CTV advertising is gaining momentum globally. Everybody watching TV via the internet is technically considered a connected TV user or OTT (Over-the-top) video consumer. Reports point out the fact that over 80% of U.S. households have at least one CTV device in regular use. Moreover, more than half of American homes have three or more CTV devices meaning each family member can potentially consume the content separately.
Smart TVs, gaming consoles, streaming adapters are common things in every living room but advertising on these platforms is yet to become standardized and clear. Knowing how to properly measure and track campaign performance on CTV is how you make it comprehensible and productive in the first place.
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CTV features Dynamic Ad Insertion (DAI) and Server-Side Ad Insertion (SSAI) technologies which allow precise targeting, enhanced ways of delivering creatives, and improved measuring capabilities. What DAI or SSAI does is establishes an individual stream for every viewer. After that, the server analyzes the currently available ad spot (ad unit) and inserts a relevant advertisement, targeted by demographics, geographical information, and viewing history. This approach is more likely to convert in comparison to linear. Why? Because appropriately targeted ads provide real value to customers and might solve his/her pains by making precise offers.
The main CTV competitor – linear TV is limited in many ways compared to the newcomer. To begin with, it can only target by rating and large demographic groups. Obviously, there’s not much precision in that. Another limitation of ‘classic’ TV advertising is its inability to split ad units. This means ads can’t be served individually for each family member and a big part of reach has next-to-zero impact. Lastly, CTV offers rich measurements compared to linear. We can identify when viewers take action after seeing the ad and track that behavior between multiple devices.
Despite the obvious benefits, however, many advertisers still hold back their commitment to exploring new territories. And some of the concerns are rational since CTV adoption will require consistent attention to terminology, targeting, and measurement in order to be efficient.
How does CTV advertising work?
CTV ad purchase functions similarly to regular digital advertising so let’s take a deeper look at its buying chain.
The CTV ad market is regulated by three types of platforms: DSPs, DMPs, and SSPs. Demand Side Platforms regulate the buyer side to grant access to video inventory that is available on-demand and in live programming. Some ad publishers list their inventory on ad exchange platforms. DSPs summarize these platforms, optimize impressions, and make them accessible to buyers.
Data Management Platforms act as a mediator between buyers and sellers and gather targeting information for precise offers. Buyers can select pre-made settings like demographics, behavioral patterns, location, or interests.
Supply Side Platforms operate on the seller side. Publishers set minimal price levels and apply changes as inventories are sold. SSPs function through automatic auctions and facilitate the selling of ad impressions. It compares how much money buyers are ready to pay with the prices publishers are willing to sell for. When a match is made, the deal automatically closes.
When a person buys CTV advertising, he or she will use DMP first to collect the viewer’s data on their targets. Later, this information is transferred to DSP along with additional campaign information like pricing and launch dates. The DSP then requests SSP to list the offer and start selling.
The main metrics to measure CTV campaign success
Some years ago, ad rates and effectiveness were calculated on a case-by-case basis, usually relying on viewership indicators. If channel A has more late-night viewers than channel B, it will have higher ad rates. Nowadays, advertisers measure rates and the effectiveness with foot traffic, real-world actions, and other metrics.
Just like in linear, measure and track data in CTV can be complicated since its technical landscape is fragmented. There’s no possibility to track cookies, no flash player support, and not many publishers enable third-party data integrations. But there still are some ways for count stars. Here are the three metrics we recommend bringing your attention to first:
- Reach is the first metric to think about. We can estimate the number of unique users that received the ad in order to get a clear understanding of where your budget goes to the nearest dollar.
- A solid mention goes to the completion rates. This metric can show how many times the ad was played/viewed to the end. Knowing how many people actually finished the ad can give extra insight into how engaged your public is.
- Viewability scores is another metric to measure reach. It shows whether or not a user can see the ad. The score depends on the duration of interaction and the space this ad takes on the screen. Typically, the bigger these rates are, the better for an advertiser.
Despite the shortcomings, all these measurement tools for CTV provide enough information to make a balanced and optimized decision. One of the main benefits CTV, as an advertising platform, has relates to its ability to adjust the settings on-the-go to get the most out of ad spend.
Top Tips to Increase the Effectiveness of CTV Advertisement
- Choose your KPI for CTV campaigns cautiously and separately for each campaign. Each of the tools is best suited for different tasks. If you’re looking for raising awareness, completion rate measurements would be enough.
- Don’t forget the old school. If you previously advertised on linear TV, you must’ve heard of Gross Rating Points (GRPs) or Television Rating (TVRs). Using these metrics is not prohibited in CTV either and in some cases can be an effective interim solution.
- While searching for a vendor who offers CTV/OTT advertising, you need to select carefully. Ideally, draw your attention to companies that are deep inside the CTV-ad niche instead of cross-platform marketing ‘handymen’.
- Invest in programmatic. For broad reach and frequency use programmatic CTV inventory. Programmatic has grown significantly in the last two years and drives enough scale to deliver the reach and frequency for most marketing goals.