The 6 misconceptions of CTV advertising

Connected TV (CTV) gained popularity in the mid-2010s as internet-enabled smart TVs and streaming devices became commonplace. With the growth of platforms like Hulu, Roku, Disney and more, the spending on ads for CTV has also been rising quite steadily. According to e-marketer, CTV is one of the fastest-growing channels in digital advertising and is projected to reach $29.5 billion in 2024. Companies are seeing significant benefits from this channel, with Hulu making over $3 billion and YouTube making over $2.5 billion in ad revenues from CTV.

CTV has become an increasingly important part of the TV landscape, as viewers have increasingly turned to internet-connected devices to consume content. Like all things relatively new, this growth in the popularity of CTV as a medium for advertising has come with its own share of misconceptions and assumptions. Even the term CTV is ambiguous to many given the number of devices one can stream content on these days. Some of the common misconceptions about CTV advertising are as follows –

1. CTV is only for younger audiences

While CTV has traditionally been associated with younger audiences, we saw a change in the demographics over the last couple of years. During the pandemic, there was a notable increase in not just the viewership of Gen-Z and millennial audiences, but also an increase in the number of baby boomers. CTV viewership is becoming increasingly mainstream, with a growing number of households disconnecting traditional cable TV in favor of streaming services. As a result, CTV offers a valuable opportunity for advertisers to reach a wide range of demographics, from youngsters to families to seniors, who are using CTV devices to consume content.  Advertisers find the extensive demographic coverage of CTV valuable because CTV viewers are deeply invested in the content they choose to watch and are less likely to skip ads. 

2. There’s no difference between CTV advertising and Linear TV advertising

Numerous traditional businesses still feel that there’s a large overlap between CTV and Linear TV advertising.  The reality is that the biggest difference between advertising on CTV and linear TV is the audience. Linear TV advertising tends to have a broad reach while CTV advertising can be more targeted, allowing advertisers to reach specific audiences based on demographics, interests, and behavior. Advertising on CTV allows better personalization and ensures TV viewers are more engaged and receptive to ads that are relevant to their interests. Today’s CTV advertising even allows audiences to interact with the ad, changing the very nature of advertising. Brands like Chevrolet, Pepsi, IKEA are already rolling out interactive ads.

3. CTV and OTT are not the same, though they are related

Marketers continue to use the terms CTV and OTT (Over-The-Top) interchangeably.  While the two are related, they are not the same. OTT is a category that includes apps and services for streaming video content, independent of traditional cable or pay-TV subscriptions. Connected TV (CTV), on the other hand, refers to the device used by the viewer to access OTT content. In other words, CTV is a subset of OTT and is the platform on which viewers watch streaming video content without requiring traditional subscriptions.

4. CTV ads cannot be skipped

If we look at a platform like YouTube, for those of us not looking to pay for ad-free subscription, YouTube offers a variety of options to skip or not skip ads. Some ads can be skipped after a certain amount of time has passed, while some ads need to be viewed entirely before you can access the content. Quite similarly, CTV ads can be skipped depending on the ad format and platform used. Some CTV platforms may offer non-skippable ads that require viewers to watch them in full before returning to their content. Meanwhile, other platforms may offer skippable ads that can be skipped after a set amount of time has passed. As discussed above, some CTV ad formats may also include interactive elements that allow viewers to engage with the ad and receive a more personalized experience. It is up to the advertiser to define how to engage with the consumer using the platform on CTV.

5. CTV provides only high-quality inventory

Various types of CTV inventory are available, ranging from remnants to high-quality opportunities.Advertisers can access premium inventory opportunities to showcase their ads during popular TV shows and movies, and reach engaged audiences during prime hours. The quality of CTV inventory can vary significantly depending on multiple factors such as content providers, geographic locations, ad placements, and type of content.

6. Measuring ROI from CTV advertising is difficult, hence not worth it

While it is true that measuring the effectiveness of CTV advertising can be more complex than traditional linear TV, advertising on CTV is measured with very similar digital advertising metrics like impressions delivered, click-through rate, cost per acquisition, performance by creative, geo and much more.  CTV advertising also covers all the relevant metrics around brand safety to ensure audiences stay engaged. Using AI technology in programmatic CTV ad campaigns is expected to enhance their efficiency and effectiveness. Marketing firms will be able to offer clients performance-based pricing models using AI, thereby increasing the attractiveness of CTV advertising.

CTV presents brands with a tremendous opportunity to address the growing number of users switching from traditional cable TV or liner TV to a more digital-friendly option. CTV advertising is quickly emerging as another powerful channel to successfully target and meaningfully engage with audiences. The ability to provide higher ROI, experiences to consumers and enhanced targeting makes CTV advertising a compelling investment for those seeking to diversify their advertising strategies and stay competitive in the dynamic advertising landscape. Write to us at Seedtag to understand how we’re helping leading brands across the globe foray into advertising on CTV and explore how we can help your business make the jump.