What Is CTV Advertising? Understanding What It Is and How It Works

In recent years, advertising has undergone a massive transformation through different types of technology and new information. One of the most significant developments is in  Connected TV (CTV) advertising.

CTV advertising is digital advertising that involves running ads on internet-enabled television sets or devices. With more people streaming content on their smart TVs, CTV advertising has become an increasingly popular medium for marketers to reach their target audiences.

This post will dive deep into CTV advertising, how it works, and its uses for making a more meaningful connection with your viewership.

What is CTV advertising?

CTV Advertising is digital advertising that delivers ads through internet-connected TV sets or devices. CTV stands for Connected TV, which refers to television sets that can connect to the Internet to stream content from various providers such as Hulu, Netflix, and Amazon Prime.

CTV devices include smart TVs, streaming sticks like Amazon Fire Stick and Roku, gaming consoles like Xbox and PlayStation, and other devices that allow users to stream content over the Internet.

Digital Element, a leading IP geolocation provider, is connected to CTV advertising by enabling advertisers to target audiences based on location data. This helps advertisers deliver more relevant ads to their target audiences, leading to better engagement and higher conversion rates.

What is the difference between OTT and CTV?

If you’re new to the world of streaming, it’s easy to get confused between CTV and OTT. While both technologies are related to video streaming, they are different.

CTV, which stands for Connected TV, refers to any TV connected to the Internet, such as smart TVs, gaming consoles, and streaming devices like Apple TV and Roku.

OTT, on the other hand, stands for Over-the-Top, and it refers to any video content delivered over the Internet, bypassing traditional cable and satellite providers. In other words, OTT provides TV and video content that doesn’t require a cable or satellite subscription.

The critical difference between CTV and OTT is that CTV refers to the device, while OTT refers to the content delivery method. While all CTV devices can stream OTT content, not all OTT content is available on CTV devices.

Some popular OTT platforms include Netflix, Hulu, Amazon Prime Video, and Disney+. These platforms offer movies and TV shows that can be streamed on multiple devices, including CTVs.

Why CTV advertising is important

CTV advertising has gained immense popularity recently, and for a good reason. It offers several positive features that traditional advertising methods cannot match.

Firstly, CTV advertising allows businesses to reach a highly engaged and targeted audience. With more and more people shifting from traditional TV to CTV, companies can reach a younger, tech-savvy audience who prefer to watch their favorite shows and movies on streaming devices.

CTV advertising also gives businesses greater control and flexibility over their ad campaigns. Advertisers can customize their ads to target specific demographics, geographic locations, and interests.

This allows corporations to maximize the effectiveness of their ad campaigns and achieve a higher return on investment. Additionally, CTV advertising offers greater transparency and analytics, allowing businesses to measure their ad campaigns’ success accurately.

Another significant feature of CTV advertising is that it provides a non-intrusive way for your firm to advertise its products or services. Unlike traditional TV ads, which are often skipped or ignored, CTV ads are less likely to be ignored or overlooked. This is because viewers cannot fast-forward through CTV ads, which are usually short and to the point. As a result, CTV advertising has a more meaningful and less intrusive interaction than traditional TV ads.

Most importantly, CTV advertising is more cost-effective for businesses. With traditional TV advertising, businesses have to spend significant money on ad slots that may or may not reach their intended audience. In contrast, CTV advertising offers a more affordable option with a higher chance of getting the desired target audience.

Benefits of CTV advertising

Now that we understand why CTV advertising is essential, Let’s explore some of the most popular benefits of CTV advertising compared to more traditional methods. After all, it is a crucial decision to take when considering your ad spend budget.

Geotargeted advertising

Geotargeted advertising is an effective marketing strategy that uses location-based data to reach a specific audience in a particular geographic area. This approach allows businesses to personalize their ads and target consumers based on their location, which is particularly advantageous for small and medium-sized enterprises (SMBs) looking to reach potential customers in their local area.

For instance, a local restaurant can use geotargeting to show ads to people within a certain radius of their location, increasing the chances of those visiting their establishment. Geotargeting can also help larger businesses target specific regions with relevant promotions or offers, increasing engagement and conversions.

