What is Connected TV? The Ultimate Guide to CTV Advertising

A Connected TV is a television device that has access to the internet, enabling users to stream both live and on-demand professional video content directly to their screens. The Connected TV has revolutionized the way we watch television, altering our content consumption habits (goodbye cliff-hangers) and allowing us to watch shows on-demand to suit our schedules (goodbye healthy sleep schedule).

Smart TVs vs. Connected TVs

Is a smart TV the same as a Connected TV device? Technically no, although it’s easy to get confused. Smart TVs have built-in internet connectivity within the physical hardware of the TV. A CTV device is an umbrella term encompassing any internet-connected device used to stream on TV, whether built-in or externally accessed via streaming gadgets. This could be a smart TV or a device with a third party streaming gadget attached, such as Amazon Fire Stick or Roku.

To get technical, it is correct to say, “all Smart TVs are Connected TVs,” but incorrect to say, “all Connected TVs are Smart TVs.”

Streaming vs. Connected TV

Is Connected TV considered streaming? These are very similar processes that involve delivering video content over the internet. The main difference between streaming and CTV is the way the content is delivered. CTV delivers video content to Connected TV devices exclusively, while streaming (via OTT) delivers video content to any internet connected device, such as tablets, mobile phones, and desktops. The process is basically the same, but the delivery device differs.

AVOD vs SVOD

With the foundations of CTV laid, we can dive into the specific types of CTV content, namely AVOD and SVOD, prevalent on streaming platforms.

• AVOD, an acronym for “Advertising-based Video On Demand,” signifies on demand television content interspersed with advertisements. This model allows viewers to access content for free in exchange for regular ad breaks.
• SVOD, short for “Subscription Video on Demand,” describes streaming apps that require payment to unlock exclusive content behind a paywall. In this scenario, viewers pay a subscription fee for an ad-free experience.
  • Recently, certain SVOD apps (like Netflix) have created hybrid ad-supported tiers that sprinkle ads throughout the content, reducing the price of the monthly subscription fee. They still pay, but it’s lower than the ad-free tiers, enduring 4-5 minutes of ads per hour of content.

With monthly subscription fees hiking this year, viewers are becoming more selective consumers. Many are now opting for AVOD platforms, choosing to tolerate ads in exchange for the privilege of accessing content without having to pay. Subscription platforms are taking notice, adding ad-supported tiers to their subscription packages to accommodate this money conscious mindset.

Connected TV advertising, or CTV advertising, is the process of delivering non-skippable video ads to viewers through Connected TV devices. CTV’s programmatic abilities offer a highly targeted and fully measurable approach to engage specific audiences, prompt action, and support downstream sales initiatives.

CTV Advertising vs. OTT Advertising

OTT (Over-the-Top) and CTV (Connected TV) are often used interchangeably, yet they describe distinct facets of video content delivery. OTT refers to the delivery of video content over the internet, which can be accessed on a variety of devices including mobile phones, tablets, and computers. In contrast, CTV specifically pertains to video content delivered directly to Connected TV devices.

CTV advertising injects advertisements within streaming content exclusively on CTV devices, while OTT advertising injects advertisements within video content on phones, tablets, and computers. For a more in-depth differentiation of OTT vs. CTV, read here.

CTV Advertising vs. Linear TV Advertising

Linear TV advertising is the traditional method of broadcasting television content on scheduled channels at specific times. It represents the classic, time-honored form of TV advertising that has been in homes for generations. CTV advertising, contrarily, is embedded in the modern streaming TV ecosystem. With unprecedented digital technology, it provides significantly improved targeting and measurement capabilities compared to cable TV advertising’s endemic “spray and pray” campaign strategies.

Today, more consumers choose Connected TVs over Linear TVs for their television content. Despite this shift in viewing preferences, two-thirds of TV advertising expenditure remains dedicated to linear TV.

• 115+ million streaming households (HH)
• 90% of HH stream ad-supported content
• 2.5 million HH in-market for a vehicle
• 4.7 streaming services per HH
• 56% of HH have cut the cord
• 3.1 hours streamed by the average person daily

Connected TV (CTV) ads are showcased within ad pods on a diverse range of streaming platforms and networks, encompassing both subscription-based and free, ad-supported services. These advertisements connect with audiences through highly popular and widely recognized networks and applications such as ESPN, MTV, CBS, Hulu, Pluto TV, and Disney+. They are delivered on devices that are staples in U.S. households, including Apple TV, Roku, and Amazon Fire Stick.

