Over the past several years, connected TV (CTV) viewership has skyrocketed. As more and more people turn to CTVs to consume video content, it’s no surprise that digital ad spend follows. Marketers want to reach people when and where they’re watching video, and with over 109 million US households using a connected TV in 2022, CTV advertising is like blasting Mariah Carey the day after Thanksgiving: it just makes sense.
With this channel’s explosive growth has come a similar influx of terms (and acronyms, because we in the ad industry love our acronyms—IYKYK) to describe the CTV viewing and advertising experiences. Couple this with the complexity of today’s digital marketing landscape, and it can be downright overwhelming. For those marketers left wondering what the heck the difference between CPV and CPCV is, don’t worry—we’ve got you!
Here, we’ve broken down the terms and definitions advertisers need to know to make the most of the connected TV advertising opportunity:
Connected TV Basics
- Advanced TV, at its simplest, is an umbrella term that refers to the marriage of television and technology, which allows for more precise and sophisticated targeting, measurement, and tracking. It includes everything from connected TV, to addressable TV, to programmatic TV, to data-driven linear TV.
- Connected TV (CTV) is the term used for any television that is connected to the internet. CTVs include smart TVs, as well as those that can access the internet via an over-the-top (OTT) device, a set-top box, or a gaming device that serves as an OTT device. Learn more about the basics of CTV advertising here.
- Convergent TV refers to the intersection of traditional/linear TV, over-the-top streaming, and connected TV.
- Digital video is video that is encoded in digital data. It is the most widespread format used today, largely because of how easy it is to share, store, and copy.
- Linear TV, sometimes called “traditional” TV, refers to content that is delivered at a designated time—traditionally via cable, satellite, or broadcast.
- Over-the-top (OTT) is a method of delivering video content to users through the internet, rather than via cable, broadcast, or satellite. Though sometimes used interchangeably, OTT and CTV are distinct! OTT content includes video viewed on all devices, but CTV content only includes video watched on a TV. A helpful way to remember: all CTV is OTT, but not all OTT is CTV (sort of like how all squares are rectangles, but not all rectangles are squares).
- Over-the-top (OTT) content is any video that is offered directly to viewers via the internet, where consumers can access it on-demand.
- Programmatic TV refers to purchasing and placing ads in TV content in an automated and data-driven manner, often by using a DSP.
- Streaming is when consumers access video and audio content continuously through a server, rather than via download or live broadcast.
- Subscription video on demand (SVOD) requires users to have a subscription to access video content when and where they want to (think: Netflix, Disney+, Paramount+, etc.)
- User-generated content (UGC) includes any form of content—from pictures, to text, to audio, to video—that is created and shared by users, often via social media (think: TikTok, Instagram, Twitch, etc.)
- Video on demand (VOD) allows users to access video directly and immediately.
Types of Connected TVs
- Smart TVs are television sets that have built-in internet capabilities, which allow users direct access to OTT content.
- TVs + over-the-top (OTT) devices can be used together to access streaming content. Examples of OTT devices include Amazon’s Fire TV, Roku, Apple TV, or Google’s Chromecast.
- TVs + gaming consoles function much like TVs + OTT devices: In this setup, gaming consoles (such as PlayStation or Xbox) connect viewers to the internet and provide access to OTT content.
- TVs + set-top boxes, such as Blu-Ray players, also allow viewers to stream video content via the internet.
Connected TV Viewers and Viewing Habits
- Cord cutters are people who have transitioned away from linear TV to 100% streaming.
- Cord nevers are those who have never subscribed to linear TV and receive all their video content by streaming.
- Cord shavers are folks who have a combination of linear TV and CTV in their household.
- Co-viewing describes when more than one person is watching TV on the same device, at the same time. When an ad plays, all viewers see it simultaneously!
- Dual screening is when viewers are consuming content on more than one screen, at the same time. (Or, in other words, it’s having to rewatch the same scene over and over again because your BFF won’t stop texting you hilarious TikToks).
Connected TV Advertising
- Addressable TV is content in which advertisers can place video ads that target specific audiences, as well as track and measure the results of said ads.
- Addressable video-on-demand describes the marriage of addressable TV and video on demand. It allows advertisers to access advertising inventory within on-demand content and to target ads to specific households and demographic groups.
- Ad-supported video-on-demand describes streaming and other on-demand services that offer ad inventory to media buyers. Up until recently, some of the streaming giants (ahem, Netflix and Disney+) were not ad-supported. But, as the song goes, “The times, they are a-changin’.”
- CTV advertising refers to placing ads for audiences to view specifically on CTV devices. Just like OTT and CTV content, all CTV advertising is OTT advertising, but not all OTT advertising is CTV advertising. Learn more about CTV advertising best practices.
- CTV advertising automation is how marketers can effectively streamline today’s media complexity and make the most of the CTV advertising opportunity. CTV advertising automation automates key tasks within the media buying process, optimizing the way media teams plan, activate, and execute their CTV campaigns so advertisers can focus on strategy and outcomes. Learn more about automated CTV advertising here.
