What Is Connected TV (CTV)? And How Does CTV Advertising Work

There are several ways for people to stream their favorite content, whether they’re at home, or on the go. Connected TVs (CTVs) are devices connected to the internet to allow viewers to browse the web, and stream videos and music. A CTV enables users to use streaming apps, such as Prime Video and Amazon Freevee to watch content.

But how does CTV advertising work? In this article, we’ll explore the mechanics of CTV advertising, and examine the different formats, the advertising ecosystem, and the benefits it offers advertisers.

What is Connected TV (CTV) Advertising?

Most people these days are constantly glued to their mobile devices streaming their favorite shows across different streaming platforms, including Netflix, Hulu, or Amazon Prime Video. This is a big opportunity for brands to tap into and connect with these consumers where they’re watching. CTV advertising can help get them started.

CTV advertising is a type of digital advertising that consumers see when they’re streaming content. For instance, it includes ads shown alongside live streams viewed on streaming devices or TV shows. Another typical example is interactive ads that a specific audience sees which requires them to take a particular action. Other categories of video ads include online video (OLV) ads or in-stream ads, which run with video content on websites.

Key CTV Advertising Formats

Image by Frank Rietsch from Pixabay

Linear TV Ads: These are typical television-like advertisements, such as pre-roll ads before a video, mid-roll ads that show during a program, and post-roll ads that play after the content. With the help of CTV platforms, these different ad formats can now be more targeted.
Programmatic Ads: These are types of automated ads that use artificial intelligence and software to buy and sell ads in real-time. Programmatic CTV advertising allows businesses and advertisers to reach targeted audiences based on demographics, viewing behavior, and interests.
Over-the-Top (OTT) Ads: In this type of CTV advertising format, the ads get delivered directly to streaming devices. It bypasses traditional cable or satellite providers. This includes ads that appear within streaming services like Netflix, Hulu, and Amazon Prime Video.
Addressable TV Ads: This advanced form of targeting enables advertisers and businesses to tailor ads to specific households based on their viewing history, demographics, and even household composition.

Overview of the CTV Advertising Ecosystem

The connected TV ecosystem has several key players, here are a few you should know:

Publishers: These are the content owners, such as streaming platforms, broadcasters, and publishers of online video content.
Demand-Side Platforms (DSPs): Advertisers and businesses use these platforms to buy ad space programmatically. DSPs provide tools for targeting, bidding, and managing campaigns.
Supply-Side Platforms (SSPs): Publishers use these platforms to sell their ad inventory to advertisers. SSPs help publishers generate more revenue by connecting them with advertisers.
Data Management Platforms (DMPs): These platforms help to collect, organize, and manage audience data. They allow advertisers to build detailed audience segments and target their ads with greater precision.

Benefits of CTV Advertising

Image by Sammy-Sander from Pixabay

Connected TV advertising offers several benefits to businesses and marketers. One of its main advantages is that it can help businesses reach consumers where they’re already consuming content. It’s a type of advertising that can expand business reach beyond local shoppers in online or physical stores to audiences viewing content from different locations and regions on websites and within videos. If used effectively, CTV advertising can help vendors and advertisers expand their brands’ reach, which could open new and more business opportunities.

Furthermore, connected video advertising can help advertisers and marketers expand their reach beyond linear TV to the cord-cutters and cord-nevers who stream their entertainment instead. There are many places where the ad could be displayed in content, such as Twitch livestreams, premium TV shows, news video apps, or via the internet. Getting started with CTV advertising is easy. Businesses, agencies, and marketers collaborate with content distributors, such as Amazon Ads to display their ads within streaming content. Currently, you can buy Amazon streaming TV ads automatically. This means that the ads are bought and sold digitally by an automated system.

CTV advertising helps advertisers to reach their target audiences with precision. As a business owner or a marketer, you can leverage its data-driven targeting, innovative ad formats, and a focus on viewer experience to connect with viewers and achieve your marketing objectives. We expect to see more exciting opportunities for advertisers to reach new heights in their marketing campaigns as the CTV industry continues to grow.