Is Connected TV Taking Over Traditional TV Advertising?

We are all witnesses of the rise of digitized television, and we all know what a Squid Game is and who Joe Exotic is. However, not many of us know how to use this rise of streaming TV and incorporate it into our marketing strategies.

There is no judgment in that; we all had to go through the last few years somehow. 

While some of us were stress eating and binge-watching, the streaming industry started blooming, and CTV ad spending was growing at an insane speed. According to Insider Intelligence, this market has grown so much that by 2025 advertisers will be spending $30 billion on Connected TV advertising. In 2020 investments skyrocketed by 40.6% in the USA.

To better understand how CTV advertising functions and how it can be implemented into your marketing strategy, we must dive deeper and get advice from our experts.

So stay with us until the end credits.

What’s the difference between Linear TV, CTV, and OTT?

‍What is Linear TV?

Linear TV is the traditional system of television. With linear, everyone is watching the same scheduled program. It can be delivered “over the air,” through satellite, or cable. That is why we call the rise of digitized television (OTT and CTV) “cord-cutting.” We are turning to options that don’t use cables anymore, and we feel more comfortable choosing what we want to watch, and we can even pick the right time for us.

What is OTT (Over The Top)?

Over The Top (OTT) stands for all streaming services that deliver content via the internet. OTT content can be consumed on any device with an internet connection and a screen. So, if an app allows users to use their internet connection to share information, you guessed it - that is OTT. 

Examples of OTT streaming services are apps like Peacock, HBO Max, Hulu, Disney +, and many others. 

What is CTV (Connected TV)?

Connected TV (CTV) refers to any type of TV set connected to the internet. So if you are watching TV shows on platforms such as Android TV, Roku, etc., or you use PlayStation and Xbox to entertain yourself, you are already using the perks of CTV. Good for you!

Why is connected TV advertising taking over?

CTV is getting a lot of attention this year, and we would like to show you why marketers are obsessed with it. From the cord-cutting phenomenon to the ease of use, here are some of the most important reasons why connected TV advertising is taking over traditional TV advertising practice.

Here you can see how connected TV advertising looks like in practice:

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Cord cutting phenomenon: audience of traditional TV is declining

The television landscape is changing rapidly, and one of the most important changes is definitely the migration of viewers from traditional TV format to streaming services. According to Variety, 90.3% of broadcast and cable networks measured between 2016 and 2021 saw audiences decline. 

However, at least in the USA market, the number that is really changing the perspective of marketers is the number of consumers who are cutting the cord. EMarketer estimates that by 2024, more than one-third of US households will have cut the pay TV cord and use only streaming services and the internet for news and entertainment.

Programmatic advertising beats Linear with ease of use

Traditional TV program remains popular among the global audience, especially during important news and live sports events (Olympics, Super Bowl, etc.). The thrill of participating in such huge events simultaneously gives us some sense of belonging to this global village.

However, with all those companies interested in participating as sponsors of these events, the process of setting up an advertising campaign has to be planned months in advance (if we are lucky). 

With programmatic advertising, you can avoid all those meetings with agencies, broadcasters, and managers of all sorts. Instead, you just upload your video and start your personalized campaign. 

Reporting and targeting become easier with programmatic CTV advertising

Some of the main disadvantages of traditional advertising are the lack of real-time reports and non-existent options for targeting. People used to invest a lot of time and money in the production of commercials for linear TV, and in return, they could only know what the ratings were during the show, which contained their ads.

Luckily for all of us, times are changing, and programmatic CTV advertising is giving us many opportunities to track the behavior of our audience in real-time.

Why would I want to run connected TV ads?

The main benefits of CTV advertising are that this type of advertising is more affordable, has lower barrier and it gives you real-time performance reports. If you compare it to other kinds of marketing, this allows you to get in front of the audience while they are ready to get entertained.

While they are eating their popcorn, you can show them a short video about your brand and capture their intention when they are open to seeing something new. It can create a vast (and measurable) impact if done right. 

Another good thing is, that with CTV, you can reach younger population, and cord-cutting audience which is more open to learn something new and change their habits.

Build awareness with CTV advertising

Connected TV ads are perfect for creating awareness which is essential for startups and small brands that need to cut through the noise. When you get the attention of a wider audience, they will think of your brand when the problems you are solving occur.

So if you have a new product, some kind of innovation, or just starting, this kind of advertising can create the effect you are searching for. And suppose you already have the experience in using traditional TV advertising. In that case, it is good to know that you can get the same benefits with enhanced targeting options and inventory selection with CTV advertising.

Target your audience better with Connected TV advertising

One of the most significant advantages of CTV advertising is that you can use more advanced targeting tactics. In addition, CTV advertising allows you to use the same options for targeting that you use to run programmatic advertising: location, time, geographic targeting...

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What are the costs of connected TV advertising?

Pricing for CTV advertising varies depending on the type of the inventory and the type of localization. However, it needs to be considered that advertisers who run Cost-Per-Completed-View (CPCV) campaigns are getting the best cost performance. This is because consumers view up to 95% of the CTV ads, and the consumers who skip an ad or only watch a part of it do not count.
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With CPCV CTV campaigns, you are paying a bit more, but you are paying just for the people who have seen the whole ad. That way, you can control the advertising budget better and know the effectiveness of your campaigns faster.

Who can create the CTV advertising campaign for me?

As time passes, the main question will not be if the connected TV will take over traditional forms of advertising. The question is, when will it happen. And the best thing is that you, at this moment, know more about it than you knew 10 minutes ago. This creates a huge advantage, so if you want to talk to experts about creating your first CTV campaign, don’t hesitate to book a demo, or send us questions via contact us form.

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