What is Connected TV?

Connected TV represents a significant shift in how content is consumed and advertised. With its ability to deliver targeted, data-driven ads to highly engaged audiences, CTV offers unparalleled opportunities for advertisers. As the industry evolves, staying ahead of trends and leveraging CTV's full potential will be crucial for brands looking to maximize their advertising impact.

For advertisers, it's crucial to understand not only what CTV is but how they can effectively navigate the CTV landscape, ensuring their advertising efforts are impactful and efficient.

What is Connected TV?

Over-the-top (OTT) describes a streaming service delivered to consumers over the internet, bypassing the linear approach of delivering content ‘over the air.’

Video-on-demand (VOD) services are provided by broadcasters and other media companies to allow consumers to stream unlimited content at their convenience, i.e., not tied to a schedule. These can be broken down further as: 

• Subscription Video-On-Demand (SVOD): Consumers pay a monthly or annual subscription and can consume content without advertising, such as Netflix, Amazon Prime, and Disney+. 
• Ad-Supported Video-On-Demand (AVOD): The ad-supported model offers similar content but includes advertising to make the service either free, such as Pluto TV, YouTube and Tubi, or discounted, for example, Netflix, Amazon Prime and Disney+ all offer ad-supported models now. 
• Broadcast Video-On-Demand (BVOD): An on-demand service offered by broadcasters, usually including some kind of ‘live’ feed of their content. Examples include ITVX and Channel 4. 

Free Ad-Supported Streaming Television (FAST) are free streaming channels that follow a linear programming format. Content is aired to a schedule with advertisements interspersed throughout the content. Examples include Samsung TV Plus, Freevee, and Roku Channel.

Connected TV (CTV) refers to any television that connects to the internet, allowing users to stream content directly from the web. This category includes smart TVs, devices like Roku and Amazon Fire Stick, and gaming consoles like Xbox and PlayStation. Unlike traditional broadcast or cable TV, CTV leverages the internet to deliver content, enabling a more interactive and personalized viewing experience.

Due to the proliferation of acronyms and the inevitable confusion they create, Connected TV (CTV) has emerged as a catch-all term for all the above services.

What are the key trends impacting Connected TV?

Three key industry trends have led to the heightened focus on CTV. Firstly, consumer behavior. The shift from traditional 'over-the-air' TV to streaming services has been significant, driven by consumer demand for on-demand content. Streaming platforms like Netflix, Disney+, and Amazon Prime Video have become household staples, contributing to a steady decline in traditional TV viewership. This trend accelerated during 2020, with a 37% increase in streaming consumption as people sought entertainment during lockdowns.

Secondly, as content consumption moves to digital platforms, media owners collect vast amounts of first-party data. This data is crucial for understanding audience behaviors and preferences, enabling more targeted and effective advertising campaigns. Gathering and analyzing data directly from viewers offers a significant advantage over traditional TV models. The move to data-driven, addressable media has propelled CTV's rapid growth. The shift from broadcast TV to digital channels (making content trackable and measurable), combined with the demand for richer customer data, has transformed advertising strategies. This perfect storm of measurable, addressable media shifted the focus from programmatic display to programmatic TV.

With rising concerns over data privacy, consumers are increasingly cautious about how their data is collected and used. High-profile data breaches and misuse cases have amplified this awareness, leading to stricter regulations and more robust privacy measures. Unlike the rise of RTB display, where privacy was often an afterthought, programmatic and addressable TV—particularly Connected TV (CTV)—has prioritized privacy from the outset. As CTV providers handle larger volumes of customer data, they’ve focused on transparency and security to maintain trust. This emphasis on privacy, coupled with the development of Data Clean Rooms (DCRs), has fueled the growth of CTV. Additionally, the connection between Retail Media Networks (RMNs) and CTV underscores the industry's shift toward data-driven, privacy-conscious advertising.

What are the benefits of Connected TV Advertising?

Connected TV (CTV) advertising offers several key benefits that enhance its effectiveness compared to traditional TV advertising. Firstly, it provides unparalleled targeting precision, allowing advertisers to tailor their messages to specific demographics, interests, and behaviors. This precision ensures that ads are more relevant to the audience, increasing their impact and effectiveness.

