Every day, people are leaving their cable and satellite providers thanks to streaming services and smart devices. Consumers no longer need to pay high cable costs for channels they don’t want. Instead, they can choose what they want to watch and when they want to watch it through connected TV.

Because of the switch to streaming, the way we reach customers through advertising is changing. One fundamental change is the switch from linear TV advertising to OTT and programmatic TV advertising. Rather than working with cable providers, marketing firms are broadening their scope and creating digital ads that reach customers directly.

What Is Connected TV Advertising?

To understand connected TV (CTV) advertising, you need to start with the definition of CTV. Connected televisions can access the internet and stream premium content through applications. They have become more popular over the years with the rise in streaming services. These TVs are now being used to watch on-demand content rather than traditional broadcast programming. This is where advertisers can jump in with their own commercials. For example, if someone is watching "30 Rock" on HBO through their internet-enabled smart tv (and they have the HBO app downloaded on their device), an ad could pop up for a new movie that just came out. Over 40 percent of the nation chooses web-connected options over traditional, linear television providers. 

Programmatic TV advertising gives marketers the power to break free from typical television advertising and reach the large percentage of the population that opt for CTV. Instead of going through a provider, programmatic and over-the-top (OTT) advertising solutions target consumers directly through streaming services and connected devices.

This type of advertising takes traditional TV ads and expands them across multiple media outlets via the internet.  In addition to varying the range of distribution, OTT advertising also reaches the consumer directly. Consequently, this method offers advertisers the opportunity to reach viewers on a grand scale.

How Does Advertising on Connected TV Work?

Since streaming providers are individual entities, the way you purchase and implement advertising space can be complicated. One of the most cost-effective and insightful ways to utilize OTT advertising is through programmatic ad systems.

Programmatic advertising utilizes automated software to purchase digital ad space targeted toward a specific audience. Marketers then tailor the advertisements to the brand-specific goals and distribute the ads via algorithms that focus on the target audience. 

This process simplifies the advertising process by eliminating the need for the time-consuming methods previously required by linear advertising. Additionally, programmatic ads are considerably cheaper than traditional television advertising.

What are the Benefits of Connected TV Ads?

First and foremost, programmatic advertising opens opportunities for reaching consumers that have switched from traditional to connected TV. The number of people opting for streaming services is growing daily, and you need to ensure that they are seeing your business. 

Another thing to consider is the cost. Traditional TV advertising is expensive and becoming a thing of the past. When you opt for OTT services such as programmatic ads, your advertising cost per thousand impressions can drop as much as 80 percent.

Programmatic advertising also offers advantages over linear TV advertising because it is data-driven. Since these ads are web-based, advertisers can analyze their viewing metrics in real-time. When you couple these insights with sales numbers through attribution partners, marketers gain exact numbers surrounding the campaign’s impact performance.

Where Are CTV Ads Distributed?

There are two main focuses of CTV advertising — devices and connected providers. When creating an OTT advertising campaign, it is beneficial to spread your budget across ads that target both.

Devices, such as smart TVs, mobile devices, and streaming boxes like Roku, constantly distribute advertisements to customers via video and static ads. Even though device-based advertising is limited to the device itself, those ads reach every user. To put that into perspective, advertising through Roku has the potential to reach over 50 million active users.

Connected providers like Hulu, Netflix, and other streaming services open access to users across multiple devices. Instead of only seeing the ads on a particular device, consumers see your CTV ads via every device that has access to the streaming services. 

Trends and Best Practices of CTV Advertising in 2021

Connected TV advertising is on the rise in 2021 and is forecasted to continue growing. Currently, programmatic advertising reaches 86% of US households, and that number is rising due to growing access to smart TVs and streaming devices.

Partnering with a professional media strategist like MBI can increase your ability to reach the half of the population that has already “cut the cord” on TV providers in the US. Contact us today to discuss how our team can help your business find the right way to advertise based on your company’s unique needs.