The outbreak of the COVID pandemic made people around the world watch more TV, and triggered an exponential growth of streaming TV in the process. Naturally, advertisers then came in tow, eager to tap into these emerging opportunities. In this article, we’ll break down some of the most important aspects of connected TV advertising and show you why it’s high time to get up to speed and leverage this new way to advertise your business.

A changing tide

The shift from traditional to connected TV is not happening just in terms of hardware. Instead, there is a significant shift in consumer habits, and thus in advertising spending. Also, with a plethora of OTT services to choose from, viewers are not limited to using Netflix anymore. There are ample different possibilities to watch your favorite movies and shows. Examples include “free”, ad-supported services like Crackle, Kanopy, Peacock, Pluto TV, and the Roku Channel are the best options here.

leading streaming services

Today’s connected TVs are bigger, faster, and smarter – and so is advertising. As a result, CTV advertising has grown to become one of the fastest-growing digital channels. Last year, linear TV decreased in importance to advertisers as the cord-cutting trend accelerated and more programmatic CTV inventory became available than ever before.

Get your terminology right

Before we start, it would be good to understand the key terms, acronyms, and concepts commonly used throughout this article in reference to connected television and online advertising. First and foremost, you must grasp the difference between OTT and CTV (connected TV) from an advertiser’s perspective.

Over-the-top (OTT) – refers to any video content streamed using the internet and a device like a PC or mobile phone. Among many popular OTT services are TubiTV, Hulu, Prime Video, Sling TV, ATTNow, Philo, Peacock, and many more. 

Connected TV (CTV) – is a subset of OTT that refers only to TVs capable of playing streaming content. So, in simple terms, every CTV device is also an OTT device, but not every OTT device is a CTV device. 

Private Marketplace (PMP) – a programmatic media purchasing ecosystem that uses multiple levels of auctions, referred to as waterfall. The private marketplace inventory sale (i.e., invite-only) sits just one level above the open exchange. It accesses specific placements in an auction of fewer bidders, but the win rates are also higher. This auction often comes at a higher price and requires the auction participants to pay a certain price floor or high-priced minimum CPM.

Cost-per completed view (CPCV) – a number that expresses the total spend divided by the number of completed views.

Video Completion Rate (VCR) – represents the percentage of impressions in the campaign that completed the ad. Completion rates for connected TV are typically very high (in the range of 80% to 97%), as it’s usually not possible to skip the video, and there are no ad blockers either.

The inner workings of connected TV advertising

Connected TV ads bring the advantages of programmatic advertising to linear television. This allows advertisers and broadcasters to:

  • Increase ad revenue
  • Automate and streamline ad sales processes by implementing the more effective CPM (cost per click) pricing model
  • Reach different target groups simultaneously within one break (each viewer sees a slightly different ad)
  • Implement personalized commercial breaks (e.g. by displaying prices in ads using local currency)

With connected TV advertising, advertisers don’t think in terms of air time or channel, as connected TV ads are shown independently to each specific viewer. As a result, there is no guessing about which shows your target audiences are watching. Instead, advertisers can build a target audience based on so-called demographic and behavioral signals, then serve ads to specific viewers.

The private marketplace is invite-only and contains a collection of high-caliber publishers. It allows advertisers to buy ad space with specific site sections and creative formats. For example, such uploads might contain video and other creative formats but are exclusive due to their invited audience.

Connected TV ads offer a great variety of benefits over traditional TV advertising: they offer the ability to reach your desired audience with superior targeting options.

The different types of connected TV ads

There are different types of ads in CTV advertising that can roll in streaming content.

In-stream video ads are those 15- to 30-second long ads that play before or during the program and cannot be skipped. In this way, existing linear television ads can be re-used in connected TV channels, saving the advertiser precious ad dollars.

Interactive Pre-Roll ads also roll before the video, but the viewer can click the ad and be redirected to a dedicated landing page (e.g., sign up form for a car test drive).

Home Screen Placement ads are displayed on the home screen of the streaming platform app. These could be short videos or images with a fancy call to action button.


The targeting of CTV ads is far more advanced than traditional TV ads. Connected TV allows marketers to have both the impact of linear TV commercials and the precision of digital advertising. Today, many tactics known from internet ads like data, geolocation, etc., can be used.

In traditional TV advertising, advertisers typically purchase ad spots only in designated times and designated channels. Advertisers decide ad buys based on each program’s audience’s estimated size and makeup. This approach is an inaccurate spray-and-pray method that is hard to track and verify.

With CTV advertising, advertisers can identify consumers across various devices. Cross-device matching uses the so-called digital footprint that the users create on various devices like computers or smartphones. Generally speaking, there are two methods for identifying individual viewers: probabilistic and deterministic matching. 

Probabilistic matching is based on multiple connected devices (e.g., within the same WiFi or location) exhibiting similar behavior. Of course, this method is never 100% accurate but can be accurate enough to advertise certain products like dog food for the household.

Deterministic matching identifies viewers based on common logins across devices (Google, Facebook, etc.), which is 100% accurate.

Addressable targeting

This type of CTV ad targeting serves specific users based on different data. The process typically starts with an advertiser’s database of PII, which typically comes from a CRM. The data is then combined with additional demographic, behavioral, and transactional data available to advertisers. These rich audience segments allow marketers to create personalized messaging down to the consumer level.

Addressable targeting refers to advertising that connects brands with individual consumers across multiple online advertising platforms, social media, OTT (Over the Top) content providers, and smart TV platforms. 

Behavioral targeting

Behavioral targeting allows you to serve ads to viewers based on their behavior and intent – e.g., advertise the products they search for online. This method uses the data from web pages your target audience members visit.

Demographic targeting

Demographic targeting uses various data sources like household census, warranty registrations, questionnaires, credit bureau records, and purchase histories. You can then layer this on behavioral targeting to target very specific audiences.

Better bang for the buck

Connected TV advertising is very accurate compared to linear TV ads, and thus more cost-effective. You can, for example, target a very specific demographic instead of advertising during a sports game hoping that you’ll reach males who like football and beer. 

When a commercial rolls on a connected TV, it’s also very likely that more than one person will see it since a single TV is usually shared with many family members or friends. On the other hand, devices like laptops or mobile phones are typically only meant for one viewer at a time. So, in a way, it reduces the cost per impression for the advertiser and makes the analytics completely different from traditional internet display ads.

New creative formats

With CTV advertising, marketers can experiment with various novel ad formats. For example, advertisers can test how their audiences respond to various interactive videos, calls-to-action, etc.

Wrapping it all up

CTV advertising allows advertisers to focus more on the specific viewers seeing the ads. This question is still common among advertisers new to connected TV advertising. Here’s a look at which OTT services serve ads to give you an idea of the connected TV ad inventory available today.

Are you considering empowering your streaming platform with connected TV advertising? Reach out and learn how we can help you marry the power of traditional TV ads with the precision of digital advertising.