What is ctv in adtech?

Unfortunately, quite often people misunderstand these terms, which may cause serious confusion when it comes to advertising.

Here at MindK, we work with clients from the advertising industry helping them develop AdTech software, and can clearly see the growing interest in the potential of OTT CTV advertising. Indeed, as already mentioned when talking about Ad Tech challenges and opportunities, CTV and OTT platforms represent a tasty piece of pie for advertisers.

And numbers prove that: in the USA only the number of CTV users reached 203 million in 2020 and is predicted that around 60.1% of people will be CTV users by 2022. For OTT streaming to TVs, the user base increased up to 115% between 2020 and 2021.

So, if you plan to invest in CTV and OTT advertising, it’s very important to clearly understand the difference between these terms, how video ads are run and what challenges are on the market right now. We’ve prepared a complete guide to help you connect the dots.

CTV and OTT platforms are often considered synonymous, but they are not. What is the difference between CTV and OTT? Let’s analyze each concept separately.

Connected TV refers to an ecosystem of devices connected to the internet and allowing people to watch video content. These devices include:

The concept of connected TV is broader than just smart television, involving access to video content using a large screen.

As for Over-the-top, it means providing media services like film content and television via the Internet. Unlike CTV, which allows users to watch video only via the large screen, OTT providers enable consumers to access content on various devices, including laptops, smartphones, tablets, television, and so on.

Source: demandlocal.com

Among the most popular OTT service providers are Netflix, Amazon Prime, Disney+, Hulu, HBO Max, and so forth. However, there are some differences in OTT service providers you should be aware of. OTT providers fall into:

YouTube TV’s offering

To sum up, most OTT content (around 75%) is now accessed through CTV. That’s why, generally, you can think of OTT as the method of delivering video content and CTV as a device on which you watch the content:

Now that you know the differences in terms, you’re probably wondering “Why exactly should I opt for CTV and OTT advertising instead of, for example, traditional TV?”.

TV has been the best way to reach mass audiences for years. It still is the top medium around the globe. However, traditional TV advertising focused on all segments of the potential audience is not as effective as desired for advertising purposes.

60% of marketers in the USA with digital video in their media budgets admitted they plan to shift ad spendings from linear TV to CTV and OTT this year. Here are some reasons why advertises opt for CTV and OTT advertising:

More and more people are cutting the cable TV cord. Even before the pandemic around 60% of Americans canceled their cable TV packages in favor of streaming services, while 29% admitted that they plan to do it soon.

All this obviously influences the reach levels. Traditional TV reach levels decrease between 2% and 3% each year, however, there was a sharp drop in 2020. The experts predict that traditional TV won’t fully recover from its 12.5% drop last year, and will never reach pre-pandemic levels again. People are spending more and more time watching videos on digital video devices, not on TV.

Source: emarketer.com

According to the AdSupply Trends Report by Pixalate, in the third quarter of 2020 around 72% of US households became reachable by programmatic OTT/CTV compared to 50% in 2019.

Q3 2020 State of Connected TV/OTT: Ad Supply Trends ReportSource: pixalate.com

Thanks to Big Data in advertising, marketers can successfully segment the target audience to improve ad performance. Connected TV and OTT allow different targeting options based on geolocation, search history, movies watched, games installed, and so on.

According to the platform and approach to buying OTT ads, advertisers are able to optimize their targeting by using the provider’s audience data enriched with their customer data.

Source: tinuiti.com

What makes OTT targeting even more interesting is its cross-channel approach. It enables advertisers to target and retarget the same audience across different screens and channels. For instance, it is possible to reach an audience on TV screens then retargeted across OTT.

More precise targeting allows displaying ads to only those users who are potentially interested in the ad and achieve a higher ROI.

Connected TV and OTT advertising enables marketers to experiment with a number of ad formats. If cable TV advertising works with videos only, connected TV allows using video, banners, interactives, animated and static ad types, and much more.

Among the most popular types of ads used are:

Thanks to the variety of ad formats advertisers can do split tests to find out which formats and call-to-actions are more effective in terms of engagement and performance.

For example, two years ago Cadillac started a CTV ad campaign to promote the Cadillac Escalade and spark interest to book a test drive. For this, the company selected different types of video formats with rich images of the homepage, interior, and exterior of the car. They used pre-roll video, a carousel that showcased multiple images, and a TV-to-mobile format that allowed receiving a trackable URL with more information via SMS.

The balance of visuals ensured a maximum user engagement and showed that the ad formats with the homepage were better performing than the ones with car exterior and interior.

Source: The State of Connected TV Report 2020

Viewability is a measurement of whether an ad had the chance to be seen by a user. Most OTT and CTV ads are run full screen, which means people definitely see the ads. In addition to this, CTV ads are non-skippable, which increases the view rates of ad campaigns.

Indeed, CTV ads are considered at the top of the digital food chain. Media Quality Report by Integral Ad Science’s (IAS) analyzed CTV ad impressions and compared them with other types of digital video ads. As a result, they found out that CTV ads have 93.3% viewability on average.

The cherry on top – according to a statement from CTV Media, the average completion rate of watching an ad to the end is around 98%.

How are the ads inserted in the video content in CTV and OTT environments? Technically there are two methods to serve the ad: client-side ad insertion (CSAI) and server-side ad insertion (SSAI).

Client-side ad insertion is the traditional way of ad insertion and involves either preloading the ad into the video player of the end user’s device, or sending out an ad request to a third-party ad server from the video player.

From a delivery point of view, the ad and content are separated and displayed independently. When the player decides it’s time to roll an ad, it pauses the video content, sends a request to the server (where the ad is stored), or preloads it right in the player, then receives the ad and displays it.

This method has certain advantages, like a well-tried and reliable approach, many interactivity options, and an ability to receive ad metrics directly from client applications, yet a number of serious challenges remain.

