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What Is CTV Advertising? How It Works And Benefits To Your Brand

The days of turning to the TV Guide to plan our Friday night entertainment are long gone. How we watch television has changed dramatically thanks to the rise of streaming services and their influence on audience viewing habits. And these streaming-only services will only grow in popularity as TV viewers continue to cut the cord.

As a result, a new kind of advertising has taken off: connected TV advertising (CTV advertising). The continued decline in traditional linear TV and cable TV creates new opportunities for targeted CTV advertising through connected Internet devices (aka Smart TVs).

Today, we'll explore what CTV advertising is, how it works, how it can benefit your business, demonstrate its ROI through an SLTC case study, and what the future holds for this emerging marketing medium. So don't touch that dial; the show's about to begin!

What is CTV advertising, and how does it work?

CTV advertising is a video advertisement displayed through a Smart TV or Smart device. Research shows that 80% of households in the United States own at least one Smart device (i.e., Roku, Apple TV, Amazon Fire Stick, Chromecast), providing ample opportunity for advertisers to reach a rapidly growing and targeted audience.

With CTV advertising, you can communicate with consumers who are most likely to purchase your products through some of the most popular streaming services.

What are the benefits of CTV advertising?

CTV offers modern marketers a unique advertising opportunity as streaming services and devices become more prevalent in the home entertainment market. CTV advertising provides a number of benefits, including:

Higher ad completion rate

CTV has high ad completion rates because most streaming services restrict skipping. As a result, your brand can get ample exposure for your content, increase brand recognition, and foster a connection with your target audience.

More robust data

IP addresses and watch history can provide valuable information about your audience's behavior, viewing habits, and interests. You can even track how many visitors took action after viewing your ad. With this data, you can gain valuable insights into what motivates viewers to take action on your ad and engage with your brand.

More cost-effective than OTT spend

OTT (over-the-top) advertising is frequently confused with CTV advertising, but the two are different. OTT advertising targets audiences on any device with an internet connection, such as smartphones, desktops, tablets, and laptops.

But one of the main downsides of OTT advertising is its limited reach. For example, if you're advertising on a streaming platform but the viewer is on their smartphone, laptop, or tablet, then only one person is likely to see your ad.

However, on Smart TVs, it's common for multiple people to watch the same content. Your target audience likely watches television with family and friends, thereby increasing reach and reducing advertising costs. With this in mind, CTV advertising allows you to reach a wider audience while lowering your CPM (cost per mille).

Track and measure your campaign results in real-time

Traditional advertising methods, such as television, radio, and print ads, provide limited feedback and data on the success of your campaign. But with CTV advertising, it’s easy to track and analyze your campaign results. You can access essential audience data, like viewer demographics as well as in-depth campaign metrics, such as cost per click (CPC), cost per completed view (CPCV), and video completion rate (VCR).

Using this information, you can analyze your campaign's performance, identify areas for improvement, and fine-tune your CTV advertising campaign to achieve a higher ROI.

Does CTV advertising work?

From increasing brand awareness, and conducting audience research, to driving conversions and sales, CTV advertising can deliver real results for your growing business. But where’s the proof? We have it here. As part of our efforts to promote and drive sales for Tracy Anderson's new MYMODE workout program, we created a home-run CTV campaign. The results? 4.2 million campaign impressions, a 126% increase in overall traffic, and an 86% increase in average conversion rate, generating $132k in total revenue.

"Agencies and their clients are using CTV advertising to drive performance right alongside their paid search and social campaigns," said Matt Collins, director of product marketing at MNTN. "That's because, with the right approach, CTV is easy and affordable to test. Marketers can measure it precisely, learn, and scale, all while delivering the brand safety of premium streaming inventory."

What is the future of CTV advertising?

Traditional TV advertising allows brands to reach millions of viewers at once. But the major downside of this method is its limiting targeting capabilities and ineffective campaign measurement metrics. Even within the past decade, viewing habits have drastically changed and streaming is firmly embedded in the entertainment zeitgeist.

According to the Pew Research Center, only 56% of Americans say they watch TV via cable or satellite (down from 76% in 2015). Additionally, 71% of those who don’t use cable or satellite say it’s because they can access the content they want online.

As folks continue to ditch cable, those wasted impressions and lack of measurable performance are becoming a greater concern for brands. As a result, advertisers are following their viewers over to CTV. As eMarketer reports, ad spending on linear and CTV combined will increase from $87.24 billion this year to more than $100 billion in 2026 due to the surge in CTV viewing.

Is CTV advertising right for your business?

CTV provides your brand greater flexibility and control over audience insights, metrics, and targeting compared to linear TV and traditional marketing channels. What does that mean for your business? By incorporating CTV advertising into your marketing strategy, you can connect with your audience and drive tangible results for your business without burning a hole through your budget.

If you’re unsure where to begin, we’re here to help! Our team believes that harnessing the latest marketing technology can propel our clients into the next digital age. Contact the SLTC team today and discover how collaborating with an award-winning boutique digital agency can maximize your brand's marketing budget and ROI.


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