Why Connected TV Is the Next Big Thing in Digital Advertising

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If you are like most of America, you’ve probably cut the cord on your cable TV service. If you’re a young person, you probably never even had to. Nearly 90% of young people prefer to watch their favorite shows and movies online. So, it’s no surprise that connected TV has become the next big thing in digital advertising.

What is Connected TV

What is connected TV? A connected TV is simply a television that is connected to the internet. Because it has online access, you can watch your favorite streaming services like Netflix, Hulu, Amazon Prime, and more without having to subscribe to a cable TV service.

TVs that have this functionality are called smart TVs and most major brands like Samsung, LG, and Vizio offer them at every price point. You can also get a set-top box that will give your regular TV this functionality. The most popular set-top boxes are the Roku and the Amazon Fire Stick.

With hundreds of millions of viewers in America alone, connected TV offers a massive opportunity for advertisers. And, because viewers are watching on their own terms (i.e., when they want, where they want), advertising on connected TV is much more effective than the traditional television commercials that people have become accustomed to ignoring. Visit Here

What are the Benefits of Connected TV Advertising?

There are numerous benefits of advertising on streaming services, but the three most important are reach, engagement, and conversions.

  • Reach: Connected TV gives you the ability to reach a wide audience with your message. Since most people are switching to streaming services, your ad will be seen by people who are actually interested in what you’re selling.
  • Engagement: Connected TV ads are more engaging than traditional TV ads because they are interactive and personalized. Viewers can choose to watch your ad or skip it, and they can also provide feedback that helps you improve your ad for future campaigns.
  • Conversions: The most important metric for any business is conversions, and connected TV advertising has a proven track record of delivering results. Since CTV advertising targets the right people more often, viewers are more likely to take action after seeing your ad.

How Are CTV Ads Different From Commercials?

CTV advertisements look and feel like traditional television commercials, but they’re bought, sold, and measured differently.

Companies buy and sell commercial TV ads through the traditional process of negotiating with a media buyer. This process is manual and can be very time-consuming. In contrast, CTV ads are bought and sold programmatically through ad exchanges.

This means that the process is automated and much faster. It also allows you to target your ads more precisely based on specific demographics, consumer interests, and geographical locations.

In traditional advertising, buyers determine the value of an ad based on the number of people who will see it (impressions). But with CTV advertising, buyers focus on engagement metrics like completion rate, click-through rate, and video views. This shift in focus is due to the fact that CTV ads focus on individual streamers rather than air time and channels.

How Connected TV Identifies and Targets Viewers

There are two primary ways that programmatic advertisers identify and target viewers:

Probabilistic Matching

Through probabilistic matching, advertisers use data like IP addresses and cookies to identify viewers and target them with ads. This method takes multiple devices that are connected to the same IP address into account and uses them to target ads more accurately.

When multiple connected devices exhibit similar behavior, they likely belong to the same person. Thus, these devices would be targeted with the same ads through probabilistic matching because they would be considered a match. Of course, this method is not perfect, but it’s the most common way that programmatic advertisers target viewers.

Deterministic Matching

Through deterministic matching, advertisers use data like email addresses and phone numbers to identify viewers. This method is more accurate than probabilistic matching, but it requires viewers to opt-in to have their data used for marketing purposes.

For example, suppose a streaming service were to sell your data to an advertiser with your sign-in information attached. In that case, they could determine with 100% conviction that you are the one watching the stream, whether it is on your mobile device or your connected TV.

Connected TV Advertising Trends for the Future

Now that you understand how connected TV advertising works, it’s time to learn about some of the trends that are shaping the future of this industry.

1) Advertisements will be short and to the point.

Especially since some advertisements allow for skipping after 5 seconds, it is important to make an impact quickly. Due to this, ad copywriters will need to be concise and get their message across quickly and effectively.

Some examples of short and attention-grabbing advertisements are:

  • A 5-second Google Chrome advertisement that mentions a helpful hack
  • A 15-second Nike advertisement that features a celebrity
  • A 10-second Disney+ ad that shows a clip from a popular movie only available on the platform

2) More CTV ads will be clickable.

As CTV advertising focuses on engagement metrics, we can expect to see more clickable ads in the future. These types of ads allow viewers to take action after seeing the ad, such as visiting a website or downloading an app.

Clickable CTV ads are effective because they:

Increase brand awareness: Clickable CTV ads that lead to a website or landing page can increase brand awareness by keeping the company name in front of the viewer.

Generate leads: CTV ads that are clickable and lead to a form or sign-up page can be used to generate leads for a business.

Bring users to helpful resources: If a CTV ad is clickable and leads to a helpful resource like an article or guide, it can be used to educate viewers about a certain topic.

3) Voice recognition will be used to target ads.

As technology advances, we can expect to see more CTV ads that are targeted using voice recognition. This type of targeting is possible because many CTV devices have voice-activated assistants built into them.

For example, say a viewer asks their CTV device to “find a new movie to watch.” The device could then show a list of movie options, some of which may be sponsored by advertisers. This type of targeting is effective because it is relevant to the user’s interests and needs.

Voice-activated CTV ads are still in their early stages, but we can expect to see more of them in the future as technology continues to evolve.

4) Wearable smart gadgets will be used for retargeting purposes.

Wearable smart gadgets like the Apple Watch and Fitbit are becoming more popular, and we can expect to see them used for retargeting purposes in the future. These devices can be used to track data like health, location, and activity level in real-time.

This data can then be used to show relevant CTV ads to the user. For example, a person who is active and has their fitness tracker set to “weight loss” mode may see ads for healthy food options or workout gear.

5) Mainstream events will broadcast on CTV.

As CTV ad revenue continues to grow, we can expect to see mainstream events like the Super Bowl and the Olympics being broadcast on CTV platforms through exclusive partnerships. Eventually, the revenue potential for large organizations to partner with CTV networks will be too big to ignore.

The Bottom Line

CTV is the next big thing in digital advertising, and there are multiple reasons why. Since programmatic advertising leverages emerging technology, it is poised to be at the forefront of a digital marketing revolution.

Despite its tremendous benefits, however, connected TV has a long way to go. With so much potential for growth, the future of CTV advertising will be nothing short of exciting.

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