Traditional television aka Linear TV has reigned as one of the most popular and reliable choices for advertising to consumers. However, Connected TV is quickly eroding the market share of traditional TV as CTV continues to rise as the platform of choice among viewers as it offers greater flexibility and a vast content library. In the United States alone, eMarketer estimates that there will be 80 million cord-cutting households by 2026.
Linear or traditional TV refers to the traditional television broadcasting model where content is delivered via satellite or cable. Content is programmed and displayed on particular channels at a specific time and date.
Connected TV or non-linear TV refers to any television set with an internet connection, offering viewers the freedom to view content on-demand. Viewers can use their internet-enabled TVs to stream content from platforms like Netflix, Hulu, and Amazon Prime Video and choose from a wide range of content, live events, and viewing options.
On traditional cable, content is broadcast at specific times and dates, while connected TV allows viewers to watch content on their schedule.
Typically, viewers watch programs in real-time on cable, and the content is delivered through broadcast channels. Connected TVs require an internet connection and provide content through streaming services.
Viewers have limited control over what and when they watch it over cable. However, connected TV is significantly more flexible, extends a wider range of content, and even offers access to an app store to download apps.
Traditional television advertising involves placing commercials within programs by buying time slots or pods during specific commercial breaks to reach the target audience. The Designated Market Area (DMA) refers to a group of territories considered to be the primary television viewing area for a particular city or metropolitan area. The DMA defines the television markets, and everyone within a DMA viewing a specific channel where a brand purchases an ad space will see the same commercial.
On the other hand, CTV advertising is a form of digital advertising that involves placing ads on connected TVs like smart TVs and streaming devices. Advertisers buy ad inventory through ad exchanges or directly from CTV platforms and then place the ads within the content viewers watch on their connected TVs. Viewers see the ads as they browse, pause, and watch content on their connected TVs.
With the rising number of cord-cutters and increasing CTV viewership, advertisers are shifting their focus from traditional television advertising to connected TVs. Linear advertising can be limiting as advertisers rely on DMAs to target specific geographic regions, reach their desired audience, and allocate advertising budgets across different markets.
While linear advertising enables advertisers to reach a wider audience base, the targeting capabilities are more limited. Advertisers cannot target niche audience segments making it difficult to target specific demographics or interests precisely. Since targeting is primarily based on DMAs, advertisers have restricted capabilities and could target segments where many viewers fall outside the desired target group.
Bagging prime-time slots for ads on traditional TV is also expensive when compared to CTV ads, and measuring campaign effectiveness is also difficult on cable as there is no access to detailed data and analytics. Advertisers only rely on traditional measurement methods like Nielsen ratings that provide a general overview of viewership.
Unlike traditional television advertising that broadcasts all ads to a general audience, CTV advertising enables personalization and relevance by targeting based on audience interests and viewing habits. CTV targeting focuses on an interest-based approach to effectively capture audience attention and engage with them by showing viewers ads that are relevant to them.
Since the ads align with a viewer’s real-time interests and you can now engage with the ads, CTV ad placements tend to lead to higher engagement and conversion rates. The ability to track key metrics like impressions, viewability, engagement rates, and conversions, makes it easier to measure the effectiveness of campaigns, optimize ads, and measure ROI.
Linear TV viewing is often passive, the engagement rates are lower, and viewers are less likely to interact with ads or take immediate action. CTV ads offer interactive capabilities that allow viewers to take action with an ad to learn more about the product or service, leading to higher levels of engagement and brand recall. The ability to target specific audiences reduces ad budget wastage on viewers who are not relevant, thus making CTV more cost-effective than traditional advertising.
CTV advertising is emerging as a preferred choice among advertisers as it empowers them with a more targeted, measurable, and engaging way to reach audiences compared to traditional advertising. CTV advertising can help maximize the effectiveness of campaigns by aligning ads with the current genre or show being watched by viewers. The ads appeal to the audience as they find them more relevant and engaging.
Learn more about CTV advertising capabilities with Contextual TV by Seedtag.
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