By: Karen Ring, Head of Research and Insights
Where consumers go, advertisers will follow. Connected TV (CTV) is integral to today’s media strategy because it encompasses the best of both digital video and TV – precision targeting in a premium video environment. When we say CTV, we’re referring to a TV set connected to the internet via a streaming device or a Smart TV through which viewers can enjoy broadcast-quality, long-form video content. Although CTV provides the same premium, full-screen viewing experience as linear TV, the buying process is more akin to buying digital video.
Here is a quick glance at how CTV is transacted and how it compares to linear buying.
Let’s dig a little deeper into what some of these differences entail.
Transacting on Common Ground
Both Linear TV and CTV use CPMs as a measure of efficiency for negotiating and planning a buy. But because Linear TV measures audiences in “rating points” it also uses a cost per point (CPP) valuation which refers to how much it costs to buy one rating point, or one percent of the population in the area being considered (for instance, the entire United States or just Los Angeles). CPP’s are used to assess the cost of reaching a target with a schedule of programs.
Linear TV is a content marketplace which means when buyers approach linear TV, they’re looking to buy spots that air within certain programs whose viewers line up with their target audiences. An advertiser might want to buy Fixer Upper on HGTV to reach Female DIYers. But this contextual buy also comes with the caveat that an advertiser’s message will be shown to other audiences that may not be relevant.
But CTV buyers don’t buy shows, they buy audiences. CTV inventory reaches only desired viewers because it is based on audience targeting, and its value is determined by a target audiences’ size. If an advertiser wants to reach Female DIYers in premium environments, buying CTV can efficiently reach this intended audience wherever they are consuming CTV content — with less waste than a linear only program schedule.
In digital, the value of the content is based on the value of the individuals viewing the content.
The lines are blurring between CTV and traditional TV viewing and the same will soon be said for how advertising on these platforms is planned, bought and measured. It is imperative for marketers to understand the similarities and differences of each to navigate the evolving TV advertising world.
To learn more about global and generational CTV usage trends, behavior patterns and attitudes, find out more about our CTV University program here.