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Jul 13
What is connected tv advertising?

Connected TV advertising: everything you need to know

Connected TV is taking the digital advertising world by storm.

Getting your ads on the big screen without the big price tag, reaching cord-cutters and highly engaged views, and mixing up your marketing mix are just the tip of the iceberg when it comes to reasons why connected TV advertising is quickly growing in adoption.

With more than 164 million U.S. users accessing video content via connected TV devices and predicted to grow by up to 204.1 million viewers in 2022, it is no surprise that marketers are looking for ways to leverage the channel. Plus the number of Smart TV’s and OTT (over-the-top) devices in households exceeded 1 billion in 2019. In the U.S. alone, more than 50% of the population has a TV-connected device in their home.

But what is it and how does it work? Let’s get started.

What is connected TV advertising?

Connected TV (CTV), also referred to as over-the-top (OTT), is ads that can be placed on any TV or device that can be connected to the internet and access video streaming content beyond what is available via the normal offering from a cable provider. CTV includes ads bought programmatically and shown on consoles, computer/mobile streaming, gaming devices, over-the-top (OTT), or Smart TVs.






Key points:

  • Connected TV (CTV) refers to streaming TV content over the internet on any device including mobile devices, tablets, and computers.
  • Connected TV—especially at this point in time—is being bought and sold programmatically.
  • Connected tv advertising allows you to show ads on Roku, SlingTV, Direct TV OnDemand, and other premium content providers to reach cord-cutting households.

How does connected TV advertising work?

Buckle up, it’s about to get technical.

CTV advertising is a form of private marketplace (PMP) deal. The programmatic media buying ecosystem operates with multiple levels of auctions, with each level of the “waterfall” holding its own parameters for price and access. The private marketplace inventory sale sits just one auction level above the open exchange but affords marketers the chance to access specific placements in an auction of fewer bidders, making win rates higher.

The private marketplace is invite-only (we’re talking VIP, people!) containing a collection of high-caliber publishers. It also offers access to inventory within specific site sections, sub-sections, or creative formats that may not be specifically targetable in the open auction environment. Creative formats available in a private marketplace include display, video, audio, native, and connected TV.

For marketers that have used traditional TV advertising for awareness-based campaigns because the channel offers the ability to reach highly engaged audiences. Connected TV offers these same benefits but enables enhanced targeting options and inventory selection to create an efficient channel for reaching a growing market.  In Choozle, you can search through connected TV deals to find deals that reach your desired audience.

This premium auction often comes at a higher-than-normal price and requires participants to pay a certain price floor or high-priced minimum CPM—but fear not, the metrics that follow are often much more telling of a successful campaign.

The availability and rates of inventory are subject to change, but if you’re interested in learning more, Choozle has a pre-negotiated library with details on placement, dimensions, price dimensions, price floors, and geographic availability of the placements available for purchase. Reach out.

CTV advertising: the metrics

First, let’s go over the acronyms you’ll need to know before diving into the CTV world:

  • CTV: Connected TV
  • OTT: Over the top
  • PMP: Private marketplace
  • CPCV: Cost-per completed view
  • VCR: Video completion rate

Connected TV key performance indicators

The metrics in connected TV advertising are quite different from the metrics we track in display advertising.

To dig a little deeper, clicks only occur if someone is streaming content on a laptop. Therefore, CTR and post-click conversions should not be your primary metrics. Conversion tracking would be limited to view-through conversions, like video completion rate and cost-per-view.

What you can track, however, are awareness, video completion rate (VCR) and cost-per completed view (CPCV).

  • Cost-per completed view: CPCV or cost per completed view is calculated by dividing the total spend by the number of completed views. You can also expect very low targets for cost per completed view—around $0.50 –  $1.00 (USD)—for publishers with high CPMs. This is an ideal goal if you are leveraging video, connected TV, or audio ad formats.
  • Completion Rate: Represents the percentage of impressions in the campaign that reached completion of the ad. Completion rates for connected TV are extremely high (in the range of 80% to 97%), as the environment doesn’t allow for skipping the videos. This is an ideal goal if you are leveraging video, connected TV, or audio ad formats.

The cost of connected TV

When considering connected TV over regular video advertising, one thing to keep in mind is that this premium ad space often requires participants to pay a certain price floor or higher-priced minimum CPM. Connected TV is sometimes 3–5x more expensive than a standard video placement, but the CPCV is almost always cheaper than the CPCV for video assets.

Video turns out CPMs of $10-15, while CPMs for Connected TV can reach up to $45+. While certainly not the least expensive targeting tactic per unit (upwards of $65 versus $15), Connected TV is almost guaranteed to produce a better outcome in the form of less expensive CPCVs.

Good news: Connected TV is now available for all campaigns in Choozle.

Optimizing your CTV ads

CTV ads only allow for optimizations toward the best performing PMP deal(s) within an ad group.

For example, if one deal is seeing a higher CPCV (cost-per completed view) or a lower VCR (video completion rate), we would remove that deal. There’s generally not a ton of other optimization needed because CPCV and VCR tend to not vary on time of day, day of the week, etc., so basically, the deal is the only thing that you’d need to optimize toward.

Preferred lists and block lists are a good starting point in optimizations if using Connected TV private marketplace contract groups. This offers more granularity in optimizations to set bid parameters based on high performing placements and low performing placements. For example, you can add to a preferred list and set a higher bid parameter to identify your higher preference for showing during that type of content than the rest of the Sling placements included in the contract grouping.

Connected TV FAQ

Why would I want to run connected TV ads?
For awareness, primarily. Connected TV advertising is a perfect awareness component of a well-rounded, full-funnel campaign.

What type of creative asset does connected TV require?
Connected TV creative can include an MP4 file or a VAST tag.

What makes connected TV advertising so special?
You get to place your ads in TV-like content without having to pay TV prices ($$) and with much better targeting and reporting.

What types of targeting can I use with connected TV?
Connected TV ads’ targeting is far more advanced than the targeting available with traditional TV. You can use many of the same targeting tactics you currently use to run programmatic ads now—data, geolocation, etc.

How much do I need to pay to secure CTV inventory?
Bid a minimum of $0.10 CPM above the price floor to be competitive in the auction. If you’re having issues securing inventory, we recommend increasing your bid to at least a $1 CPM above the price floor.

It’s not a matter of if, but when, CTV ads will become the preferred method of advertising over traditional TV. Get a jumpstart on your connected TV strategies today.

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