In an era where traditional TV viewership continues its steady decline, Connected TV (CTV) has emerged as a powerhouse in the advertising landscape. With over 82% of U.S. households now having at least one CTV device, the shift in viewing habits has created unprecedented opportunities for advertisers. This transformation isn’t just about changing screens – it’s about revolutionizing how brands connect with their audiences.
The New Connected TV Experience
The traditional image of families gathering around the TV at 8 PM for their favorite show has evolved dramatically. Today’s viewing experience is deeply personalized, with households averaging 4.7 streaming service subscriptions. The modern family might be streaming different content simultaneously on various devices, or binge-watching entire seasons over a weekend.
This shift from appointment viewing to on-demand entertainment has fundamentally changed how consumers interact with content and, consequently, how advertisers must approach their strategies. The living room has become less about scheduled programming and more about curated content experiences that fit individual lifestyles.
Understanding Connected TV (CTV)
Connected TV encompasses any television set capable of streaming video content over the internet. This includes:
- Smart TVs with built-in streaming capabilities
- Gaming consoles like PlayStation and Xbox
- Streaming devices such as Roku, Amazon Fire TV, and Apple TV
- Other internet-connected devices that transform traditional TVs into smart streaming platforms
Unlike traditional linear TV, CTV offers unprecedented control over ad delivery, targeting, and measurement. Major players like Roku, Amazon Fire TV, and Samsung TV Plus have created robust advertising ecosystems that combine the impact of television with the precision of digital marketing.
The Fundamental Difference: Program Buying vs. Audience Buying
One of the most critical distinctions between traditional broadcast/cable television and Connected TV lies in the fundamental approach to reaching viewers. This difference often creates confusion among business owners transitioning to CTV advertising.
Traditional broadcast and cable television advertising operates on a program-buying model. Advertisers purchase spots within specific shows – whether it’s a football game, popular talk show, or primetime drama – hoping that a significant portion of that program’s audience aligns with their target demographic. It’s essentially an educated guess based on general viewer demographics.
Connected TV, however, completely transforms this approach. With CTV, you’re not buying programs – you’re buying direct access to your target audience. The rich data available through CTV platforms means advertisers can reach their specific customer avatar regardless of what content they’re watching. This is a revolutionary shift in television advertising.
This distinction is crucial to grasp: the programming becomes secondary to the viewer data. While traditional TV asks “What shows does our target audience probably watch?”, CTV definitively answers “Who is watching right now?” This precision targeting capability ensures your message reaches the right viewers, regardless of their content preferences.
Understanding CPM Costs: Precision vs. Price
When considering Connected TV advertising, it’s important to understand that CPM (Cost Per Thousand Impressions) rates are typically higher than traditional television advertising. This price difference isn’t a drawback – it’s actually a reflection of the precision targeting capabilities that make CTV so effective.
Think of it like this: Traditional TV advertising is like using a shotgun approach, while CTV is like using a precision rifle. You’re paying more per impression because each impression is significantly more likely to reach your ideal customer.
The Targeting Premium
As you refine your audience targeting, CPM costs generally increase. For example:
- A broad audience of Adults 25-54 will have a lower CPM
- That same audience refined to Males 25-54 who own full-sized trucks will have a higher CPM
- Adding additional parameters like income level, home ownership, or specific purchasing behaviors will increase the CPM further
The ROI Justification
While higher CPMs might initially seem costly, consider this scenario:
- If you sell truck accessories, would you rather reach:
- 10,000 general viewers at a lower CPM, where maybe 5% own trucks
- Or 2,000 verified truck owners at a higher CPM, where 100% are potential customers?
The higher CPM becomes easily justifiable when you consider that every impression is reaching a qualified potential customer. You’re not paying for wasted impressions on viewers who have zero probability of converting.
Why CTV Advertising Can Be A Game-Changer For You
The advantages of CTV advertising extend far beyond basic targeting capabilities. Today’s CTV platforms offer:
- Granular audience targeting that combines the emotional impact of TV with digital precision
- Real-time performance metrics that allow for rapid campaign optimization
- More accessible entry points for businesses of all sizes
- The ability to reach younger audiences who have never subscribed to traditional cable
Perhaps most importantly, CTV advertising provides access to the growing segment of cord-cutters and cord-nevers who are otherwise unreachable through traditional TV advertising.
