Advanced TV: Your Comprehensive Guide to CTV, OTT, and Channel Best Practices
Given the rapid evolution of technology, consumer behavior, and media consumption patterns, traditional marketing approaches no longer suffice when it comes to capturing and retaining audience attention. Marketing organizations looking to grow their brand’s market share must constantly be looking to innovate.
Advanced TV—encompassing streaming services, over-the-top (OTT) devices, connected TVs (CTV), addressable TV, free ad-supported television (FAST), programmatic TV, and more—presents a variety of opportunities for marketers to engage with their target audiences in more personalized, immersive, and impactful ways. However, there’s a lot of nuance to understand when it comes to this fast-growing (and even-faster-evolving) channel. In this article, we’ll explore the fundamentals of advanced TV advertising, its impact on audience engagement, and how marketers can make the most of this tremendous channel.
What Is Advanced TV Advertising?
Advanced TV advertising is an overarching term that encompasses non-traditional TV advertising—specifically advertising that occurs before, during, or after a video stream on the internet. As consumption of TV and movies via streaming services increases, alongside overall growth in online video consumption, advanced TV continues to cover a growing array of advertising opportunities, formats, and buying modalities.
Marketers are likely familiar with many of the terms encompassed by advanced TV—concepts including addressable TV, OTT advertising, connected TV (CTV), programmatic TV, and more. While there is some overlap to these terms, as well as their associated advertising opportunities and formats, it’s important for brands and agencies to have a baseline understanding of the role they play in the grander scheme of advertising.
Examples of Advanced TV Advertising and Formats
The realm of advanced TV spans a variety of ad formats and buying modalities, each of which offers unique benefits within the context of an omnichannel marketing campaign. Let’s look at some examples.
Connected TV Ads
CTV advertising refers to the placement of ads on internet-connected television devices or platforms. These platforms include streaming services like Hulu, Netflix, and Amazon Prime Video, as well as devices such as smart TVs, gaming consoles, and streaming media players like Roku or Apple TV.
CTV advertising allows advertisers to reach viewers who are increasingly consuming video content through digital streaming rather than traditional cable or satellite TV. It offers targeting capabilities similar to digital advertising, allowing advertisers to deliver personalized ads to specific audiences based on demographics, interests, and behavior. CTV advertising offers benefits such as precise targeting, measurable results, and the ability to reach cord-cutters and cord-nevers who do not subscribe to traditional TV services.
For example, let’s say a fashion brand wanted to reach its audience using TV ads,. The brand could roll out ads within popular streaming services featuring its latest collection, and it could specifically target those ads to viewers who have shown interest in fashion-related content or have previously visited the retailer’s website.
Over-the-Top Ads
Over-the-Top (OTT) advertising refers to the placement of ads within streaming content that is delivered over the internet, bypassing traditional cable or satellite TV. OTT platforms include services like Hulu, Sling TV, and YouTube TV, which can be accessed on a variety of devices such as Smart TVs, gaming consoles, mobile phones, and tablets. This format allows advertisers to reach viewers who consume content through these modern channels, often referred to as cord-cutters or cord-nevers.
OTT advertising combines the broad reach of traditional TV with the precision targeting capabilities of digital advertising. Advertisers can deliver personalized ads based on user data such as demographics, viewing habits, and online behaviors. This ensures that ads are relevant to the viewer, increasing the likelihood of engagement and conversion.
For example, a fitness apparel brand looking to reach health-conscious consumers might choose to advertise on an OTT platform like Hulu. The brand could target ads to viewers who watch health and fitness-related content, showcasing their latest line of workout gear. The ad might feature testimonials from fitness influencers, highlight the technical features of the apparel, and offer a discount code for first-time customers to drive immediate sales.
Free Ad-Supported TV Ads (FAST)
FAST TV advertising involves placing ads on platforms that offer free, ad-supported streaming channels. These platforms function similarly to traditional linear TV but are accessible via internet-connected devices, providing a curated selection of programming with scheduled ad breaks. Unlike subscription-based services, FAST platforms rely on advertising revenue to deliver content to viewers at no cost.
FAST TV advertising allows advertisers to reach a wide and diverse audience, including those who have shifted away from traditional TV in favor of streaming options. This format ensures that ads are non-skippable, increasing viewability and engagement. FAST platforms also offer opportunities for advertisers to target specific demographics and interests based on the platform’s user data.