Additionally, CTV platforms offer detailed, data-driven insights into viewer behaviors and engagement. This allows advertisers to continuously optimize their campaigns, leading to higher returns on investment (ROI). Not to mention the transparency and control over campaign measurement, which was never possible with traditional TV. CTV could now be measured alongside other forms of media to capture the full consumer journey/funnel. This would drive more money into CTV and away from traditional TV because the ROI and ROAS could be accounted for. Furthermore, CTV typically enjoys higher engagement rates thanks to interactive ad formats like clickable video ads. These formats make the advertising experience more immersive and engaging, resulting in better brand recall and higher conversion rates.

What are the different Connected TV Advertising formats?

Video Ads

Video ads are the most common format in CTV advertising. These can be pre-roll (played before the chosen content), mid-roll (during the content), or post-roll (after the content). They leverage the visual and auditory elements to capture viewers' attention and convey messages effectively.

Interactive Ads

Interactive ads engage viewers by allowing them to interact with the ad content. This can include clickable elements that lead to additional information or a call to action. Interactive ads enhance consumer engagement and can drive higher conversion rates.

Shoppable Ads

A sub-category of interactive ads, shoppable ads enable viewers to purchase directly from their television screens while watching content. These ads are designed to bridge the gap between advertising and e-commerce, making it easy for consumers to engage with and buy products without leaving their viewing experience.

Sponsored Content

Sponsored content involves integrating advertisements seamlessly into the content viewers are watching. This method ensures that the ads are less intrusive and more aligned with the viewing experience, making them more palatable to the audience.

Pause Ads

Pause ads are a type of advertisement that appears when a viewer pauses the content they are watching on a Connected TV or streaming service. Unlike traditional ads that play during the content, pause ads are static or lightly animated images displayed on the screen when playback is paused. This format leverages natural breaks in viewing to present ads in a less intrusive manner, often making the viewer more receptive to the message as they are already taking a break from the content

What role do data clean rooms play in Connected TV?

Data collaboration is a critical component that enables organizations to unlock the full value of Connected TV (CTV) advertising. Data clean rooms (DCRs) are pivotal in facilitating secure, privacy-conscious partnerships without risking customer privacy or competitive advantage. By allowing brands, media owners, and CTV providers to collaborate and analyze data securely, DCRs enhance targeting, personalization, and overall campaign effectiveness. Moreover, DCRs prevent marketers from falling into the same traps as with display advertising by building control and transparency into every step of the process. This ensures that advertisers, media owners, and Multichannel Video Programming Distributor (MVPD) intermediaries can uphold privacy while delivering effective campaigns. Media owners and content producers, in particular, recognize the value of their first-party data, and CTV allows them to not only control and protect it but also monetize it on their own terms.

Enhanced targeting is one of the primary benefits of using data clean rooms in CTV advertising. Data collaboration enables brands to compare their first-party data with the addressable audience of the CTV provider, creating highly targeted campaigns. Brands can build customized audience segments by understanding current and target customers' behavior and content consumption patterns, tailoring messaging to resonate with specific viewers. This precise targeting ensures that ads reach the most relevant audiences, increasing engagement and conversion rates. CTV has transformed how TV ads are bought, shifting from the traditional upfront model—where marketers committed millions (or even billions) to unmeasurable performance—to a model similar to programmatic display ads, allowing for real-time measurement and optimization.

Improved ROI and a seamless customer experience are additional advantages of utilizing data clean rooms in CTV advertising. Targeted, personalized advertising leads to higher engagement rates and better conversion, resulting in improved ROI for brands. Efficient data use ensures marketing budgets are spent wisely, reaching the most relevant audiences. Moreover, data collaboration helps create a seamless customer experience, ensuring that advertising feels natural and relevant. Brands can integrate their messages into the viewer’s content consumption journey in a cohesive and non-intrusive way.

As privacy regulations evolve, data collaboration strategies that prioritize transparency and consumer consent will be better positioned to adapt. Working together in the protected environment of a data clean room allows CTV providers and brands to manage and utilize data responsibly, maintaining consumer trust and staying ahead of regulatory changes. DCRs also open new possibilities, enabling marketers to mix and match data partners and signals to fine-tune campaign targeting. Publishers and content distributors can similarly leverage data providers to enhance measurement and provide closed-loop and mid-flight optimization analysis. 

What data is used to collaborate on Connected TV campaigns?