As far as the ad and the content run independently, it leads to some interruptions between them resulting in poor user experience. Moreover, the CSAI is not very secure from ad blockers that may decrease ad viewability, and is highly dependent on the capabilities of the end user’s device.

For all those challenges client-side ad insertion is considered to be outdated and is gradually being driven out by server-side ad insertion.

In contrast, the server-side ad-insertion method allows displaying advertising without any interruptions since the ad is directly “stitched” to video content.

For delivery, the SSAI requires an intermediate server that retrieves the advertising from the ad server and inserts it in the main video. In such a scenario, ad positions should be defined in advance because the server will insert them in the video before the content is delivered to the end-user.

Difference between client-side ad insertion (CSAI) and server-side ad insertion (SSAI)Source: gcorelabs.com

Even though the SSAI method is in many ways superior for user experience because it causes no interruptions, uses the adaptive bitrate streaming technique resulting in very little buffering and support of live streaming, the technology requires a high-capacity server and usually has a high price tag.

In addition, it has rather limited measurements of ad results, namely, viewer-tracking and interactivity measurement compared to the client-side insertion. The server is not always able to correctly recognize the receiving and corresponding data points, which makes ad measurement more complicated.

Both CSAI and SSAI are excellent advertisement delivery methods for CTV, OTT, and other video streaming services, so there is no winner.

Based on the technologies’ strong and weak points, each advertiser can choose one method which will best suit their advertising goals, or consider deploying them in a combination. Using a combination of these two ad insertion methods increases the chance that consumers receive the best possible experience and advertisers receive better ROI.

Forearmed with all the background information about advertising on CTV and OTT, it is important also to be forewarned of all the challenges advertisers are facing right now. A little spoiler: some of these challenges can even be turned into opportunities.

The great number of apps, OTT service providers, and CTV devices is confusing not only for the viewers, but also advertisers struggling to find the best way to both reach and measure their audiences. This challenge can be considered a root cause of all the following challenges we’ll list below.

The main problem is that it is very difficult to define users across different CTV devices. The reason for that is that all CTV devices have their own hardware and software, meaning that all of them have their personal ID (or even several IDs). Considering that most people use different devices to watch videos from various OTT service providers turns up the heat.

However, with each challenge comes an opportunity. Fragmentation makes advertisers search for innovative advertising methods and technologies to help them overcome this challenge.

High fragmentation, similar to chained response, results in one more serious challenge for advertisers – identifying audiences across a variety of CTV devices and OTT apps.

Interactive Advertising Bureau (or IAB) Tech Lab released an OTT/CTV Store Assigned App Identification Guidelines, in order to help advertisers overcome this challenge.

The latest news from Google only adds fuel to the flames. Chrome recently published a new proposal, Gnatcatcher, which proposes to mask the IP addresses of users to protect a person’s identity. Although this proposal will continue to be refined on the basis of feedback from the community, the Ad Tech industry is discussing the elimination of IP address as the most common identifier for CTV advertising.

Anyway, there are alternatives to the IP address, which are primarily the advertising-specific IDs provided by CTV and smart TV platforms, first-party data like emails most streaming providers collect from registered users, and much more. Actually, the CTV and OTT advertising industry has to move to some type of unified ID, but that does not exist today.

Measuring attribution of the ad campaigns is another pain point of the CTV advertising industry. For example, 39% of marketers who shifted ad budgets to CTV advertising report an increase in Return on Ad Spend (ROAS), while 32% cannot measure the change.

Source: The State of CTV Advertising

The key problem here is that ad measurement is highly dependent on identifiers, limited or closed access to CTV devices and a popular method of server-side ad insertion with its ineffective video ad-serving standards and high risk of ad fraud.

Currently, IAB is working on improving some of its existing standards, including Video Ad Serving Templates (VAST) and Open Measurement (OM), where VAST is responsible for video ad serving and OM is focused on measuring video advertising in web, mobile, CTV and OTT environments.

To improve performance measuring, 68% of advertisers state that they partner with Ad Tech companies offering Demand-side platforms (DSP), Supply-side platforms (SSP), and ad servers. We’ve discussed these ad tech platforms more precisely in our article about the Ad Tech landscape. PwC company, for instance, suggests providers use advanced algorithms to provide better targeting and improve measuring viewer engagement.

Ad fraud is a common challenge across the whole advertising industry, and CTV and OTT advertising is not an exception. The recent Ad Supply Trends Report by Pixalate revealed that around 20% of programmatic OTT/CTV advertising is invalid, which is too big to be overlooked.

CTV and OTT fraud happens when advertisers are paying for ads that do not reach the actual consumers. Without proper protection, it is quite challenging for advertisers to single out real versus invalid traffic.

DoubleVerify, a major software platform for digital media measurement, data, and analytics, singles out three main types of fraud in CTV:

In recent years, many companies like Oracle MOAT, Human, and DoubleVerify revealed different CTV spoofing schemes. Take, for example, ParrotTerra, a service-side ad insertion scheme, which, by means of generating fake CTV that will never reach real consumers, faked 3.7 million devices per day, and planned to steal from $30 to $50 million in ad spendings.

Typical SSAI fraud schemeSource: campaignasia.com

According to DoubleVerify’s data, the CTV fraud impressions have seen a 220% increase in 2020 compared to 2019. Moreover, DoubleVerify claims they currently detect more than 500,000 fraudulent CTV devices a day.

While the CTV and OTT advertising industry keeps on growing, there is a high probability that the ad fraud schemes will mature. In such a light, developing ad fraud protection solutions is a huge business opportunity for the growing Ad Tech industry.

The world has been moving from broadcast to digital video delivery. Cable TV and satellite TV have been overtaken by OTT and CTV advertising for publishers as they are the preferred methods of delivering content to viewers around the world.

