Until recently, companies and individual advertisers had just a few options when they wanted to run video ads (which were called “commercials,” not “video ads”). ABC, NBC, and CBS were the main sources. Slightly more recently, cable networks like MTV and ESPN had some reach and there was also a range of smaller specialty channels.
Even as cable TV matured into the widespread platform we knew in the 2000s, the limited ad inventory meant television advertising was reserved only for the wealthiest companies and advertisers.
Now, connected TV (CTV) has convinced more than one-fifth of cable TV customers to cut the cord and never look back.
Why are so many people cutting the cord?
The large number of cord-cutters across the country can be explained quite simply: cable TV can’t offer the same value for the money as CTV platforms can.
While the average cable subscription costs nearly $220 per month, a Netflix subscription costs just $6.99 (with ads) or $9.99 (without ads).
But cable doesn’t offer on-demand content like its lower-cost competitor, nor do they provide all the content new users want to watch. And since its costs are so high, cutting the cord is a no-brainer for lots of consumers.
What is Connected TV, exactly?
Connected TV (CTV) refers to the technology that enables viewers to access and stream video content through internet-connected devices, such as smart TVs, streaming media players, and even gaming consoles. This technology has revolutionized the way people consume TV content, bringing together traditional television and digital streaming platforms.
CTV encompasses a variety of devices and services, including:
- Smart TVs. These are televisions with built-in internet connectivity, allowing users to access streaming apps and services directly from their TV without the need for additional devices.
- Streaming Media Devices. These are devices like Google Chromecast, Apple TV, and Amazon Fire Stick that connect to a regular TV and enable it to access streaming content from various platforms.
- Gaming Consoles. Platforms such as PlayStation and Xbox offer internet connectivity and streaming capabilities in addition to gaming features.
- Over-the-Top (OTT) Services. Streaming platforms like Netflix, Hulu, and Amazon Prime Video deliver content directly to viewers via the internet, bypassing traditional cable or satellite TV providers.
The combination of these different avenues for streaming content has opened up a whole new world of television advertising opportunities. With connected TV, advertisers can now reach more potential customers with greater precision.
CTV vs. OTT
Although CTV involves the use of over-the-top services, there are several critical distinctions when comparing CTV vs. OTT.
OTT typically refers to streaming video services that are delivered over the internet, while CTV is a technology platform that allows viewers to access these streaming services.
Viewers can access over-the-top content on any device with an internet connection — this includes options that go beyond CTV, such as smartphones, tablets, and web interfaces.
Since OTT encompasses more mediums than just TV-oriented ones, it offers more advertising options for businesses and advertisers (generally at a lower cost). Of course, CTV advertising is still better for engagement, as it offers a premium viewing experience.
Benefits of Connected TV Advertising
There are several benefits to CTV advertising, including:
- Expanded reach. CTV allows advertisers to reach cord-cutters and cord-nevers, who are not accessible through traditional TV advertising. This enables brands to connect with a wider range of potential customers.
- Precision targeting. CTV advertising offers advanced targeting options based on demographics, interests, and viewing habits. This allows advertisers to deliver highly relevant ads to their target audience, increasing the likelihood of engagement and conversion.
- Enhanced analytics. CTV platforms provide detailed analytics and reporting, giving advertisers insights into ad performance, viewer engagement, and campaign effectiveness. This data can be used to optimize campaigns and improve ROI.
- Flexible advertising formats. CTV advertising supports various ad formats, including video, display, and interactive ads. This allows advertisers to create engaging, immersive experiences tailored to their target audience’s preferences.
- Cost efficiency. CTV advertising often operates on a programmatic basis, allowing advertisers to purchase ad inventory in real-time at competitive prices. This can result in more efficient ad spend and better campaign performance.
What the Future Holds for CTV
For advertisers, CTV offers an unprecedented level of control and flexibility over video campaigns. And with the cost savings, it can be a great way to reach new audiences while also creating more engaging experiences.
As more consumers continue to cut the cord, connected TV advertising will become increasingly important for businesses looking to run successful video campaigns. With its precision targeting capabilities and cost efficiency, CTV is quickly becoming the go-to option for those looking to reach a wider audience and maximize their ad budget.
The future is bright for CTV, as streaming video services continue to gain popularity across the globe. This trend represents a great opportunity for advertisers, who can now access more potential customers and deliver more relevant ads than ever before.
