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How Do Connected TV Video Ads Differ From Traditional Ads?

There has been a significant change in the past ten years in how we consume TV and entertainment. Millions of households have abandoned traditional TV watching due to the wide use of internet-powered television, or Smart TV. The programing continues to expand and improve, giving the consumer tons of affordable options to choose the type of content they prefer and when and how they want to watch it. They can stream on the big set in the living room or watch it privately on their tablet or over their phone. The options are many!

This means smart marketers have to adapt and transition to being where the viewers are. Connected TV video ads or CTV ads are a part of just about any good marketing mix today. It is challenging for traditional ads to keep pace with streaming technology, and OTT is beginning to outperform the conventional. 

What are CTV or connected TV Video Ads?

Connected TVs (or CTVs) are simply televisions that have access to the internet and can load or stream digital content. A Smart TV has an internet connection built-in, and standard TVs can be connected using smart devices like Roku, Xbox, or Playstation. The content that streams are usually video streaming via apps that have been downloaded. The content may also come from Amazon Fire TV, Apple TV, or Chromecast

What is OTT (Over the top)? 

Over the top (or OTT) is the video content shared, while CTV is the internet-connected TV. OTT stands for “over the top,” meaning the top of the “box.” It refers to video content that is accessed via the internet and not via traditional cable or satellite. Some examples of OTT providers would be Netflix, Disney+, or Peacock. 

OTT (Over the top) vs. CTV (Connected TV) – What’s the difference?

Many people use these terms interchangeably, but CTV is the method for delivering the content, or the device, while OTT is the actual content being viewed via CTV. Most OTT content is viewed via CTV. 

What is programmatic advertising? 

Programmatic advertising is the use of software to buy distal advertising. It used artificial intelligence and algorithms to purchase display space. An advertiser would not be able to efficiently choose each channel, site, and app for ad placement. So space is bought through DSPs or Demand Side Platforms that have partnerships across many sites. They use automation and artificial intelligence to bid, buy and place media efficiently. Google display ads work similarly. Google reached up to 70% of all sites out there through their network. 

OTT advertising vs. traditional cable or satellite advertising- what’ the difference?

Every marketer struggles with where their ad spends will work best for them. Video consumption is steeply rising, and we want to get our ads in front of those viewers, right? But how do we best achieve that? Marketers have relied on TV for many years, but with the shift in viewership to online-connected devices, programmatic OTT ads are now taking over. 

Traditional TV can be thought of as more of a shotgun approach. The stations have spots, and the advertisers buy and fill them, getting in front of whoever is watching and then hoping for the best. 

OTT ads have emerged as an option that is more efficient and focused and a much more measurable way to get in front of your audience. OTT ads offer lots more controls to ensure the messaging is airing at the optimum times for your ideal customer. Data collection provides detailed demographics, info on relevant audience segments, are in specific consumer interest categories. The ads can even be placed based on real-time bidding to get to the target audience at the right time. 

All of this technology means the brand can better control targeting, spend, timing and performance. Remember, traditional TV is shown to anyone who flips on the TV. Targeting is limited to gender, location, and age. With programmatic OTT advertising, every impression is served up to relevant audience segments. We are talking about a laser-focused campaign.  

CTV viewers are more engaged in the content they view and usually can’t fast forward through the ads. That’s a good thing. But also, it is a responsibility to produce appropriate and engaging advertising. From a cost perspective, CTV advertising helps reach audiences efficiently and at a much lower cost than traditional advertising. 

CTV ads are viewed all the way through, with an average completion rate of 98%. They run full screen, meaning no “below the fold ” issues that other digital opportunities may present. You can also retarget your OTT and CTV viewers across multiple devices, including laptops, tablets, and mobile phones. This keeps your message top of mind through the decision-making process. 

How does OTT targeting work? Personalization comes from “listening” to cues and sending messages to our segment, income range, zip code, ethnicity, and education level. They will also target interest categories, which is enormous for a marketer. They can target our ideal “avatar” or “persona,” bringing a level and targeting and efficiency previously unknown. 

Tracking Capabilities 

Every marketer knows that tracker is everything. This sort of campaign “post-mortem” will ensure your future targeting and campaigns continue to build on learning and improvement. Some of the key metrics measured are video completion rate, the device’s performance, how consumers interact, and ad placement performance across various platforms. 

Sales or online engagement is an opportunity to drill down on the tracking to see what influenced the action taken and what calls-to-action were most effective. 

Some core metrics:

  • Video completion rate
  • Clicks from ad to the website
  • Ad delivery by device
  • Performance by the time of day
  • Performance by specific days
  • Ad viewer demographics. 

Content 

OTT advertising is consumer-focused so that when a viewer logs into their favorite service, it is more intentional. They have chosen that platform at that time and will be more receptive to an ad. And the ads are not skippable. (This puts the burden on the marketer to make it good!) Your content must be designed for the consumer you’ve targeted, meet their personal needs, and give them an experience that feels personal and tailored for them. A random traditional TV ad can never approach this level of focus and targeting.

What is the future of traditional ad serving? 

OTT subscriptions and CTV ownership continue to grow exponentially, creating a huge opportunity for marketers to reach ultra-targeted audiences across multiple devices. 

Some people have even given up traditional TV watching for all internet TV. 

In 2020, 80% of homes (or about 96 million Americans) had at least one connected TV. Americans are reported to spend more than an hour daily engaged with OTT content. 

Many believe we will see the “sunset” of traditional TV advertising in the coming years. CTV is the future of video advertising, and like Netflix, Amazon, and the other big guys produce more popular shows, more and more people are opting for the convenience of CTV. Millennials love CTV, and it is getting hard to target them on traditional TV or elsewhere. 

While conventional TV may have the ability to deliver enormous reach, CTV ads seem to be delivering the targeting and the performance. There is no doubt that OTT advertising belongs in the mix of every serious marketer. 

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