Beyond the TV Screen: Cross-Device Capabilities
While the term “Connected TV” might suggest limitation to television screens, the reality offers much more flexibility for advertisers. These campaigns can extend across multiple devices, including:
- Tablets
- Mobile phones
- Desktop computers
- Laptops
This cross-device capability comes with an important cost consideration:
CPMs (Cost Per Thousand Impressions) typically run lower on mobile devices and tablets compared to connected TV screens. This price difference creates opportunities for advertisers to optimize campaign budgets across different devices, reach viewers where they’re most active, create device-specific strategies based on user behavior, test different creative formats across platforms, and scale campaigns more efficiently by leveraging lower-cost inventory.
Think of it as an ecosystem rather than a single channel – your ads can follow your target audience across all their streaming devices, maintaining consistent messaging while taking advantage of device-specific pricing and engagement patterns.
Maximizing Impact Through Addressable Targeting
At the heart of CTV’s effectiveness lies its sophisticated addressable targeting capabilities, powered by first-party data integration. One of the most powerful aspects of CTV advertising is the ability to directly reach your existing customers through your first-party data. The valuable information you’ve already collected through normal business operations – from customer transactions to marketing interactions – can be seamlessly integrated into your CTV strategy.
This includes everything from customer email addresses and physical locations to website visitor data and purchase or lead submission history. By feeding this data into the CTV ecosystem, you’re not just finding similar audiences – you’re actually reaching your known customers and those who have shown interest in your brand on their streaming devices.
This direct connection to your customer base and those interested ensures your advertising dollars are spent reaching people who have already engaged with your business, while also allowing you to expand to their households for broader reach when desired.
Advanced Targeting Capabilities
CTV advertising allows you to create precisely defined audience segments that align perfectly with your ideal customer profile. The targeting capabilities are comprehensive and can be layered to create highly specific audience groups.
At the household level, you can target based on:
- Demographics and family composition
- Income levels and net worth
- Home ownership status and property values
- Purchase behaviors and brand preferences
- Life events and major purchases
- Specific interests and lifestyle choices
- and so much more
Location targeting adds another powerful dimension:
- Specific neighborhoods or zip codes
- Custom radius around your business
- Competitor locations for conquest campaigns
- Event venues and temporary locations
- Multiple business locations or service areas
Behavioral targeting allows you to reach people based on their actual activities:
- Recent purchase patterns
- Shopping habits and preferences
- Travel behavior
- Entertainment choices
- Technology usage
- Seasonal activities
These targeting options can be combined and refined to create exactly the audience you want to reach, ensuring your advertising budget is spent effectively reaching the right potential customers.
Location-Based Enhancement
Geofencing adds another dimension to CTV campaigns by enabling.
- Targeted messaging to specific neighborhoods or business districts
- Competitor location targeting for conquest campaigns
- Event-based targeting for temporary locations
- Retail location targeting for drive-to-store initiatives
Geofencing, as we use the term, refers to the precise ability to target a specific location, such as a business’s parking lot or building, with accuracy.
It’s a common misconception that Google Ads can perform geofencing. In reality, Google Ads typically offers a minimum targeting radius of about 1 km, which falls short of true geofencing capabilities.
If someone tells you they can “geofence” in Google Ads, they’re not really telling you the whole story or they simply don’t understand the power of actual geofencing performed correctly.
Measurement and Attribution
Understanding the impact of your CTV advertising is crucial, and this is where conversion tracking comes into play. By setting up proper conversion tracking, you can monitor specific actions your audience takes after viewing your ads. These actions might include visiting your website, filling out a contact form, making a purchase, or calling your business. This direct response tracking provides clear evidence that your CTV campaign is driving real business results.
For businesses focused on direct response, where the goal is to drive immediate action like website visits, purchases or lead form fills, the attribution is relatively straightforward. You can track when someone who saw your CTV ad later visits your website or makes a purchase, or fills out a lead form giving you a clear picture of your campaign’s effectiveness.
Creative Best Practices for CTV
- 30-second spots remain standard
- High-quality production values remain essential
- Clear calls-to-action optimize response rates
The effectiveness of your creative depends on the audience you’re targeting. If you’re focusing on a specific niche, it’s wise to create ads that address their unique pain points, rather than relying on a general advertisement you’ve been running elsewhere.
For example, if you’re a car dealer looking to grow your fleet sales or “work truck” business, a general campaign featuring sports cars, minivans, electric vehicles, or sedans won’t cut it. Instead, you’ll need highly specific creative that speaks directly to your target audience, showing them that you understand their need for business fleet vehicles—and that you have exactly what they’re looking for.
Not sure if your current creative assets are suitable for a connected TV campaign? Reach out to us! We’ll review them and give you an honest assessment—whether they’re ready to go or if you’ll need new assets produced.