More Stats and Facts – OTT and CTV :

According to Digital TV Research, media revenue from OTT and Connected TV advertising is expected to surpass $210 billion by 2026.

In recent news, Magnite has announced Magnite Streaming, a singular supply-side platform that merges technology from the Magnite CTV and SpotX platforms.

Magnite Streaming also provides advertisers with access to CTV and OTT inventory, audience targeting capabilities, and real-time reporting.

In 2022, the number of CTV users amounted to more than 110 million among Gen Z and Millennials.

Most viewers are switching from linear TV to OTT and CTV. Hence, advertisers are quick to embrace this digital migration.

While both platforms have their strengths and weaknesses, each has a unique way of serving different people in the right market at the right time.

Also Read: Ad Tech Trends That We Can Expect in 2023

Here are the top reasons why publishers must leverage OTT and CTV ads for improved revenue generation.

While the OTT publishers allow users to watch shows and movies whenever they want, on any device with the help of streaming services like Netflix, Amazon Prime and Hulu, CTV ads are targeted toward devices “connected” to the internet, meaning smart TVs, streaming devices, and gaming consoles.

Over-the-top and CTV ads help target users of all ages, genders, education levels, interests and locations (with precise geographic data) based on in-app behaviour or user search history across multiple platforms.

Also read: Ad Targeting: A Publisher’s Guide (with Pros And Cons)

Digital programmatic advertising through OTT and CTV ads comes with its own sets of benefits, such as a lower minimum cost threshold, cheaper cross-platform blended CPMs, complex audience segmentation, and advanced reporting capabilities, which makes it a lucrative option for advertisers.

Now that your ads are running on OTT and CTV platforms, your next area of focus should be on maximizing your ad revenue.

Listen to what CTV is on our podcast and build a deeper insight.

Ad-supported video on demand (OTT) and channel-based advertising (CTV) is widely accepted as the two top ways to monetize ads on the web.

Advertisers need to consider several important factors when determining OTT and CTV strategies. They must define the target audience and their expectations, develop a go-to-market strategy, understand the visitor’s journey or ad experience, and test different delivery methods to see which one works best for them.

Programmatic CTV advertising seems to be the go-to option for marketers looking to reach modern customers at scale.

When targeting consumers, CTV advertising that is suitable for big screens is best. For APAC consumers, mobile-friendly OTT advertisements offer higher returns on your advertising spending.

While commercials are unavoidable on AVOD, users may pay extra to avoid them on SVOD (except when consumers upgrade). Marketers may now reach more people in the US and APAC by advertising on AVOD programs.

Before implementing an omnichannel marketing strategy, marketers must first determine exactly who their target consumer base is and what they want. Data providers that provide global, accurate, and high-performing audience segments are critical to accomplishing this.

Here’s how you can pick the best one that suits your needs.

Also Check: Programmatic Advertising: A Quick Guide For Publishers

Keep your marketing objectives to one clear goal. Don’t try to do too much here, as it can confuse and turn off your audience before taking the desired action.

Understand your audience’s needs, and do not opt for a one-size-fits-all approach. Take your time, research, and plan your ad messaging around a specific customer profile.

Compared to other media platforms, OTT advertising is more engaging and visually appealing. Viewers cannot click on an OTT ad to reach your website, unlike social media or search ads. Hence, including a clear and compelling CTA is a must.

In addition to creating effective CTAs, it’s important to test different over-the-top ads as part of your OTT advertising campaign. One way to do this is by splitting-testing two different versions of an ad or airing them on different platforms at once.

Media is now being consumed by multiple audiences at the same time. By running media ads that promote your brand consistently and clearly, you can reach new audiences with ease. Showing your logo, eye-catching images of your products or services, and CTA across all your ads helps greatly with brand recall.

It’s not just laptops and smartphones—people are consuming video content on tablets, connected TVs and other devices. To ensure that your over-the-top ads appeal to users on all of these display types, use fluid grids, flexible images, larger texts and close-up shots.

Also Read: Cross-Device Tracking: Why the Industry Needs It | Benefits + Challenges

Why should people buy from you? You know your audience. Use that knowledge to sell yourself better than the competition at a price you can afford. Craft an ad that shows viewers why they should watch. Don’t be afraid to get creative with your messaging, and make sure it’s clear, concise and non-preachy.

Digital is more than just the website. In today’s world, digital presence is about building a robust digital presence to stay relevant and thrive in the new normal. With new technology, brands are able to create personalized experiences for their audiences across all platforms, not just on the internet.

This is where OTT publishers and CTV advertising come into play, where over-the-top ads are targeted and customized for you or your audience on different devices and touchpoints.

Also Check: The Top 15 Video Ad Networks for Publishers (2023 Update)

Kickstart your OTT and CTV journey with these top-notch 7 platforms that are handpicked just for you.

Access all your favourite apps under one roof. Amazon Fire is a TV with an HDMI port and an internet connection. Quick and large reach.

Apple TV is a smart TV and streaming device that works with your iOS device to offer video, music and games. Massive audience reach.

Playstation is a popular game console made by Sony that is used to stream videos and games. Perfect for niche audiences in sports and the online gaming space.

A video streaming service that allows people to watch a wide variety of great TV shows and movies. Netflix is perfect for a global audience.

YouTubeTV is one of the most popular free video streaming platforms in the world, which enables both content creators and businesses to earn a profit from videos and advertisements on the platform.

Hulu is a TV streaming service that allows users to watch live and on-demand TV shows and movies on Internet-connected devices. Helps reach a large audience faster.

World’s top audio streaming service with a giant library of music, podcasts and videos offered through mobile devices and desktops. Spotify is great for targeting a global audience with niche interests.

It is becoming more and more important to advertise online, especially through OTT publishers. With advances in technology for viewing, viewing quality and reach, it is easier to view an ad campaign online rather than just in your local market.

