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Understanding Connected TV and the Benefits of CTV Advertising for Small Business

Person holding a TV remote control while seeing different connected TV ads.

Connected TV is at the very heart of what defines TV in many American homes. It brings to life predictions that ‘cord-cutting’ would increase by nearly 30% in 2021.

The viewing platform was popular before the pandemic hit. The lockdowns only fueled its popularity as more people sought cheaper streaming services to keep them entertained. 68% of American homes are already consuming streaming services according to Forbes.

This popularity has in turn attracted many brands to advertise on connected TV. Especially small businesses that couldn’t match up to the financial demands of advertising on traditional TV.

However, not many people understand what connected TV is and the term often gets jumbled up with OTT. Find out what connected TV is all about and the advertising opportunities it presents for your small business.

Defining Connected TV

OTT and connected TV (CTV) often get confused and interchanged. For the sake of clarity, OTT (Over-The-Top) is media content that is streamed over the internet. It bypasses the regular platforms such as cable, broadcast, and satellite television — essentially “running over the top” of those platforms using the internet. CTV on the other hand, are internet-enabled devices you can plug into a TV to stream services like Roku, Sling Tv, Blu-ray Disk Player, Amazon Fire, Roku, etc.

With the increase of CTV apps -Netflix, HBO, Hulu, etc. – you don’t need a TV to watch TV. You can stream content from a tablet, phone, or desktop.

CTV devices – Roku, Smart TV, Chromecast, Amazon Fire Stick, Apple TV, etc. -connect your TV to a constant stream of content as long as you have a stable internet connection.

CTV Content Types

There are different types of content you can watch on CTV including:

1. Full-Episode Player

It’s also called FEP and refers to television-length professionally produced TV-like content – news, comedy, food shows – that can be viewed on any device on both apps and browsers. FEP has commercials too and the episodes run for about thirty minutes to an hour.

2. Live Streaming

Live streaming is exactly what it sounds like. You receive content live over the internet through a paid service or from a network that streams live shows.

3. Video On Demand

Video on Demand or VOD lets viewers choose what to watch whenever they want to watch it. VOD content is also available for download or streaming long after the live stream.

4. Living Room Quality Connected TV

This is commercial-supported content that can be accessed live or on-demand through an internet connection and not cable or satellite made possible by blue-chip broadcast and content companies. It is served through an IP address and is built to allow more personalized ad experiences through running highly targeted TV ads.

5. Direct to Consumer

Direct to Consumer or DTC content does not require a middleman network for transmission. Netflix is a great example of a platform that offers DTC content.

Business owners shooting a video for their company's connected TV advertisements.

6. FASTS

Stands for Free Ad-Supported Streaming Services (FASTS). Users watch ads rather than pay a subscription for the content. Good examples of popular FASTs are Xumo, Tubi, as well as Pluto TV.

7. Hybrids

Hybrids allow users to subscribe for a bouquet of their services with minimal advertisements.

CTV Advertising

Connected TV advertising enables businesses to access CTV audiences. Over 164 million users in the US alone are accessing video content on CTV devices. This is projected to leap to over 204 million viewers in 2022 – it goes without saying why 89% of marketers are more than satisfied with CTV advertising.

With linear TV advertising, advertisers buy ad spots at selected times on selected channels during certain programming. They also decide ad buys depending on the size and demographics of each program’s audience. Media sellers use Gross Rating Point (GRP) to determine how many people from the desired audience have possibly viewed a program.

GRP is a standard of measuring advertising impact calculated as a fraction –expressed in percentage – of the market reached.

For example, if you targeted men between the ages of 20 and 50 and 50% of this age group watches primetime on NBC every Tuesday night, if you run 3 ads on a Tuesday night at prime time, your GRP is the percentage of the target audience reached multiplied by the number of ads and multiplied by 100 as a round number. This means your GRP would be 150.

Connected TV advertising requires a different calculus. With connected TV advertising, ad buys are not contingent upon airtimes or channels. Instead, CTV ads are aired one by one. This depends on a particular program viewer and program.

There’s an advantage to it. You don’t have to figure out which shows your target audiences love to watch. Instead, you can develop a target audience depending on demographical data and behavioral signals, then run ads suited to particular viewers. This allows you to create highly targeted TV ads before the ad runs.

Benefits of CTV Advertising

Since CTV is not going anywhere and will only get bigger, small and big businesses alike are cashing in on the platform to gain the following benefits.

  • Reaching the ever-growing cord-cutting audiences and those who moved to connected TV long ago.
  • CTV advertising is way cheaper than traditional advertising and you can choose a pricing structure. That is, cost per metric (equivalent to 1000 views) or cost per completed view also called CPCV.
  • Connected TV advertising is fraud-free advertising. With ad fraud cited as one of the biggest challenges in digital advertising in 2021, CTV advertising offers relief because you’re using a Private-Marketplace (PMP) or an Open Auction.
  • 100% viewability is a major benefit of CTV advertising. Viewers cannot skip an ad on connected TV.
  • When advertising on traditional TV, you’re casting a wide net. Some audiences may be interested or be part of the audience you want and some may not fall under any of these categories. CTV allows finer targeting thereby increasing the impact.

One More Thing

The secret to staying relevant is moving wherever technology directs. The perks of connected TV are undeniable and as a small business owner, it’s time to target exactly who you want with your campaigns without paying an arm and a leg for it.

Ad Critter is the only small business platform that offers you free TV ad creation. We have 24,000 TV ads covering 1,000+ business types to choose from and you can always request a custom-made ad if none of them fit what you want. We’d love to see you grow so sign up and view our targeted TV ads for the ad chance that’ll sell your business to the world.

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