Whether you recognize it by name or not, you’re definitely familiar with connected TV. It’s the technology that powers streaming services like Netflix and Hulu and allows us to watch our favorite shows and movies on any device with an internet connection.
Connected TV (CTV) has rapidly grown in popularity in recent years, with more and more households cutting the cord on traditional cable subscriptions. Today, 83% of all US households have at least one subscription video-on-demand (SVOD) service.
For advertisers, this opens up a whole new world of opportunities for targeted advertising. CTV platforms are highly targeted, compared to standard television (which requires advertisers to cast a wide net and target broad demographics).
With CTV, advertisers can reach specific audiences based on demographics, interests, behaviors, and more — just like with digital advertising.
CTV ad inventory explained
CTV inventory is quite different from traditional TV advertising due to the digital nature of the content delivery and the diversity of platforms involved.
Here’s a breakdown of how it works:
CTV ad inventory is available on various platforms:
- Streaming services (like Hulu, Netflix, Amazon Prime)
- Smart TV apps
- Plug-in devices like Roku, Apple TV, and Amazon Fire Stick
- Gaming consoles
- Mobile and desktop devices with CTV capabilities
Each platform has its own inventory, which is the space or time slot available for ads.
CTV ad formats
CTV inventory includes different types of ad formats, similar to digital advertising:
- Pre-roll ads are shown before the video content.
- Mid-roll ads are inserted in the middle of a video.
- Post-roll ads are shown after the video content.
- Overlay ads appear as a banner or pop-up over the video content.
- Interactive ads allow viewers to engage with the ad, such as playing games or answering surveys.
The length and style of these ads can vary depending on the platform and the content being viewed. For example, ads on streaming services are usually longer than those on smart TV apps, and ads on children’s programming may be more interactive than those on news programs.
CTV ad inventory is generally bought and sold programmatically. This means advertisers use automated systems to purchase ad space. These systems can target specific audiences based on data such as demographics, viewing habits, and interests, and they can adjust bids in real time based on ad performance and availability.
Sometimes, advertisers can go directly to the platform or content provider to purchase ad inventory. For example, Hulu offers a self-serve platform, where advertisers can buy CTV inventory directly from them.
While direct purchases sometimes offer more control for advertisers, the major downside is the advertiser is limited to the platform’s own inventory and targeting capabilities. This is why many advertisers choose to buy inventory programmatically.
Dynamic ad insertion (DAI)
DAI allows CTV platforms to serve tailored ads to each individual viewer at any given time. This contrasts with traditional TV, where the same ads are broadcast to all viewers. DAI ensures ad inventory is used efficiently and that viewers see ads that are relevant to them.
Evaluate the effectiveness of these tools in delivering consistent but non-intrusive ad experiences.
Evaluating your CTV inventory
By meticulously evaluating your CTV inventory against the following criteria, you can optimize your CTV advertising strategy for better ROI, audience engagement, and brand alignment.
Start by evaluating the number of impressions your ads receive to gauge the exposure they are getting. From there, assess the quality of these impressions by considering the ad placements’ context and relevance. Ensure you count impressions accurately to avoid over or underestimating the reach.
Video completion rates
Monitor how often your ads are watched from start to finish. High completion rates generally indicate that the content is engaging and relevant to the viewer. Analyze completion rates in relation to ad length and content to optimize both for better performance.
Reach by inventory source
Assess the reach of your ads, not just in terms of quantity but also the quality of the audience. Identify which inventory sources (specific streaming services, apps, etc.) are most effective in reaching your target audience. Consider the diversity of the CTV landscape and strive for a mix of sources to maximize your brand reach.
Frequency control tools
Frequency control is crucial in CTV as it maintains a balance between visibility and overexposure. Use tools that limit how often a specific viewer sees your ad to prevent ad fatigue.
Top- and bottom-of-funnel metrics
Include metrics that cover both brand awareness (top-of-funnel) and conversions or sales (bottom-of-funnel). This comprehensive approach helps in understanding both the immediate and long-term impact of your CTV ads.
Top-of-funnel metrics include:
- Engagement (click-through rates)
- Brand lift studies
Bottom-of-funnel metrics include:
- Cost per action (CPA)
Brand safety and CTV ad fraud prevention features
Utilize advanced fraud modeling to detect and prevent fraudulent activities that can inflate metrics or waste ad spend. Implement cryptographic validation to ensure that your ads are being delivered and viewed by real, legitimate audiences. Prioritize brand safety by ensuring your ads appear in appropriate and safe environments, maintaining the integrity of your brand.
As the CTV landscape continues to evolve, so do ad strategies and tools to optimize CTV inventory. If you understand the sources, formats, and measurement criteria for CTV ads, you’ll have a much easier time effectively achieving your marketing goals.
Beyond the basics, continuously evaluating and analyzing ad performance is crucial in staying ahead in the ever-changing world of CTV advertising. So, keep measuring and adapting to make the most of your CTV inventory.