Through CTV and OTT publishers, publishers enjoy the benefits of targeting customers all at once, with high-quality content and branding that offers brand safety.

In addition, publishing through these channels provides publishers with the opportunity to track the metrics of their campaigns in order to understand engagement and the effectiveness of their advertising.

With the growing popularity of OTT and CTV advertising for publishers, these platforms will undoubtedly help draw larger ad spending and continue to increase their market share.

So are you ready to boost your return on ad spend on OTT and CTV advertising campaigns? Sign up here to grow your ad revenue by upto 40% with a Google Certified Publishing Partner.

CTV advertising actively changes digital marketing and digital advertising experiences. Unlike traditional TV, the Internet as a platform is universal in the ability to make content available from any spot in the world.

As traditional linear TV and even cable TV lose their former relevance, connected Internet devices are massively paving the way for flexible and selective CTV advertising. Time to find out how CTV ads are served now and how CTV advertising is enabled.

Connected television can be supported by any device that is designed to support multimedia and connect streaming content (Amazon fire TV, Apple TV, Youtube TV, Sling TV, live TV) from the Internet (Xbox, Amazon Fire, Fire TV stick, Roku, PlayStation, Blu-ray Disk Player, Nintendo Switch, Smart TVs, game consoles, or other supported media platform for digital TV watching).

No cable or satellite subscription is required. Connected TV is far broader than Smart TV. Thus, it means that a CTV advertising campaign can be supported by any Internet-connected device and will reach TV viewers everywhere.

So with CTV ads, people can see the same commercials they normally see on their mobile phones. Further on, we'll review how OTT and CTV advertising works.

Connected TV (CTV) is the integration of the Internet and web 2.0 features into new-generation TV sets.

To ease the understanding of connected TV and digital advertising on CTV, you might regard the CTV as a hybrid TV or a merging of computer technology and linear TV.

Using connected TV, the viewers can access video streaming services (e.g streaming video on Netflix, Hulu, YouTube, Pandora, Apple TV) and search for digital content on the web.

Compared to traditional TV, which is primarily focused on media broadcasting, these devices like Smart TV's, Amazon Fire stick, and others) are all about online interactive media. CTV viewers access Internet TV, over-the-top content, and on-demand streaming media.

This scheme depicts the evolution of television. Judging by the picture you can understand how CTV advertising works now. When it comes to TV commercials, they can be delivered on every medium featured above, including linear/broadcast TV; the differences will be in technical nuances.

Since traditional TV, satellite subscriptions, and cable subscriptions don't support the Internet connection, they can't transmit digital advertisements and reach viewers like Internet-capable Smart television. Let's take a closer look at technologies to understand how OTT and CTV advertising work.

So, what are PTV, OTT, and CTV? It's important to know and understand how OTT advertising and connected TV advertising work.

It is a technology that supports addressable TV advertising capabilities. As was mentioned above, connected TV examples include streaming content via gaming consoles, from PlayStation to Xbox, online TV streaming services, and cable providers. This way, CTV represents the tech core for programmatic TV (PTV) support.

It is the same Internet-TV content consumption, but it doesn't require an active subscription like cable or TV streaming services. However, users still need to have a broadband connection. It helps to reach the connected TV advertising market using top OTT (over-the-top) apps typically found in mobile stores.

Since both addressable TV and CTV connect to the Internet source, they can deliver digital ads on television programmatically.

PTV is a method used for broadcasting connected TV ads to the target audience using the advantages of algorithmic ad purchasing. Algorithmic purchasing is enabled by programmatic software. Such software is specially adapted for the brands and exists in the form of programmatic advertising platforms.

It can be either a connected TV ad network or a connected TV platform for advertisers (DSP). Advertisers organize ad placements on programmatic platforms tuning the dashboards according to their digital marketing objectives almost like they do for the web.

Programmatic TV is essential for CTV advertising. It helps to virtually serve ads on any device that has an Internet connection. Using PTV, the brand can deliver a specific commercial to a particular household.

Instead of running the same ad for all viewers of a TV show, the brands can show different ads to different people. While watching the same show, the users will be shown different ads that better correspond to their interests, age, level of income, etc.

If we speak about the mechanism of how programmatic connected TV ads are served, we need to remember the specifics of the environment. Programmatic functions according to second and first-price auctions. Different programmatic deals have different terms and conditions regarding inventory access priority and necessary purchasing volumes.

Connected TV ads are getting purchased and sold in private marketplaces (PMP) which perches one level above the open marketplace. Private marketplaces are invitation-only, which means fewer participants and higher win rates.

In such addressable TV programmatic auctions, advertisers can reach unique premium inventory that isn't available in real-time bidding auctions (plus specific sections, and sub-sections on narrow-niche websites).

The number of clicks is not very indicative when we talk about connected TV ad campaign performance. Because clicks will only measure interaction on mobile devices where the users can stream video content.

That's why cost-per-completed-view (CPCV), video completion rate (VCR), and cost per mille (CPM, cost per 1000 views) performance metrics will be more descriptive. Cost-per-completed-view is a metric that's used most often for CTV campaign measurement. The lower is cost-per-completed-view the more money advertiser can save.

Best Internet-connected TV ad formats are usually full screens. They are far from the cheapest static ad formats in terms of CPM. They usually cost 3-5 times higher than average display ad formats including web video advertisements.

Yet, while the CPM of average video ads in normal circumstances reaches $10-$15, the CPM of connected TV ads pays off at $65. So, if CTV ads aren't the cheapest option, they can still serve as the most effective way to increase your video completion rate and decrease cost-per-completed-view.

More than 164 million U.S. Internet users access video content via connected TV devices, and this number is predicted to grow by up to 204.1 million viewers in 2022. The trend doesn't only encompass North America. The penetration of connected TV in the United Kingdom, Japan, Germany, and France will significantly grow according to the Interactive Advertising Bureau.

