RTB, CTV, OTT, GRP, FEP, SSP–this industry never stops with the confusing acronyms. And it’s especially complicated when you’re being introduced to an emerging channel like connected TV (CTV).
Connected TV and video streaming services, like Hulu and SlingTV, have cemented themselves into consumer’s daily routines. As consumer behaviors adjust, so will marketing strategies. Marketers can use connected TV to accurately reach their target audience with an unskippable, trackable, brand-safe ads. So, it shouldn’t be a surprise that advertising on connected TV is currently one of the fastest-growing channels in digital advertising.
According to a study by Integral Ad Science (IAS), almost nine in ten consumers have access to a connected TV. The report shows that alongside the growth of streaming, consumers may be starting to feel subscription fatigue. Seventy-six percent of respondents are willing to see ads in exchange for watching free streaming videos, and 55 percent plan to watch free video streaming services in the next 12 months.
As you get ramped up with CTV, let’s start with the basics—terminology.
Still confused on what is Connected TV? Read our deep-dive into connected tv advertising.
How is CTV inventory delivered?
There are several delivery methods for CTV inventory. Here are a few of the most common terms that you will come across as you leverage connected TV for your digital advertising campaigns.
- Over-the-Top (OTT): Over-the-top (OTT) content goes “over” your cable box to give you access to TV content. In other words, it delivers content using an internet connection as opposed to a cable or broadcast provider.
- Full-Episode Player (FEP): Full-episode player (FEP) refers to high-quality produced TV-like content but delivered through a streaming device. It is typically 30-60 minutes with commercial breaks in between.
- Live streaming: Live streaming means that the television content you’re watching is being streamed in real-time over the internet. This means you won’t have to miss a single second of the big event, even LIVE TV, if your “big event” is puppies battling over a football-shaped chew toy or handing off a rose to the next bachelor.
What types of CTV inventory is available?
CTV advertising is a type of private marketplace (PMP) deal. These deals provide access to three main inventory access points:
- Content Owners: Marketers can target inventory from specific CTV apps or networks, like A+E Networks, Bloomberg Media, Discovery Networks, Fox Network, Newsy, or Scripps Networks, to focus on content alignment.
- Premium Distributors: DIRECTV, Pluto TV, Samba TV, and Sling TV allow marketers to choose from a variety of distributors that aggregate TV content from multiple networks.
- CTV Supply-Side Platforms: Many supply-side platforms (SSPs) and traditional cable companies, like Adap.TV, Beachfront, Brightroll, Freewheel, Rubicon Project, and SpotX, are expanding to offer access to CTV inventory to aggregate CTV deals for the end marketer.
What metrics to use for CTV campaigns?
With any new digital advertising channel, there will be new metrics. Here are a few of the most common metrics related to CTV inventory.
- Impressions: Impressions delivered represents the number of single ads that were served to a user. To be counted as an impression, an ad does not have to be clicked on—it simply has to be placed on the page and potentially visible to a user (even if the user does not see the ad, it still counts as an impression). An impression is calculated after the first frame of the start of a video.
- Reach: Reach is the number of unique individuals or households that are exposed to your advertisement. Something to remember is that just because you delivered one million impressions doesn’t mean that one million individual households viewed your ad.
- Frequency: Frequency is calculated by dividing the total number of impressions by the number of unique persons or households who saw your ad. It’s the average number of times you’re delivering a CTV ad to a given household. For example, if you deliver 3,000 ads to 1,000 unique households (your reach), then your frequency is three. The ability to frequency cap is one of the many reasons why advertising on connected TV has so much value compared to traditional TV. In essence, you can reach your target audience without having them develop a poor relationship with the brand due to the annoyance caused by seeing the same ad too many times in a row.
- Video Completion Rate (VCR): VCR represents the percentage of impressions in the campaign that reached the completion of the ad. Completion rates for CTV are incredibly high (in the range of 92 percent to 97 percent). Because of this, you can also expect very low targets for cost per completed view—around $0.03—for publishers with high CPMs.
- Gross Rating Point (GRP): GRP is used to determine how many people within an advertiser’s target audience saw an ad. It is calculated by multiplying your reach percentage, by your average frequency number, by 100. GRP reporting is only available if first enabled via Nielsen. This metric will be provided on an outside report generated by Nielsen. For example, you are looking to target males between the ages of 18 – 34. 30 percent of viewers in this demographic watch a particular sports game on Sunday night. You decide to purchase four commercial spots when the game airs. In this instance, GRP= 30 (your reach percentage) times four (your average frequency) times 100, getting you to a GRP of 120.
- Cost Per Point (CPP): You can think of CPP as a way to measure how well, for the price, your ads reach your desired audience. CPP is calculated by dividing your total media cost by your GRP. This will tell you what you are paying per GRP.
- View-Through Conversions: Conversion tracking is part of the attribution process, through which credit is assigned for a conversion. View-through conversions represent when a user sees your advertisement and does not interact with it, but later goes on to convert.
- On-Target Percentage (OTP): On-target percentage measures how much of your advertising campaign’s results come from your intended audience. If you create a goal of “email sign-up” for an audience of “females 18–24,” OTP measures what percentage of that audience made that conversion.
As CTV inventory increases, marketers will look at ways to include them in their digital advertising strategies. Get a jump start on your connected TV strategies today.
