem that high, but when you view it on the scale of CPM, you suddenly realize how much you’re spending on your views and decide to reoptimize.

Time to Level Up Your Sales

Our long list of services helps you grow every aspect of your business with marketing strategies that are proven to increase bottom-line metrics like revenue and conversions.

In the past 5 years, we’ve managed more than 12.9 MILLION transactions across our client base.

WebFX can help you optimize your connected TV advertising campaigns

Connected TV advertising can be complex if you don’t know what you’re doing — and even if you do know what you’re doing, you can still use a helping hand, particularly since new CTV trends emerge each year! That’s why WebFX is here.

When you partner with us for our OTT and connected TV services, you’ll get help optimizing your campaigns to drive maximum results. We have over 25 years of digital marketing experience, so we know exactly what it takes to drive revenue for your business.

To get started with us, just call 888-601-5359 or contact us online today!