IAB Video Ad Spend Study illustrates that worldwide OTT video advertising revenues are growing quite fast. In 2022 they're expected to reach $80 billion.

By 2025 it is predicted that local ad spending in the over-the-top OTT segment will increase from $1.18 billion to $2.37 billion. When it comes to CTV, eMarketer forecasts that ad spending here will reach $25.5 billion by the end of 2024.

Connected TV advertising is slowly outgrowing traditional TV advertising. Connected TV audience targeting aims at tech-savvy people of various age groups that use different CTV devices.

OTT and CTV advertising appears on the screen like traditional TV commercials, the only difference is, TV viewing households will receive individualized ads while streaming the same show (based on their targeting data).

CTV advertising is a subset of the larger OTT advertising sector. In the nutshell, a CTV ad campaign makes it possible to personalize your digital marketing messages while the viewer watches content on different gadgets.

When ratings of TV channels are dropping, and price for the linear broadcasting climbs high, connected television provides a new medium to growing your audiences that never watch live television. Information about how customers behave on the Internet, what they bought earlier, their lifestyle preferences, etc., opens the gateway to endless advertising opportunities.

When users watch an ad on their personal Internet-connected device like a mobile phone, only one person can stream OTT content or see the digital advertising message. On devices called Smart TVs content is watched by several people.

According to statistics, your target audience will most likely watch smart television with family and friends, which significantly reduces the cost per impression for the advertiser.

Targeting is one of the best-connected TV benefits. Brands can also retarget TV-viewing households. In order to use smart television, users are required to log in via universal identifiers such as Facebook or Google accounts (that gather data).

Precise audience segmentation allows targeting brand-receptive audiences with relevant messages, bringing more value to the brand.

Connected TV supports the transmission of targeted, highly personalized, HD-quality ads with stereo sound, delivered fullscreen. Better ad quality, as a result, promotes brand loyalty and boosts brand exposure.

Connected TV advertising is highly entertaining. It allows marketers to experiment with animated, static, call-to-action, and interactive video ads that drive consumer engagement and increase the performance of the video content.

Connected TV advertising is a natural large-screen experience that results in high ad viewability. It imitates the traditional TV cable experience. Consumers not only pay more attention to CTV ads but also tend to watch them for a more extended period.

With connected TV marketers can actually measure ad campaign effectiveness by tracking the cost-per-completed-view, video completion rate, clicks, conversions, and direct responses.

Connected users choose the content they want to watch and the way to consume it and interact with it. Such high levels of control trigger high levels of satisfaction among viewers, which leads to a better perception and positive attitudes toward ads.

More than 20 percent of daily ad requests for CTVs are registered during primetime hours while premium content is streaming. This time includes live concerts and important sporting events, which suggests unique target audiences and potentially impressive returns for advertisers.

Best Internet-connected TV advertising practices will be different from those applied on the web, mostly because the medium will require good quality creatives developed in high resolution. Brands often underestimate the impact of original and memorable creative, but that is an essential visual hook that is supposed to convert viewers on big screens.

The rest of the practices for advertising on connected TV remain to be the same. They're equal to those typically applied for programmatic advertising.

An example. You sell the product for women aged 21 to 35, who have children and whose income is above average. Thus you need to set the target options accordingly in the dashboard of the CTV ad platform. After you launch a campaign, it analyzes the data received from household devices: two laptops, a tablet, and two smartphones, the system interprets that:

Thus, the algorithm understands that this household corresponds to the portrait of the perfect customer. After collecting information about the activity on individual devices, the algorithm determines that the primary content consumer in the family is a woman and delivers most of the smart television ads accordingly.

With SmartyAds advertisers receive access to premium OTT and CTV placements during primetime for various categories of content.

SmartyAds programmatic advertising platform supports all kinds of CTV ads on connected TV devices. The solution brings cord-cutting advertising experience to the viewers and outstanding opportunities to advertisers, who can tune it according to their own needs:

OTT and CTV are still television, it’s just even better than you’ve ever imagined!

For consumers, it’s a different way to watch television and movie content across many different types of screens – not just the big screen – with no cable or satellite subscription required. Think of names like YouTube TV and DirectTV Now in addition to other major players like Hulu, Amazon Video, NETFLIX, Roku, etc.

For advertisers, it’s an innovative way to reach a new, unique audience. Today’s viewers are turning to diverse viewing options that don’t necessarily involve a traditional TV set. They’re watching on smart TV’s, laptops, tablets, smartphones, game consoles and other connected devices such as Chromecasts, Amazon Fire TV Sticks, Roku and Apple TV.

Now you can reach TV viewers that can’t be reached with traditional linear TV commercials. The rise of  OTT & CTV viewership is creating new ways for advertisers to reach their target audiences by combining the impact of TV with the precision of digital. As a full service digital marketing agency, OTT & CTV advertising with Xcite means that you can now target, measure, and retarget TV-viewing households.

There is a lot to learn about this type of advertising and we’ve outlined all the important details for you below. Get in touch with us to see how OTT and CTV advertising can benefit your business. We’re here to help and look forward to hearing your questions!

Over-The-Top (OTT) is a reference to streaming TV content, because it’s circumventing traditional cable and satellite subscriptions to deliver video content. OTT content is watched through another device other than a television, like your smartphone, laptop, desktop or tablet.  If you are using a device like a Chromecast or Amazon Fire Stick to stream video content from your smartphone, laptop or tablet to your television, then this is considered OTT.

Linear TV is programming delivered in a standard, live, non-DVR’d manner. It is the standard way people have watched TV since 1948, when four television networks, (NBC, CBS, ABC, and DuMont), broadcasting over 128 stations, begin a full prime-time schedule 7 days a week.