Today, nearly all major streaming services — including Netflix, Amazon Prime, Hulu, HBO Max, and Paramount+ — offer ad-supported subscription options. Along that trend, 90% of CTV households now stream content with ads. This surge in ad-supported viewing options stems from a clear market demand: budget-conscious consumers, particularly those who have abandoned costly cable subscriptions, are actively seeking more economical streaming alternatives. Consequently, ad-supported CTV plans, which are priced lower than their ad-free counterparts, have gained substantial traction among viewers seeking affordability without sacrificing quality and variety of content.

Connected TV advertising is moving the needle in the world of digital advertising, and marketers are increasingly capitalizing on this channel to maximize their performance outcomes. CTV advertising combines the influence of traditional TV advertising, widely regarded as one of the most powerful mediums globally, with the precision and measurement capabilities akin to digital channels like Google or Facebook. This duality gives advertisers the upper hand when it comes to audience quality and engagement bundled with revolutionary attribution capabilities.

Here are the top five advantages of CTV advertising:

1. Audience-First Targeting Strategy:

CTV advertising enables marketers to target their exact, highly predictive buyers. In our case, these are individuals who are extremely likely to be pre or in-market car shoppers who are steadily approaching their vehicle purchase date. Unlike traditional TV advertising, which focuses on hitting broad demographics with channel stereotyping, CTV advertising allows marketers to use first, second, and third-party data to target audience segments based on parameters that are highly predictive of, for example, a vehicle purchase. This level of targeting precision reduces ad wastage, boosts engagement, and enhances the overall effectiveness of CTV ads in generating meaningful conversions.

2. Household-Level Targeting:

CTV advertising leverages household-level targeting to deliver personalized and relevant ads to specific in-market households based on the Connected TV device’s location. The Household Graph technology can tap into all the devices that live in that household. This granular targeting benefits local businesses and campaigns (like dealerships) with regional focuses, allowing them to reach their target audience more accurately, increasing relevancy and driving higher engagement rates and minimizing ad spend wastage.

3. High Engagement Rates:

CTV advertising achieves high engagement and video completion rates (VCR) due to the viewer behavior associated with this medium. Viewers are more engaged and less likely to ignore or disregard ads when watching TV content on CTV platforms, compared to other digital mediums. This high engagement quality is largely for two reasons. Firstly, because CTV ads are non-skippable, automatically enforcing ad completion. Second, because of the “living room experience” CTV viewing promotes, which creates a leaned-back, immersive setting that supports long-form content where viewers will be the most attentive, and therefore the most influenceable to the advertisements. This boosts brand engagement and downstream actions, providing a significant advantage over phone and tablet mediums where ads may easily be minimized or ignored.

4. Accurate, Real-Time Measurement and Attribution:

CTV advertising allows marketers to track various metrics, including return on ad spend, revenue, website visits, and even foot traffic attribution. These metrics are available in near real-time, providing up-to-date insights into campaign performance. EMG’s dealership attribution solutions, enable marketers to tie physical in-store conversions and web metrics to their Connected TV ad with identity graphing.

5. Campaign Optimization:

Optimization stands at the forefront of any advertising medium, arguably serving as its most critical component. Successful optimization requires the measurement and use of deterministic attribution data. By auditing and refining campaigns based on your campaign’s tracked outcomes, advertisers understand exactly what is working and what isn’t.

At EMG, we specialize in performance-driven optimization through our one-to-one attribution model. Our approach ensures that EMG’s audience models and inventory library are consistently fine-tuned based on the campaign’s attributed outcomes. We deliver CTV ads across premium inventory built for human attention, targeting the most engaged and high-performing audience segments. Our meticulous auditing process leverages individual dealership data in conjunction with over six years of robust historical media insights, allowing us to continuously refine our strategies and phase out less effective tactics.

This quality of optimization significantly enhances the efficacy of CTV advertising by identifying and eliminating underperforming models in real time, a feature that linear TV is incapable of performing.

