Connected TV: Fact and Fiction

In recent years, the definition of “watching TV” has evolved: Whereas linear TV (cable, broadcast, and satellite) used to dominate, over-the-top streaming and digital video content are taking over. One of the most popular ways to access this content is via connected TV (CTV), which brings digital video and streaming content to big(ger) screens.

With more and more people consuming content via CTV each year, it’s no surprise that ad spend has exploded in kind. As marketers strive to make the most of the connected TV advertising opportunity, it’s likely they’ll encounter an overwhelming amount of information and recommendations. And, as the ol’ adage goes, you can’t trust everything you read—especially on the internet.

For advertisers wanting to separate fact from fiction when it comes to connected TV, this post is for you! Below, we’ll address some of the biggest misconceptions about this channel to help marketers utilize it as effectively as possible.

Ready? Let’s dive in.

Time spent streaming CTV has surpassed linear TV

Connected TV’s reach is expanding each year. In 2019, 195.9 million people used a CTV at least once a month; as of 2022, that number had grown to 225.7 million. And, in July 2022, for the first time, US streaming surpassed cable TV viewing.

And as CTV viewership is increasing, so too is CTV ad spend. In 2017, US CTV ad spend was just $2.8 billion; five years later, it surpassed $21 billion. And it makes sense, right? Advertisers want to reach people when and where they’re viewing video, and CTV…well, let’s just say it’s the place to be.   

Over-the-top and connected TV are the same

As people consume more and more video, there has been an explosion of terms used to describe digital video viewing and advertising experiences. And to be honest? Many of the terms are so closely related that it seems like they could be used interchangeably. Side note: If you’re having a hard time keeping up with all the lingo, our CTV glossary is here to help!

Two of the most commonly confused terms? Over-the-top (OTT) and connected TV (CTV). Though often used synonymously, these two terms are distinct. Let’s break it down:

Over-the-top (OTT) is a method of delivering video content to users through the internet, rather than via cable, broadcast, or satellite. OTT content (and advertising) can occur on smart phones, tablets, desktops, and—you guessed it!—CTVs.

Connected TV (CTV) is the term used for any television that is connected to the internet, such as smart TVs or regular television sets used with OTT devices. For something to be considered “CTV” it must be a television device—not a smart phone, tablet, or desktop!

One way we like to remember it? All CTV content is OTT content, but not all OTT content is CTV content (sort of like how all squares are rectangles, but not all rectangles are squares).

CTV inventory is limited (especially when it comes to live sports)

Today, more than ever, the CTV inventory available to advertisers is vast. And with streaming behemoths Netflix and Disney+ introducing ad-supported tiers, it just got more expansive. Having access to all that inventory gives advertisers a real competitive edge—through BasisTV⁺, for example, advertisers can reach 93% of US smart TVs.

“And what about live sports?” you might ask. “Surely that must still be primarily linear inventory?”

Again: Nope!

The future of live sports is digital. ESPN, NBC Sports, the NFL Network, Sling, CBS Sports, and so many more offer advanced TV advertising opportunities. With 84 million sports viewers currently tuning in on digital devices and 79% of sports fans saying that, if possible, they would watch live events exclusively on streaming platforms, the opportunity to reach sports viewers via CTV is significant.

Connected TV advertising is addressable

When it comes to CTV advertising, there are a lot of benefits. One of the most notable? All—yes, all!—CTV advertising is addressable. Importantly, the same cannot be said of linear.

Why is addressability so significant? It enables advertisers to create personalized ad experiences, target them to specific groups of consumers, and measure the results of those ads. With 62% of consumers expecting ads that are customized to their distinct interests and needs, personalization in advertising is a big deal—and CTV is a great way to achieve it.

Only Gen Z uses CTVs

It’s true that Gen Z accounts for a good amount of CTV viewership. But are they the only ones tuning in?

“No!” shout the millennials watching The Great British Baking Show on Netflix as they tend to their (many) houseplants. 

Millennial trope jokes aside, CTV is a great way to reach a variety of viewers—across all generations—where they watch video. Case in point? The 2022 breakdown of US CTV users, by generation:

• Gen Z: 50.3 million
• Millennial: 61.1 million
• Gen X: 52.0 million
• Baby boomer: 35.6 million

Current technology allows for cross-device targeting with CTVs

What’s better than reaching people where they’re watching video? Doing it as part of a holistic, omnichannel campaign!

Current technology not only allows advertisers to target CTV ads based on thousands of parameters, but also to target them across devices. That means that a consumer could first see an ad for your product while they’re binge-watching Rick and Morty, and then be re-targeted for that product on the same or a different device later on. Nifty, eh?

Programmatic advertising and CTV don’t mix

There are so many ways we could rewrite this one as a truth: Programmatic advertising and CTV go together like…PB&J; like French fries and ketchup; hot cocoa and ice skating; peas and carrots; pumpkin and spice…You get the picture.

Still unconvinced? Even after the screaming marmot and our terrible similes?! Here are a few stats to know:

• In 2022, 92% of US households were reachable by CTV programmatic advertising.
• That same year, CTV programmatic video ad spend accounted for 66% of all CTV video ad spend in the US.
• By 2024, US CTV programmatic video ad spend is forecast to be $21.86 billion. That’s up from $5.47 billion just five years earlier.

—

Ready for more? Check out our guide.

Congratulations! You’re well on your way to becoming a CTV advertising expert.

That said, there is a lot more to know about this channel than we can cover in one post.

If you’re looking to level up your CTV knowledge, our connected TV advertising guide can help. We go all-in: from viewership and advertising trends, to best practices and strategies, to key KPIs and optimizations, and so much more.

Interested?