Connected TV (CTV) refers to any TV that can be connected to the internet and access content beyond what is available via the normal offering from a cable provider. It also is all the devices that use a television as a display and can connect to the internet to access content. These are most often videos that are streamed via apps downloaded from a TV app store. Devices that are commonly classified as CTV devices are:

CTV advertising is skippable online advertising targeted to relevant content channels and/or audience groups. CTV inventory is premium, professionally produced television content; it’s not the banner display ads that sometimes appear on CTV devices. One main benefit of Connected TV advertising is that you can reach TV viewers that advertisers can’t reach without traditional TV commercials. Some others include:

Superior Targeting Capabilities: With Connected TV audience  targeting, you can be sure your marketing dollars are going towards your most valuable and targeted viewers.

Measurable Results: Our programmatic platform lets you measure the results of your Connected TV campaigns with both digital and traditional metrics, including video completion rates; you can also see the end-to-end customer journey from viewing a TV commercial to  making the purchase.

Growing Audience: Targets millennials and the growing % of the population who do not have cable TV and are actively looking at “cutting the chord.”

OTT TV originally focused on content delivery over the internet through Netflix, Hulu and Amazon, but now there are literally hundreds of streaming services that cater to individual niches, like episode content, short form content including local news or how-to tutorials, live streaming, video on demand and linear television. As viewers of all ages turn to OTT services, marketers are discovering new opportunities to target and align with key audiences. Advertisers can now pinpoint specific audiences with strategic brand messages. Benefits include:

Brand Safety – ads delivered during live TV or on demand are reached across top tier networks and popular content.

100% view-ability – All ads run full screen so 100% of pixels are in view, eliminating below the fold ads of other media vehicles.

Near Perfect Ad Completion – Viewers are watching the ads all the way through, with an average completion rate of 98%.

Retargeting OTT & CTV Viewers – You can retarget your OTT & CTV viewers across all their devices, including laptops, tablets, and mobile phones. Keeping your message top-of-mind throughout the decision-making process.

Measure the impact of your campaigns with both digital and traditional metrics, including video completion rate (VCR) and gross rating points (GRPs). These are the metrics we can report on to see the impact of your campaigns:

Connected TV (CTV) refers to the devices used to view video content. Examples of CTV devices include smart TVs, streaming devices, and game consoles. Desktops, laptops, smartphones, and tablets aren't considered examples of CTV by the IAB Tech Lab.

Connected TV (CTV) is an ad channel you can’t ignore: 46% of US consumers watch content on connected devices daily. With every major broadcaster launching over-the-top (OTT) offerings and independent players multiplying, the CTV advertising market is getting critical traction.

CTV ad spending is set to increase from $14.11 billion in 2022 to $18.29 billion in 2024. As Netflix and Disney+ (among many others) launch ad-supported tiers, ad inventory will also grow in volume.

However, media buyers have mixed feelings about CTV advertising. Colgate-Palmolive increased its ad reach by 58% and drove down the over-supply of linear TV ads with the help of CTV advertising. At the same time, over $1 billion in ad budgets are wasted on running ads when the CTV sets are off.

Generally, CTV advertising is perceived as difficult to measure. However, connected TV ads can provide data points equal in relevance to other digital channels with a proactive approach to partnerships and interoperability.

In this post, you’ll learn about:

The CTV market is an ecosystem. Participants include smart TV device manufacturers, standalone media players, OTT providers, and content distribution platforms. All of them have a heavy hand in the market because they own (but do not always share) consumer data.

To gain full visibility into CTV ad performance, ad platforms have to integrate data from multiple sources. What makes CTV measurement even harder is that no single player dominates the smart TV OS market or the OTT market.

Main types of CTV players

That said, the global CTV market has its “big four” players, holding most of the audience data (and advertising dollars).

Samsung was among the first to release competitively priced smart TV sets. As of 2020, some 162.3 million in-use Samsung Tizen devices sit in consumers’ homes worldwide.

On a global scale, Samsung is well ahead of the competition. LG webOS only holds 7.3% of the global market, followed by Amazon Fire OS with 6.4%, and Roku TV OS with 6.4%. However, Samsung lost its dominant status in the North American markets where Roku and Amazon took over.

The first Roku streaming device was released with Netflix in 2008. Since then, the company expanded its hardware product range, developed a companion Roku OS, and launched a programmatic CTV advertising network.

As of 2021, Roku has 61 million active monthly users in the US, which makes them an attractive platform for OLV advertising. Per Digiday, the average spend among returning Roku advertisers increased by 50% YoY — and the platform retains 96% of the advertisers that spent at least $1 million with them. Clearly, the ROAS is there.

Yet, Roku has been continuously struggling with hardware supply issues, and its market presence outside the US remains low.

Amazon entered the CTV space with affordable Fire sticks. Later it launched Fire TV (an edition of smart television sets) plus signed Fire OS distribution deals with popular device manufacturers (Insignia, Toshiba, JVC, and Grundig). In 2022, Amazon sold 150 million new Fire TV devices worldwide.

For the past six years, Amazon has been eroding Roku’s US market share, and now they are going head-to-head in the race. As of 2021, Amazon Fire has 50+ million monthly active users in the US.

The tide may soon change as Amazon eyes the emerging in-car video streaming market. In 2022, Amazon signed a deal with Ford Motor Co. to embed Fire TV OS in 2022 models. Separately, Amazon partnered up with Stellantis auto-conglomerate to become their exclusive OS distributor.

Separately, the Amazon Prime Video streaming service (available with Fire TV) also keeps onboarding customers. It’s now present in 45% of U.S. internet households, and globally, Amazon Prime Video has 252 million subscribers. Stirring multiple pots, Amazon is a powerhouse player in the CTV advertising market.

Google entered the connected TV space with Chromecast devices (smart TV sticks), but quickly assembled a larger ecosystem of products. Android TV platform is the original Google OS for smart TV sets.