EMG Audiences directly identify and target pre and in-market automotive buyers with CTV advertising using 1st, 2nd, and 3rd party data that mirrors the automotive consumer journey.

With tens of thousands of automotive audience segments commercially available right now, it’s easy to get lost in the heaps of attractive looking segments. EMG helps our customers cut the line by curating and leveraging highly predictive auto-intending audience segments from trusted automotive data providers, called EMG Audiences. These audiences have repeatedly proven to drive the highest media efficiency rates, verified by dealership walk-ins.

Selecting audiences on the marketer’s end is easy with EMG. Marketers can target every type of buyer with EMG Audiences, down to the dealership’s class, segment, fuel type, and new or used status. Any segmentation that EMG has deemed impact to performance is included. From there, EMG uses 1st, 2nd, 3rd party, and recency data to precisely predict when a consumer is in the awareness (pre-market), consideration (in-market and conquest), or purchase phase.

Pre-market consumers are at the top of the sales funnel, in the awareness stage of their journey to vehicle purchase. They are roughly 90-31 days away from purchasing a vehicle. Here, EMG looks for life events that would trigger a new car purchase — new job, new baby, moving — and looks at automotive data — age of current vehicle, lease expiration — that trigger a new car purchase.

In-market and conquest consumers are in the consideration stage of their car purchase journey, moving steadily down the sales funnel. These consumers are 30-0 days away from buying a car, actively looking at specific vehicles and live offers. Here, EMG uses automotive data (from Cars.com, Autotrader, Edmunds, etc.), the dealership’s 1st party website data, and location data (dealership visitors) to find users approaching their purchase date. Once their purchase date arrives, they have completed the sales funnel and have exited the market, they are removed from EMG audience segments.

Because Connected TV (CTV) functions as a digital advertising channel, it relies on traditional digital marketing metrics and key performance indicators (KPIs) to gauge its effectiveness. Here are some key metrics to understand, especially important for those planning to utilize CTV ads in their performance marketing campaigns.

Impressions
Impressions signify the number of ads served to viewers, providing insight into the campaign’s reach across TV screens. Note: just because a campaign generated 100,000 impressions, does not mean 100,000 people saw the ad. Impressions take frequency into account, meaning a campaign with a frequency of 2 that reaches 50,000 people will have 100,000 total impressions (50,000 x 2).

Return on Ad Spend (ROAS)
ROAS measures the revenue generated by the campaign in relation to the total ad spend. A higher ROAS signifies that the CTV campaign is generating significantly more revenue than the cost invested.

Cost per Completed View
This metric reflects the cost incurred by an advertiser for each completed view of a video ad. This is calculated by dividing the total cost of running the campaign by the number of completed views. A completed view generally means the ad was watched from start to finish without skipping or prematurely stopping it (100%), although definitions may vary slightly across different CTV ad platforms.

Cost per Acquisition (CPA)
CPA calculates the campaign cost for each acquisition, whether it’s a sale or another specified action. A lower CPA signifies a more efficient campaign in acquiring desired outcomes.

Aside from digital metrics, several linear TV metrics have found their way into CTV measurement:
Reach
Reach is the total number of unique individuals or households exposed to a particular advertising campaign or message within a specified time frame. It highlights the portion of the targeted population that has viewed at least one of the campaign’s CTV advertisements.

Frequency
Frequency is the number of times a specific advertisement is displayed to an individual viewer within a given time period, preventing repetitive exposure to the same individual. This can be controlled by the advertisers to prevent ad fatigue.

GRP (Gross Rating Point)
GRP measures the percentage of the target audience reached by an ad. It accounts for the number of viewers who saw the ad combined with the amount of times they saw the ad, compared to their dealership’s entire target audience of the whole campaign.

CPP (Cost Per Point)
CPP measures the campaign’s cost-effectiveness in reaching their intended audience, calculated by dividing the total media cost by the GRP. It signifies the cost per Gross Rating Point achieved.

Cross-Screen Measurement
This term refers to tracking and measuring video metrics across diverse devices, including mobile, television, out-of-home (OOH), Connected TV, and desktop platforms.