Geotargeted advertising can improve the effectiveness of marketing campaigns by reaching the right audience at the right time and place while saving money by reducing the cost of advertising to people who are unlikely to be interested in their products or services.

Digital Element’s geolocation technology can help businesses optimize their geotargeted advertising through accurate audience targeting. Using Digital Element’s data, companies can target their advertising campaigns to specific locations, improving ad placements and increasing engagement.

This technology benefits programmatic advertising on mobile devices, internet-connected TVs, Chromecast, and Amazon Fire TV. It enables real-time, full-screen ads that work seamlessly with DSPs and ad-supported video advertising platforms.

Precision targeting

Precision targeting is an effective marketing strategy that uses specific criteria, such as location, demographics, interests, and behavior, to deliver ads to a highly targeted audience.

With the data collected from CTV devices, advertisers can create highly targeted campaigns more likely to reach their desired audience. This saves time and resources and ensures that ad spend is used efficiently.

For example, a real estate agent could use geotargeting to show ads only to people in the area where they are selling properties, increasing the likelihood of finding a buyer.

Precision targeting is a powerful tool for advertisers to optimize their campaigns and increase engagement and conversions. It can be used across various devices, including connected TVs, smartphones, and on-demand services.

Reaching massive audiences who are already consuming content

CTV advertising offers businesses the advantage of getting a broad and attentive audience already consuming content on connected TV devices. With current projections, sales of CTV devices are expected to continue to increase into 2025, making it a valuable platform for marketers.

This means businesses can leverage CTV advertising to gain access to this vast audience and tailor their advertisements to target specific demographics or interests, significantly enhancing the chances of conversions. With CTV advertising, businesses can increase brand awareness and drive sales among consumers already invested in the content they watch.

Increased engagement

CTV advertising provides viewers with a more immersive and engaging experience, leading to higher engagement rates than traditional forms of advertising. CTV ads are often non-skippable and run during ad breaks, providing a captive audience for businesses to showcase their products or services.

This type of advertising also allows for interactive ads, such as shoppable ads, which enable viewers to purchase products directly from the ad without leaving the screen. This increases engagement and reduces friction in the purchase process.

Businesses can also measure the effectiveness of CTV campaigns using metrics such as attribution, video completion rate, and other formats. By tracking these metrics, businesses can improve the performance of their campaigns and maximize their ad spend. This helps businesses and advertisers better understand their audiences and optimize their campaigns to reach their target audience more effectively.

Likewise, CTV advertising is not limited to just smartphones and streaming services. CTV ads can also be displayed on laptops and other internet-connected devices. This means that businesses and advertisers have the opportunity to reach audiences across multiple platforms, increasing their reach and potential for conversions.

By measuring metrics and optimizing campaigns, businesses can improve the effectiveness of their advertising efforts and reach their target audience more effectively.

Security concerns in CTV advertising

As more and more people switch from traditional linear TV to streaming services, traditional advertising methods are also starting to give way to new methods, like CTV advertising. However, with this shift, new security concerns also arise, such as the use of IP addresses.

To address these concerns, your marketing department must take steps to protect user privacy and security. One approach is to use geolocation technology to identify and prevent fraudulent activity on CTV devices.

This technology can also help ensure compliance with GDPR and CCPA. Additionally, encryption and data anonymization can be used to protect user data and prevent it from being sold to third-party advertisers.

CTV advertising offers many benefits for businesses and advertisers, but taking security concerns seriously is essential. Using geolocation technology, encryption, and data anonymization, companies can protect user privacy and ensure compliance with regulations.

Achieve higher conversion rates in CTV advertising with Digital Element

CTV advertising offers businesses a unique opportunity to reach audiences in a new way. By leveraging the benefits of geotargeting, precision targeting, and increased engagement, businesses can create more effective ad campaigns and ultimately achieve higher conversion rates. However, it’s vital to consider the security concerns of CTV advertising and how to address them.

With Digital Element’s technology, businesses can mitigate these risks and ensure effective and secure advertising campaigns. If you want to learn more about how Digital Element can help your business with CTV advertising, contact us to see the Digital Element difference.

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