In 2020, Google released a major upgrade to Android TV and rebranded its offering as Google TV. At its core, Google TV is a new interface running on top of the original Android TV OS. It comes pre-installed with new Chromecast devices and will now be the primary interface for smart TV manufacturers that opted for Android TV OS.

Shalina Govil-Pai, VP of Android TV and Google TV, said that Google’s objective is to progressively phase out Android TV and make all third-party users shift to Google TV.

Android TV (now Google TV) already comes pre-installed on smart TVs from brands like TCL, Sony, Hisense, Sharp, Philips, and others. As of 2022, Google has 110 million active monthly devices globally, which puts them close to Samsung.

Device and data fragmentation is the bane of all new channels like in-game advertising or DOOH. Sourcing data from multiple smart TV sets, OTT providers, and OS is technically complex. In addition to many conflicting requirements and limitations is a lack of standardization. Combined, these factors complicate CTV ad measurement.

On the other hand, as Tal Chalozin, CTO and Co-Founder at Innovid, an independant CTV measurement platform, rightfully noted:

More advertisers consider CTV advertising. AdTech companies that can develop better CTV ad measurement solutions and provide precise attribution metrics will emerge on top.

CTV attribution is hard primarily due to the absence of shared standards for measurability.

Back in the day, Nielsen pioneered measurement for linear TV advertising. Though the company made a tentative move into CTV measurement, both of its frameworks are often criticized for inaccurate audience counts.

Brands (and their agency partners) are on the hunt for a better measurement solution. Which one will it be? The following could resolve the following CTV measurement and attribution issues.

The digital advertising space relied on third-party cookies for years to identify, track, and report user behaviors. Now the industry works towards universally acceptable cookieless tracking and shared user ID solutions.

CTV ad space faces a similar dilemma: It needs cross-platform identifiers. IP addresses have been the most common means of identifying households as they are easy to capture. Most programmatic CTV advertising uses IP addresses for targeting and remarketing.

But is an IP address a reliable ID? No. Many consumers share streaming accounts and use various devices to view the content (i.e., the IP address changes, but the user stays the same or vice versa). Because neither supply-side platforms (SSPs) nor demand-side platforms (DSPs) can precisely ID users, a lot of budgets are wasted. For example, if a brand buys connected TV ads through Roku and via a DSP platform, they risk marketing ad duplication. According to the Innovid x ANA Report:

The average publisher duplication rate for CTV ads is 32%. Also, the average ad frequency was 6.4 across all campaigns, meaning 14% of households were exposed to the same ad 3-9 times on average.

So what are the good options? CTV-specific user identity graphs may help. Digital ID providers like Ramp ID (former IdentityLink) and Tapad recently added connected TV to their omnichannel identity graphs. However, both solutions still primarily rely on IP addresses for initial user identification. Then they augment the created identity with other data points.

An IP-based approach to user IDs wasn’t a problem…until recently. As part of the Privacy Sandbox, Google released a proposal called Gnatcatcher. Its premise: disguise people’s IP addresses as these are considered personally identifiable information (PII) under the California Consumer Privacy Act (CCPA) and European GDPR.

No viable alternatives to IP addresses have been found so far, apart from fist-party-based ID solutions built by different players in the ecosystem. That said, IP addresses aren’t definitely going away just yet. So the industry has time to come up with new ID types like device graphs or universal user ID graphs.

When you ask an Ad Ops which CTV measurement metrics they use, you’ll get an entire spreadsheet of answers:

Buyers want both familiar linear TV metrics and programmatic ones. Yet, many DSPs and SSPs struggle to deliver such a large roster of accurate insights. So brands are eager to test multiple CTV attribution options on the table. The Trade Desk, Verizon Media, and Viant Technology already went with iSpot. Xandr, ABEMA, Smadex, and tvScientific have selected Adjust.

Why do brands want multiple partners? Because the “big four” CTV platforms (Samsung, Roku, Amazon, and Google) employ proprietary approaches to measurement (which they don’t fully disclose). There’s no neutral entity like Nielsen to verify their claims.

Also, fragmentation exists on the AdTech level, where buyers can purchase CTV ads via different ad networks or from CTV/OTT platforms directly. This further splinters audience data and complicates measurement.

Since most platforms rely on IP addresses for user identification, it’s hard to determine who saw the ad: the same person on two different devices, multiple people on one device, or multiple people via the same OTT app.

Also, CTV/OTT ads rely on the server-side ad insertion (SSAI) mechanism. It seamlessly integrates ad videos into the streamed content. SSAI is resistant to ad blockers and allows low-latency ad serving. However, SSAI needs accurate device ID data to deliver accurate impression counts.

In 2019, IAB released guidelines for identifying CTV/OTT devices and apps. However, these guidelines aren’t comprehensive. For example, not all platforms can supply “app store IDs” to ad networks.

Using WURFL device detection database is one workaround. It streamlines user device identification (device model, browser, OS, screen width, etc.). WURFL can be used to improve CTV attribution when paired with machine learning. Still, the setup process is quite complex.

Market fragmentation means that consumers have a lot of choices. Naturally, most switch between watching linear TV, using CTV apps, and OTT services on mobile.

The wrinkle? Few exchange data with one another. Audience data is siloed between:

As a result, procuring data points such as device ID, audience demographic, or average viewership is hard, even for original content owners. Distributors typically hold most of the data to attract demand, though some publishers now buy back audience insights. Getting a consolidated view of video content viewership rates is somewhat problematic.

Programmatic ad fraud is a gruesome industry issue. CTV ads are no exception.

Complex attribution stands behind high IVT rates in CTV advertising. Because verified data is hard to produce, faking ad impressions for CTV is easier than for desktop or mobile devices (although sophisticated ad fraud detection mechanisms might help).