Target Rating Point
Target Rating Point is a metric indicating the percentage of the advertiser’s target audience that viewed its ads. These audiences are pivotal for successful campaigns, representing the groups most likely to engage with the company’s products or services.

At EMG, attribution is our main priority. We offer both online and offline metrics to measure the campaign’s lift. Our reporting suite gives automotive marketers true insight into how their campaigns are performing. Here are our EMG specific metrics:

Offline Leads:
Total Dealership Walk-Ins
This includes all the tracked and attributed dealership walk-ins a given campaign generates, whether to that dealership, or to other rival dealerships.

Individual Dealership Walk-Ins
Individual dealership walk-ins are the number of attributed walk-ins exclusively to the campaign’s individual dealership.

Market Share
EMG reports market share using our GMS iQ rating (geographic market share) that measures the portion of its geographic market controlled by that dealership, based on dealership foot traffic arrivals.

Online Leads:
Website Visits
Website visits quantify how many individuals visited the dealership’s website that saw the CTV ad.

VDP Views
Vehicle Description Page views, like the name hints, quantifies how many times the VDP was viewed by individuals who saw the dealership’s CTV ad.

Website Leads
Website leads are the number of online leads attributed to the CTV campaign.

Connected TV marketing offers a distinctive fusion of digital precision and measurement capabilities, coupled with the captivating influence of television. With its rapidly expanding user base, understanding and applying best practices are essential to harness the full potential of CTV.

Understand Your Audience: Similar to any marketing approach, knowing who your buyer is is fundamental in creating impactful CTV ads and crafting optimal audience group configuration. For automotive marketers, EMG has these audience models already built and curated.

Utilize High-Quality, Compelling Creatives: Given the high-resolution, expansive screen experience of CTV, ensure your ad visuals are top-notch and engaging to demand viewer attention. As a bonus, upload multiple creatives (OEM, dealer-specific, or offers) so EMG can funnel different creatives to deliver to certain audience groups based on their point in the consumer journey. For more information on creative best practices and requirements, read here.

Harness Advanced Targeting: CTV provides advanced targeting options that parallels other digital marketing mediums. Utilize these tools through EMG to strategically connect with the right audience.

Create Interactivity: On CTV creative, designers can create interactive ads through dynamic injections via VAST tags, allowing viewers to see the live vehicle deals currently offered at that dealership, elevating response and engagement levels significantly.

Implement Frequency Capping: To prevent viewer ad fatigue, introduce frequency capping (that EMG implements for our partners), limiting how many times a specific viewer is exposed to your ad.

Measure & Optimize: Leverage EMG’s real-time reporting and analytics to gauge the efficiency of your campaigns. Make necessary optimizations based on the attribution insights gathered.

Don’t Forget Display: Utilize display in your channel allocation to see greater reporting visibility and incorporate display reinforcement to secure on-the-boarder buyers.

Incorporate a Clear Call-to-Action: Motivate viewers to take the next step by incorporating a concise and compelling call-to-action, guiding them toward downstream activities. For automotive marketers, a dealership address or phone number will suffice!

The opportunities are (almost) endless. Connected TV advertising enables dealerships to connect with their audience through 100+ streaming channels on CTV. EMG’s streaming solution for the retail automotive ecosystem empowers dealerships to precisely target their audience with Connected TV ads while they engage with premium, ad-supported shows offered by leading applications.

With EMG, marketers can launch their CTV advertising campaigns seamlessly with our end-to-end solution. The process is simple, just provide your guidelines and creative, and let EMG do the rest. In just five steps highlighted below, understand how streaming advertising works with EMG.

It’s only up from here! Connected TV advertising can help dealerships take advantage of the growing popularity of streaming services and combat cord-cutting trends. With 115+ million streaming households in the U.S. and 56% of the population eliminating linear TV entirely, there’s no better time to make the jump to CTV advertising. Retail automotive marketers need to reach the households that are no longer consuming traditional TV by re-engaging them with CTV ads.

EMG’s extraordinary attention to detail and measurable outcomes in our streaming solutions is why our campaigns average 30% of the addressed households we target physically arriving at a dealership within 30 days. This result is more than 8.5x the national average of automotive advertising and why EMG produces the most efficient and highest performing streaming campaigns for retail automotive dealerships and associations.

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