What is CTV Advertising and How Does It Work?

In a world saturated with streaming services, we are all digital content consumers in one way or another. In fact, research shows that the average consumer spends more than eight hours per day engaging with digital content on some sort of device. When you look at the habits of Gen Z and Millenials, those consumers spend upwards of 11 hours per day on devices.

Plus, many consumers use more than one device at the same time. How often have you found yourself scrolling through social media on your smartphone while watching your favorite show on your smart TV? Digital content is consumed all day across every generation, and that’s where advertising comes into the picture. More specifically, that’s where CTV advertising is a primary player in this digital landscape. 

But what is CTV advertising? Let’s explore the role of CTV advertising and how it fits into  consumer-driven media. 

person viewing streaming TV from phone for article what is CTV advertising

What is CTV Advertising?

To understand CTV advertising, it is important to understand how it differs from STV and OTT. Yes, that’s a bunch of three-letter acronyms, so let’s break down these abbreviations.

What Does CTV Mean?

CTV stands for connected TV. Connected TV is a device that enables content streaming and allows viewers to use apps to access that content. 

CTV is a catch-all term for any device that is capable of providing content streaming options when connected to the Internet. Gaming consoles such as an Xbox, PlayStation, or Nintendo Switch are considered CTV devices. Digital media hubs or set-top boxes like Roku, Apple TV, Android TV, and Fire TV are also CTVs. 

What is OTT or STV?

While CTV refers to devices, OTT refers to the process of streaming content over the Internet. Over-the-top TV (OTT) and streaming TV (STV) are often interchangeable terms describing the digital distribution or delivery of video content. 

The key element of OTT is that viewers use the Internet to watch content, not a cable or satellite provider. In other words, viewers go “over-the-top” of traditional TV services to access content.

There are numerous types of OTT services, including Netflix, Disney Plus, Hulu, Amazon Prime, HBO Max, ESPN, Showtime, Peacock, and more. 

How Does CTV Advertising Work?

OTT and CTV advertising are interconnected. CTV describes a specific way to utilize OTT services. For example, you could be using an OTT service on a CTV device, meaning you could be watching your favorite Netflix show using a PlayStation connected to a TV. 

This does not mean OTT and CVT advertising are the same, though. 

CTV advertising is a unique kind of advertising since it has the capability of reaching viewers outside of traditional Linear TV. Linear TV is that classic TV setup where a viewer pays for a cable or satellite subscription or uses an antenna to watch scheduled TV programs. 

So, how does connected TV advertising work? It’s about reaching a particular audience base. 

The Benefits of CTV Advertising

Remember how consumers spend hours upon hours each day using a smart device to consume digital content? CTV advertising is digital advertising that gives advertisers the ability to reach consumers beyond traditional means, and ultimately, to reach consumers within that digital world. 

It is not advertising directed toward a shopper strolling through a mall, a driver cruising down the highway, or even a reader scanning the pages of a magazine. Rather, CTV advertising follows that age-old saying to “meet people where they are.” It’s about advertising to consumers on their home turf in their preferable format. 

A Targeted Audience

CTV advertising gives advertisers the opportunity to target a very specific audience base. Information taken from first- and third-party audience data helps advertisers reach consumers that they feel are the best match for their advertisement. CTV advertising gives a sense of control to advertisers, especially considering that they can put their advertising efforts toward a precise target audience of their most valuable viewers.

An Expanded Audience 

CTV advertising reaches digital content consumers known as cord-cutters or cord-nevers. These are individuals that do not pay for traditional cable or satellite subscriptions in order to consume content, even though they might have relied on such subscriptions at one point. It’s a customer base that is canceling a service to find another method that will better satisfy their viewing needs.

A Growing Audience 

Although OTT streaming has been popular for years, the demand for OTT services continues to increase. Yes, cable and satellite providers are still in the game, but the fierce competition for viewership is waging war on their livelihood. Digital content consumers want their needs met on their terms, viewing content when and where they desire. 

Connected TV Metrics

CVT advertising can be terribly challenging to get right. How so? 

When a CTV ad comes on, a viewer cannot skip over it. Because of this non-skippable feature, advertisers tend to see one of two outcomes. Either an ad is captivating enough to achieve high view rates, or viewers disengage entirely by simply walking away from their TV during an advertisement. 

There is very little forgiveness when it comes to CTV advertising. An ad without proper branding or messaging will not be successful. A viewer must feel there is a reason to stick around when their chosen content is not playing.

TVIQ and CVT Advertising 

Here at TVIQ, we are often asked, “What is CTV advertising and how does CTV advertising work?”

And we have answers!

Our data-driven strategy combined with our programmatic sales methodology is what sets us apart. 

We know how to create powerful and profitable CTV advertising campaigns. We understand what is required to maximize revenue in this content-hungry world. We account for the complex nature of CTV advertising and have the experience needed to create high-converting ads. 

Learn more about the services we offer and how our team of highly-skilled media executives promote CTV growth through custom consulting, or send us a message with any questions.

We look forward to partnering with you to grow your streaming TV business.