Organizations like IAB Open Measurement, Media Rating Council (MRC), Trustworthy Accountability Group (TAG), and Brand Safety Institute have released comprehensive CTV ad fraud prevention guidelines. The challenge, however, lies in implementing them.

No single metric can indicate the success of a CTV ad campaign. To reassure the buy-side, AdTech players have to provide a roster of cross-channel metrics, proving ad validity and viewability.

Of course, the best industry minds are working on the CTV measurement problem. In Q3 2022, IAB released a CTV version of Open Measurement SDK (OM SDK). IAB Tech Lab plan to make it a common framework for interoperability:

OM SDK is a helpful tool but not a stand-alone solution. To improve CTV measurement, you need to combine several best practices.

Because access to audience data is constrained, no best-of-breed user attribution solution is available. Instead, the industry tests various methods for identifying users and tracking their interactions with content.

IAB suggests that the path pass forward would be using hybrid measurement approaches that combine:

The combination of these signals can enable industry players to minimize ad duplication and better distinguish between linear TV, CTV app feeds at the household and individual levels, and broadcast video on demand (BVOD).

Separately, user ID data such as identifiers for advertising (IFAs), CTV IDs, device IDs, and IP addresses could be cross-matched with audience profiles across platforms. In fact, most market players are making strides in this direction.

Verizon Media ID

Verizon Media ConnectID already includes CTV household data. In 2021, Verizon Media also partnered with smart TV manufacturer VIZIO to gain even more viewership data from some 18 million VIZIO Smart TVs devices. The partnership enables Verizon Media to offer expanded CTV targeting, optimization, and measurement opportunities for their DSP advertisers.

Roku Advertising Watermark

At the beginning of 2022, Roku released Advertising Watermark – a platform-native way to validate video ads’ authenticity on the Roku platform. Publishers can use Roku ad measurement beacons to bot mitigation platforms like HUMAN and third-party ad measurement platforms to verify that their ads were generated by Roku devices. This mechanism prevents device spoofing. Discovery and FOX are already among Roku’s Advertising Watermark adopters. Also, the watermark is embedded into Roku’s ad buying platform, OneView.

Since CTV is a cookieless environment, precise audience measurement is complex but possible. Media Rating Council (MRC) has an exhaustive list of standards and approaches to cross-media CTV audience measurement.

In short, there are two main options:

Once again, leaders don’t settle for one option. Most establish extensive audience measurement with Automatic Content Recognition (ACR) technologies.

ACR matches individual objects in a video with database records to identify and recognize streaming content. The technology includes either or both video pixel detection (video fingerprinting) and audio capture (acoustic fingerprinting).

ACR-supported devices (smart TVs, smartphones, and tablets) allow ad networks to capture these data points:

Tech-wise, ACR algorithms generate library-side fingerprints for the publisher’s media. Fingerprints are designed to compare sample video/audio content against references in the publisher’s database to identify the played content. When a viewer browses content via an ACR device, they generate extra fingerprints, which then get matched to stored records.

Based on matches, AdTech platforms access the above data for targeting, measurement, and attribution. Next, ACR data can be cross-validated with passive or digital metering for even higher accuracy.

iSpot audience measurement with ACR

iSpot developed a robust cross-channel TV measurement tech suite for detecting ACR-sourced ad impressions across 51+ million smart TVs and some 155 networks across the US.  The platform relies on intelligent algorithms for matching impression counts against set-top box data and a person-level panel for extra precision. Separately, ad impressions are verified manually by a team of editors.

Such a comprehensive TV ad measurement stack made iSpot the biggest challenger to Nielsen. Its publishing partners already include NBCUniversal, Samba TV, and Crackle Plus, among others. On the AdTech side, iSpot secured deals with The Trade Desk, Verizon Media, and Google Ads, among others.

Brands can track connected TV ads using standard performance metrics like ad viewability, quartile rates, and completion rates. However, these don’t always provide an accurate picture.

Ad verification firm DoubleVerify found that one in four CTV platforms continued playing content, including recorded ad impressions, after the TV set was turned off. Ouch, this better get fixed — and it likely will be.

In June 2022, GroupM launched an initiative to cocreate a streamlined measurement framework and best practices for verifying that ads only get served when CTV screens are on. Companies, including Disney, LG Ads Solutions, NBCUniversal, Paramount, VIZIO, Warner Bros, Discovery, and Fox/Tubi, are already on board.

Double Verify, in turn, chimed in with a Fully On-Screen certification. Accredited by the Media Rating Council, Fully On-Screen ensures that ads are only displayed when the TV screen is turned on, and content is fully on-screen.

IAB also recommends using the cost-per-completed viewable view (CPCVV) metric since it’s the most efficient and value-driven option.

Most advertisers choose CTV to improve ToFU metrics like brand awareness and consideration. Also, they want to understand how many unique audiences OTT video campaigns engage on top of linear TV campaigns.

Respectively, buyers want to see brand lift and incremental reach stats in their dashboards. In CTV/OTT advertising platform development, you have several ways to deliver these stats.

Brand lift tracking options:

Incremental reach tracking

ACR is a firmware-based solution. ML-based contextual targeting is a conceptually similar solution but on a software level. This option might be better suited for AdTech companies that don’t want to source ACR data from multiple CTV platforms.

Apart from monitoring user behaviors similar to ACR, ML-based contextual targeting systems can:

Combined, these qualities make ML based contextual targeting a competitive add-on for your ad network.

Integrate a third-party CTV ad measurement SDK

At the end of the day, brands want guarantees. Many CTV platforms have already voiced their support for OM SDK:

What about the remaining options like Roku, Samsung Tizen, LG Web OS, and others? If you work with those providers, you’ll have to build a custom SDK for integrating third-party measurement partners. You can turn to professional tech consultants like Xenoss to build a custom SDK for integration and resolve other challenges of the CTV/OTT advertising platform development.