For example, let’s say a consumer electronics company wants to promote its latest smart home devices. By advertising on a FAST platform like Pluto TV, the company can target ads to tech-savvy viewers who regularly watch technology or home improvement channels. The ad might showcase the smart home devices’ features, demonstrate how they can be integrated into a modern home, and highlight special promotions or bundles available exclusively through the advertiser’s website.
Addressable TV Ads
Addressable TV advertising refers to a form of targeted advertising delivered to specific households or viewers based on various data points such as demographics, interests, location, or past viewing behavior. Unlike traditional TV advertising, which broadcasts the same message to all viewers watching a particular channel at a given time, addressable TV advertising allows advertisers to customize and personalize their messages to specific audience segments. When users set up their set-top boxes, smart TVs, or other devices they opt-in to share their viewership habits and preferences data, yielding a completely privacy-compliant experience. This data is then collected, analyzed, and used for more targeted, personalized ads.
Addressable TV advertising offers several benefits, including increased relevance and effectiveness of ads, the ability to measure and track ad performance more precisely, and the opportunity for advertisers to reach niche audiences with tailored messages.
For example, let’s say a car manufacturer wanted to target households that are in the market for a new vehicle. Using data from various sources such as online browsing history, past purchases, and demographic information, the car manufacturer could identify households that match its target audience profile. Addressable ads could then be tailored to appeal to the specific interests and needs of these households. For example, the ad might showcase the latest features of a particular car model, highlight special offers or discounts available in the viewer’s area, and even provide personalized recommendations based on the viewer’s past behavior or preferences.
Programmatic TV Ads
Programmatic TV advertising refers to the automated buying and selling of TV advertising inventory using software platforms and algorithms. It applies principles similar to programmatic advertising in digital channels, adapted for the TV space. In programmatic TV advertising, advertisers use data and technology to target specific audience segments and optimize ad placements in real-time—and in a scalable way. This approach allows for more precise targeting, increased efficiency, and improved ROI compared to traditional buying methods. Programmatic TV advertising also enables dynamic ad insertion, allowing different ads to be shown to different audience segments watching the same program.
For example, a tech brand launching a new smartphone could use programmatic TV advertising to target households with individuals who have recently searched for smartphones online or have shown interest in similar products. The ads could be scheduled to air during programs across a variety of platforms and content popular among tech enthusiasts or during time slots when the target audience is most likely to be watching TV or online video.
How Important Is Advanced TV Advertising?
The importance of advanced TV advertising continues to grow within the modern marketing landscape, both in terms of how it aligns with consumer behavior as well as its ability to drive more-meaningful engagement with audiences. Viewers continue to spend more time watching CTV. According to eMarketer, in 2024, U.S. adults will average 123.4 minutes per day with CTV. As a result, the channel will continue to see double-digit ad spend growth in the coming years. In 2024, CTV ad spending will reach $30.1 billion and account for 1 in 10 U.S. digital ad spend dollars. By 2027, U.S. CTV spending is expected to reach nearly $41 billion.
Much of this growth is in recognition of the fact that advanced TV advertising offers a number of advantages over traditional TV advertising methods. For example, brands report achieving ROI with CTV ads that is 30 percent higher than for other marketing channels and tactics. Meanwhile, when comparing different types of viewers, research has found that 23 percent of CTV viewers have made a purchase after seeing an ad versus 12 percent of linear viewers. Likewise, 44 percent of free ad-supported streaming TV (FAST) viewers demonstrate high TV ad receptivity, surpassing receptivity rates among viewers of both linear and subscription services.
Challenges and Controversies in Advanced TV Advertising
Of course, as with any emerging advertising opportunity, advanced TV is not without its challenges. As viewers consume content through advanced TV platforms, their viewing habits, preferences, and even personal information can be collected and used to tailor advertisements. This targeted approach, while promising personalized experiences, raises red flags regarding consumer privacy.
Concerns revolve around the potential for intrusive tracking, unauthorized data sharing, and the risk of sensitive information falling into the wrong hands. Moreover, the opacity surrounding data collection practices and the lack of transparency in how this data is used further exacerbate privacy apprehensions. As advanced TV advertising continues to evolve, it’s important for stakeholders to prioritize robust data protection measures, transparent policies, and consent mechanisms to uphold consumer trust and safeguard privacy.
For advertisers in particular, it’s important to carefully navigate ethical dilemmas and maintain transparency within advanced TV advertising campaigns. This can be done by prioritizing transparent data collection practices. In general, advertisers should work with publishers who obtain explicit consent from viewers before collecting and using their personal data for advertising purposes, and advanced TV advertising is no exception.
