“Streaming” describes the process of watching video content over the internet rather than via broadcast, cable, or satellite TV. It has revolutionized how we watch our favorite shows and movies, but it’s also changing the landscape of television advertising.
As streaming continues to become more mainstream, traditional linear TV ad spots are becoming less effective — viewers can simply fast-forward through them with their remote control (not to mention, that very few young people use cable TV).
CTV and OTT: The New Wave of TV Advertising
Connected TV (CTV) and over-the-top (OTT) are the two new waves of television advertising.
CTV is a form of streaming that refers specifically to ads that are seen on internet-enabled TV devices (such as Apple TV or Roku).
On the other hand, OTT is an umbrella term for any type of video content — including movies and shows — that can be streamed over the internet.
Both forms of streaming offer a wealth of opportunities for advertisers. For one, they both provide access to more targeted and relevant audiences than traditional TV ads. With CTV and OTT, advertisers can use data to pinpoint exactly who their target market is — male/female, age, location, and interests — and create campaigns that are tailored specifically to those individuals.
When comparing OTT vs. CTV, the main difference is their delivery method. CTV offers ads that are delivered within the content — meaning, they are either embedded in the stream or shown as a pre-roll before the user’s selected content. OTT, on the other hand, offers ads in real-time across multiple platforms.
How does CTV Advertising Work?
Connected TV (CTV) advertising operates in a unique ecosystem combining traditional television and digital advertising elements. To understand how CTV advertising works, it’s essential to explore the process of buying and selling ad space and the technology behind it.
1. Buying and Selling Ad Space
CTV ads can be bought and sold through various methods, including direct deals with publishers, private marketplaces (PMPs), and programmatic platforms. Here’s a brief overview of these approaches:
- Direct Deals: Advertisers can establish direct relationships with content publishers or streaming platforms (such as Hulu or Roku) to negotiate and purchase ad inventory. This method allows for greater control over ad placements and guarantees a specific amount of ad impressions.
- Private Marketplaces (PMPs): PMPs are invitation-only marketplaces where select advertisers can access premium ad inventory from specific publishers. These deals often involve higher-quality inventory and more control over ad placements compared to open marketplaces.
- Programmatic Platforms: Programmatic platforms automate the buying and selling of CTV ad inventory using real-time bidding (RTB) processes. Advertisers can set targeting parameters and bid on available ad spaces based on their desired audience. This method offers greater efficiency, scalability, and access to a wider range of inventory.
This directly contrasts with traditional TV advertising, where ad inventory is bought and sold based on in-person negotiations and historical data.
2. Ad Serving and Targeting
CTV advertising relies on advanced technology to serve ads and target specific audiences. Here’s how it works:
- Ad Serving: Once an advertiser has purchased ad space, the ads are served to viewers using ad servers and video players embedded within the streaming platform or app. The ad server selects the most relevant ad based on the viewer’s profile and delivers it during a predetermined ad break or at the start of a video.
- Targeting: CTV advertising offers granular targeting capabilities, allowing advertisers to reach their desired audience based on demographics, interests, viewing habits, and more. This is achieved through a combination of first-party and third-party data collected from user profiles, devices, and content preferences. Some platforms also offer contextual targeting, matching ads to relevant content based on genre, mood, or subject matter.
3. Measurement and Reporting
CTV advertising provides detailed analytics and reporting, allowing advertisers to track campaign performance and optimize their strategies. Key metrics include ad impressions, viewability, completion rates, and conversions. CTV platforms also offer insights into audience demographics, interests, and behaviors, enabling advertisers to refine their targeting and improve the effectiveness of their campaigns.
Is there still a use case for cable TV advertising?
There are still some use cases for cable TV ads, but they depend on the type of product or service you’re trying to promote. Traditional TV ads can still be effective for broad, brand-building campaigns that don’t require precise targeting, such as commercials for a national rollout. They also offer access to larger audiences in certain markets or demographics (e.g., older audiences).
However, when it comes to targeting specific audiences and eliciting direct responses, streaming TV advertising is the way to go. CTV and OTT offer a wealth of opportunities for advertisers — from granular targeting capabilities to detailed analytics and reporting — enabling them to reach their desired audience more accurately and efficiently than ever before.
Streaming TV advertising is revolutionizing the landscape of television advertising, offering access to more targeted and relevant audiences than ever before. With CTV and OTT, advertisers can use data to create customized campaigns that reach their desired audience with greater accuracy. Moreover, streaming platforms’ detailed analytics and reporting capabilities enable them to track campaign performance and adjust their strategies accordingly.
While some use cases exist for traditional cable TV ads, streaming TV advertising is the preferred method for most digital marketers today.