Real-World Applications
Let’s explore how precise CTV targeting can work in practice with some specific examples.
Consider a luxury general contractor in Denver, Colorado looking to promote high-end kitchen, bathroom, and whole-home renovations. Traditional TV advertising would waste significant budget reaching viewers who would never become customers – renters, new home owners, and those in homes below the luxury threshold.
CTV advertising allows this contractor to be incredibly precise with their targeting. They can specifically reach:
- Owner-occupied homes (eliminating rental properties)
- Homes built before a certain year (identifying properties prime for renovation)
- Properties above specific value thresholds
- Households meeting minimum income requirements
- All within a 20-30 mile radius of downtown Denver
This level of targeting ensures the contractor’s message reaches only those with both the means and likely need for luxury renovations. It eliminates wasted impressions on unqualified viewers and, most importantly, prevents their sales team from spending valuable time qualifying leads that don’t meet their luxury service requirements.
Another powerful example is an auto dealership specializing in high-end vehicle leasing. Rather than broadly advertising to everyone in their market, they can target households that:
- Have a history of leasing luxury vehicles
- Meet specific income thresholds
- Live in neighborhoods with high luxury vehicle ownership
- Are within their ideal service radius
- Have leases expiring within the next 6 months
This targeting ensures their advertising dollars are spent reaching qualified prospects who are actually in-market for their services, maximizing the efficiency of their advertising spend.
The targeting capabilities of CTV are so granular and diverse that we could provide examples all day long.
The possibilities are nearly endless, and the level of precision available is almost mind-boggling. In fact, the challenge isn’t finding ways to target your ideal customer – it’s choosing from the vast array of targeting options available to create the most effective combination for your specific business needs.
Getting Started with CTV Advertising
The dive into Connected TV advertising starts with understanding your business objectives and how they align with the capabilities of this powerful medium. Every successful CTV campaign (and advertising campaign for that matter) begins with clearly defined goals – whether that’s increasing brand awareness, driving website traffic, generating leads, or boosting in-store visits.
These objectives will guide every aspect of your campaign strategy.
Identifying your ideal audience comes next, and this is where CTV truly shines. Rather than making educated guesses about who might be watching certain programs, we can precisely define and reach your target market. This process involves analyzing your current customer base, understanding their characteristics, and leveraging that data to find similar audiences across the CTV landscape.
When it comes to budgeting for CTV advertising, we recommend a strategic approach that allows for proper testing and scaling. While many businesses might be familiar with traditional TV advertising budgets, CTV offers more flexibility and precision in how your advertising dollars are spent. We typically start with a focused test campaign that allows us to gather data, measure results, and optimize for performance before scaling up investment based on proven results.
Creating compelling video content is another crucial element of CTV success. Your creative assets need to capture attention and deliver your message effectively in a streaming environment. We can help guide you through the production process or adapt existing video assets to perform well in the CTV space, ensuring your message resonates with your target audience.
Conclusion
Connected TV represents the future of television advertising, combining the emotional impact of traditional TV with the precision of digital marketing. As viewing habits continue to evolve and technology advances, CTV will play an increasingly central role in effective advertising strategies.
For brands looking to stay ahead of the curve, now is the time to embrace CTV advertising and develop strategies that leverage its unique capabilities. The combination of precise targeting, measurable results, and engaging formats makes CTV an essential component of modern marketing campaigns.
Linear television, including broadcast and cable, is steadily declining year after year, while Connected Television is emerging as the future. For a comparison, think back to the early 2000s, when phone book ads were still widely used—until Google and other search engines revolutionized advertising and rendered them nearly obsolete.
We see a similar shift happening now: linear and broadcast TV are becoming outdated, much like phone books, while Connected Television is transforming the advertising landscape, just as Google once did.
This article provides a basic overview of connected television and its structure, but if you’re still unsure how it works or how it could apply to your specific situation, feel free to reach out.
As an agency, we’re genuinely excited about the future of connected TV and want everyone to understand its potential. We’d be happy to discuss your business and explore how connected television could help drive more revenue. The conversation is completely free and comes with no obligation.
Get Your Business On Connected TV With OEPMA
Ready to harness the power of precision-targeted CTV advertising for your business?
OEPMA can help you get your message in front of the exact audience you want to reach.
We specialize in taking your creative assets and positioning them strategically within the CTV ecosystem to get you more business.
Our process gets your campaign up and running quickly, ensuring your business takes full advantage of this powerful advertising medium.
Contact us today to learn more about how we can help you get started with CTV advertising and what materials we’ll need to launch your campaign.