CTV advertising leverages various data sources, enabling advertisers to create highly targeted and effective campaigns. By integrating multiple data streams, CTV advertising can offer a deep understanding of audience behavior and measure the impact of advertising efforts with precision. Here’s an overview of the key data used in CTV advertising at different stages of a campaign:

Pre-Campaign

CTV Addressable Audiences Data: The CTV provider contributes data on consumer behavior and content consumption. This includes insights into what types of shows and movies viewers watch, how often they engage with the platform, and their interaction patterns. Such data helps in refining targeting strategies to reach the most engaged audiences.

‍Advertiser's First-Party Data: Advertisers utilize their first-party data, which includes information gathered through direct interactions with their customers. This data encompasses user behaviors, preferences, and past interactions with the brand, allowing advertisers to craft personalized and relevant ad messages.

‍Data Providers' Enrichment Data: Enrichment data from external second and third-party providers adds another layer of demographic, psychographic, and behavioral insights. This data enhances the understanding of target audiences by providing additional context, such as age, gender, interests, and purchasing behaviors.

Multichannel Video Programming Distributor (MVPD) Data: MVPDs provide data on viewer behavior across multiple streaming platforms, including cross-media owner habits and device usage within households. Acting as intermediaries, they distribute targeted ads across various streaming services and offer additional insights that improve targeting precision. Their dual role as mobile and cable providers allows them to connect behaviors across content mediums, enhancing campaign efficiency.

By integrating these pre-campaign data sources, advertisers can design and execute fine-tuned campaigns to reach high-value and on-target audiences.

Post-Campaign

CTV Exposure Data: Post-campaign, the CTV provider contributes exposure data highlighting who viewed the ad and their subsequent actions on the platform. This includes metrics on ad completion rates, click-through rates, and other engagement indicators. Such data is vital for measuring the effectiveness of the ad in driving user actions and engagement.

‍Advertiser's Outcome Data: Advertisers analyze outcome data to measure engagement, conversions, and sales attributed to the campaign. This data is crucial for understanding the direct correlation between the CTV ads and consumer actions, such as website visits, product inquiries, and purchases.

‍Retailer Outcome Data: Increasingly, retailers are collaborating with CTV providers to contribute point-of-sale outcome data for measurement purposes. This data is crucial for understanding the incremental impact of CTV ads on consumer actions. It includes metrics such as in-store and online purchases, product inquiries, and other consumer behaviors that indicate the campaign's effectiveness.

By consolidating these post-campaign data sources, advertisers can evaluate the success of their campaigns and refine their strategies for future efforts. Incrementality analysis is often employed to determine the true impact of the campaign on key performance metrics, such as brand lift and sales uplift.

What results are Connected TV collaborations delivering?

‍UK broadcaster Channel 4 and Nectar360, the loyalty card program of Sainsbury’s, launched RET4IL, leveraging combined data intelligence to target audiences at scale. This collaborative effort with CPG partners like McVitie’s, McCain, Pepsi, Walkers, Garnier, and Weetabix yielded remarkable outcomes. The campaign delivered an impressive sales uplift, up to 122%, with an average uplift of 29% across all partners. Notably, product-focused creatives saw a substantial 56% uplift.

UK broadcaster ‍ITV's collaboration with a challenger bank for a campaign across ITVX exemplifies the tangible benefits of data clean rooms. By comparing advertising exposure data to app download data, ITV demonstrated an 18% lift in downloads generated by the campaign. 

Food delivery company Deliveroo collaborated with Channel 4 using the InfoSum Secure Data Clean Room to plan, activate, and measure a national advanced TV advertising campaign. Notably, this collaboration occurred without sharing or exposing their data. By leveraging their first-party data securely, Deliveroo and Channel 4 accurately calculated the incremental impact of the campaign. The result was a substantial 20% increase in app sign-ups.

Beer brand Cristal collaborated with Ads & Data, an alliance in Belgium between Mediahuis, Play Media, Proximus, and Telenet, using InfoSum's Secure Data Clean Room for a campaign. The goal was to maximize incremental reach across linear TV, BVOD, and addressable TV. By identifying and excluding individuals already exposed to ads using InfoSum’s data clean room, they achieved a 2.5x increase in incremental reach and a 2.8x increase in purchase intention.