In addition, there is still work to be done when it comes to bridging the gap between advanced TV platforms and the linear world. However, this cross-media conversion is becoming more possible, particularly as data clean rooms answer for cross-platform data communication. Clean rooms enable companies to combine data from various platforms and services. The data remains encrypted, making it impossible for anyone to access personally identifiable information. In this way, data clean rooms can help to solve for some of the challenges related to measuring and optimizing outcomes in advanced TV efforts.
Benefits of Advanced TV Advertising
Advanced TV advertising offers a variety of benefits for advertisers seeking to maximize the efficiency and effectiveness of their campaigns. These include:
Precision Targeting
Advanced TV advertising allows advertisers to target specific audience segments based on demographic, behavioral, and geographic data. By harnessing data from various sources, advertisers can create highly tailored campaigns that resonate with their intended audience. This precision targeting not only ensures that advertisements are delivered to the most relevant viewers but also minimizes wasted ad spend by avoiding reaching those unlikely to convert.
Increased Reach
Advanced TV allows advertisers to reach audiences across a variety of platforms, including connected TVs, streaming services, and digital devices. Unlike traditional linear TV advertising, which is limited by predefined time slots and geographic regions, advanced TV advertising leverages digital platforms and connected devices to reach viewers across a variety of channels and devices. This expanded reach not only allows advertisers to tap into new and previously untapped audiences but also enables them to engage with consumers who may have shifted away from traditional TV consumption toward streaming services and connected devices.
Measurable Results
Advanced TV advertising offers sophisticated measurement and analytics capabilities, allowing advertisers to track and analyze the performance of their campaigns in real-time. Unlike traditional TV advertising, which often relies on estimates and sample data for performance evaluation, advanced TV advertising offers robust measurement tools that provide advertisers with granular insights into campaign effectiveness. By leveraging advanced analytics and tracking technologies, advertisers can accurately measure key performance indicators such as reach, frequency, engagement, and conversion rates.
Overall, advanced TV advertising represents a powerful tool for advertisers to deliver impactful, targeted campaigns that drive tangible business outcomes in an increasingly fragmented media landscape.
How Does Advanced TV Advertising Work?
So, what does the process of planning, executing, and measuring advanced TV advertising campaigns look like in practice? Below are the 3 key steps that brands and agencies should be sure to follow.
1. Planning
Planning an advanced TV campaign requires a strategic approach that takes into account various factors to ensure its success. Firstly, defining clear campaign objectives and outlining a budget is essential; whether it’s increasing brand awareness, driving sales, or expanding market reach, having specific goals in mind helps guide the rest of the planning process.
Next, identifying the target audience is crucial; advanced TV advertising offers precise targeting capabilities, so understanding who your ideal consumers are—their demographics, interests, and viewing habits—is paramount.
Once the audience is defined, selecting the appropriate channels and platforms for reaching them becomes essential; this could include connected TVs, streaming services such as FAST or OTT platforms, or programmatic TV platforms.
2. Execution
Executing an advanced TV campaign requires advertisers to develop creative assets tailored to resonate with the target audience, ensuring they align with the campaign objectives and messaging strategy. Consider unique creative formats such as QR codes, video skin, shippable CTV unit, social to CTV, Samsung first screen unit, pause ads, or voice-to-action unit to stand out among competitors and drive action from consumers.
Agencies must then negotiate ad placements and secure inventory, taking into account factors such as ad formats, frequency capping, and targeting parameters. Implementing robust tracking and measurement tools enables agencies and advertisers to monitor campaign performance in real time, allowing for timely adjustments and optimizations to maximize impact and ROI.
3. Measure
Measuring the effectiveness of an advanced TV campaign requires a comprehensive approach that leverages a combination of metrics and analytics tools to evaluate various aspects of its performance. First, assessing reach and frequency metrics helps determine the extent to which the campaign has successfully reached the target audience and managed exposure levels. Audience engagement metrics, such as ad completion rates, click-through rates, and interaction rates, provide insights into how effectively the creatives are resonating with viewers and driving engagement. Additionally, tracking conversions and attribution metrics allows advertisers to understand the impact of the campaign on driving desired actions, such as website visits, purchases, or sign-ups.
As the advertising landscape continues to evolve, advanced TV advertising stands at the forefront, empowering advertisers to deliver impactful and cost-efficient campaigns that drive tangible business outcomes in an increasingly digital world.
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