- Demand-side platforms (DSP) are automated ad buying platforms that allow advertisers to purchase and manage digital ads. Learn more about demand-side platforms.
- Digital video advertising is a broad term that describes advertisements that are displayed in video format. These can be placed within other videos (like in CTV or OTT advertising) or as standalone ads (such as banners or videos that play on web pages).
- In-stream video ads, as their name suggests, are those that are played during breaks in streaming video content.
- Open exchange CTV inventory is one way of accessing CTV inventory within a DSP. This inventory is available to any advertiser, features a significant selection of publishers and apps, and can be a cost-efficient way of including CTV ads in digital campaigns.
- Over-the-top (OTT) advertising is when advertisers place ads alongside over-the-top content (remember, that’s video content delivered through the internet directly to consumers). OTT ads can be delivered to many different devices: mobile phones, desktops, tablets, laptops, and—you guessed it!—CTVs.
- Private marketplace (PMP) CTV inventory is select inventory that’s made available to buyers via customized, invitation-only ad environments. Publishers can choose which advertisers have access to this inventory, which tends to be more exclusive and premium than what is made available on the open inventory exchanges. Learn more about advertising with private marketplaces.
- Programmatic TV advertising is a method of purchasing and placing TV ads using automation and data-driven best practices. It’s also highly effective and has great reach: In 2022, 92% of US households were addressable through CTV programmatic advertising. Learn more about the benefits of programmatic here.
- Video advertising, put simply, is when advertisements are placed within video content. This includes within YouTube videos, Instagram reels, linear/traditional TV, CTV, OTT, and more! Learn more about digital video advertising.
Connected TV KPIs
- Cost per completed view (CPCV) is the total advertising cost divided by the number of completed video views.
- Cost per view (CPV) is the amount an advertiser pays each time their video ad is played.
- Frequency describes the number of times people are exposed to an ad.
- Impressions delivered is a KPI within CTV that tells the number of times an ad was placed in front of the reached population within a specified period.
- Reach is a KPI that tells the number of people exposed to an ad at least once during a specified period.
- Top-performing tactic identifies which apps, devices, or domains are most impactful with your audience.
- Video completion rate (VCR) is a key KPI in CTV that tells the number of times a video was viewed in its entirety; completion rate = (video completes/video starts) x 100. Not to be confused with how you (and/or your parents) watched Blockbuster video tapes back in the 90s.
- Viewability rate originated as a measurement for video ads on desktops and has since expanded to mobile, CTV, and OTT video advertising. A video ad is considered viewable when at least 50% of it is visible on the screen for at least two seconds.
- Viewable cost per mille (VCPM) describes the cost for one thousand viewable impressions.
Pssst: we’ve got a whole piece on connected TV advertising planning, targeting, and measuring! You can check it out here.
Connected TV Advertising Strategies
- Addressability enables advertisers to create personalized ad experiences for specific groups of consumers and to track and measure the results of those ads. Learn more about creating personalized customer experiences.
- Allowlists allow advertisers to decide exactly which sites they want their ads to run on, and can help ensure brand safety. Learn more about the importance of brand safety here.
- Blocklists are precisely the opposite of allowlists—in other words, they’re any list of sites where you will not allow your ads to be displayed.
- Automatic content recognition (ACR) is a type of technology built into certain smart TVs that identifies the content being watched, allowing for more precise metrics on CTV ad performance.
- Contextual targeting is when advertisers strategically place ads based on content type (TV channel, movies, etc.), content category (news, sports, entertainment, etc.), app store (Apple, Google Play, etc.), and broadcast type (VOD, linear/live TV). For advertisers exploring privacy-friendly options (despite Google’s procrastination), it’s a great cookieless solution to consider! Learn more about contextual targeting here.
- Cross-device targeting allows advertisers to reach consumers across multiple devices. For example, when you see an ad for car insurance while watching Hulu and then get an Instagram ad for the same company the next day, you’re witnessing cross-device targeting in action! Learn more about the art and science of cross-device targeting here.
- Dayparting is a strategy in which advertisers schedule their ads to run only during specific days and/or times.
- Designated market areas (DMAs) are a component of geotargeting, allowing marketers to reach consumers in specific geographic locations. Learn more about all things geotargeting here.
- Dynamic ad insertion (DAI) is a server-side technology that enables advertisers to insert different (think: personalized!) ad variations in digital video content.
- Frequency capping allows advertisers to control the frequency with which ads are displayed. Because no matter how great your creative is, no one wants to see your ad back-to-back-to-back!
- Retargeting is, in many ways, the advertising equivalent of a “just wanted to follow up” email: it allows advertisers to show their ad(s) to the same consumer on a different device, or on the same device at a later time. Learn more about retargeting.
Want More CTV Insights?
Knowing the lingo to talk about all things CTV is great. But you know what’s better? Really understanding the complexities of the channel and seeing how to make the most of it within your campaigns.
Enter: Basis Technologies’ Connected TV Advertising Guide.
If you’re looking for a deeper dive on all things CTV advertising, we’ve got you covered. In it, we explore today’s connected TV advertising opportunity, lay out best practices and strategies, and show you how Basis can help. Interested? Check it out here.