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Connected TV: Why brands should tune in to the future of TV advertising

Show and Tell on Dec 18, 2023

Connected TV: Why brands should tune in to the future of TV advertising

Yep, that’s right. Yet another tactic for you as a marketing professional to consider.

This one’s an easy one to understand though.

We all know it. We all love it.

It’s a little thing called Connected TV. And due to the semi-recent seismic shift in television viewership, it’s becoming an intensely popular place for advertisers to cling to. In this article, we’re going to break down what you need to know to make sure your brand  – alongside every hit dating show and murder mystery – is being seen, heard and discussed.    

Understanding Connected TV

Connected TV refers to any television content accessed through an application but still viewed on a television screen. Unlike traditional cable subscriptions, Connected TV relies on apps such as Netflix, Crave, Disney+, and others. This can be experienced on various devices like Samsung smart TVs, Chromecast, Apple TV, Amazon Fire Stick, Roku, and even gaming consoles like PlayStation. 

Advertising on Connected TV  

Advertising on Connected TV differs from traditional television in its approach. While linear television follows a set schedule, Connected TV is user-generated, making it unpredictable. Instead of buying spots and audiences as one might with traditional television, advertisers purchase impressions on Connected TV. This shift mirrors the digital advertising model, where precision in targeting becomes paramount due to the uncertainty of who, when, and where the audience will be watching. 

The advantages of Connected TV

Finding your audience 

The personalized targeting capabilities of Connected TV allow advertisers to reach a highly specific audience. By targeting ads based on demographics, location, and interests, advertisers can ensure that their messages are delivered to the right people at the right time. This not only increases the likelihood of engagement and conversion but also maximizes the return on investment. 

Access to specialty channels

One of the significant advantages of Connected TV is the ability to access specialty channels that may be out of reach through traditional linear methods. Niche channels like HGTV, Slice, and E! open up for advertisers, allowing them to target specific audiences more effectively. It’s a benefit that can put your brand on display while your audience is watching their favourite shows. That association can lead to long-term success.  

Goodbye “Skip This Ad” button

When buying inventory directly from major providers, the inventory is often unskippable. This means viewers cannot fast-forward through ads, ensuring a higher level of engagement. Direct buying helps maintain this unskippable advantage, providing a more impactful experience.

Now, another way to look at it would be that this “unskippability” puts the pressure on your creative team. If your audience literally has to watch your ad, you’d better be sure it’s impactful. 

Advanced measurement and analytics capabilities

Connected TV provides advertisers with valuable insights into the performance of their ads. They can track metrics such as reach, frequency, and engagement in real-time, allowing for data-driven decision-making and the ability to optimize campaigns for better results. This level of transparency and control is unparalleled in traditional advertising methods. 

The proportions of Canadians that only watch television programming by streaming has increased by 57% over the past 2 years.  

Source: Vividata  

Challenges in Connected TV advertising 

Inventory challenges 

Despite the rising popularity of Connected TV, challenges persist – particularly in terms of space. The unpredictability of viewership and the cautious approach of sellers can lead to underselling, affecting the delivery of campaigns, especially in time-sensitive situations. Unlike traditional television, it’s impossible to fully comprehend the space needed for a specific show at a specific time.  

Frequency capping 

Frequency capping is another challenge in Connected TV advertising. While some platforms implement a standard three times per hour frequency cap, overexposure can lead to viewer fatigue. Striking a balance between visibility and avoiding creative fatigue becomes crucial for effective advertising on Connected TV.

It boils down to a balanced media buy. We recommend starting with one 15 second Connected TV spot per hour-long program.

Limited creative suites 

Having a limited set of creative assets can pose challenges, particularly in avoiding creative fatigue. If a campaign runs with a small suite of ads and viewers encounter the same commercial repeatedly, it may lead to diminishing returns and reduced impact. 

The future of Connected TV

Prime real estate 

One of the anticipated developments in the future of Connected TV is the opening up of premium inventory. Platforms like Netflix, Disney+, and Crave, which were initially closed to advertisers, are gradually allowing ad-supported subscriptions, presenting new opportunities for advertisers. 

Rise in inventory 

A future goal for Connected TV is an increase in inventory to address budget concerns. As more Canadians embrace Connected TV, an expansion in inventory will provide advertisers with a broader reach, ensuring campaigns can be delivered effectively. 

Over 50% of Gen X and Gen Y only watch television programming by streaming.  

Source: Vividata  

Connected TV represents a growing landscape for advertisers. Its unique advantages, such as access to specialty channels and unskippable inventory, coupled with the challenges of inventory unpredictability and frequency capping, make it a nuanced platform to navigate. A balanced approach to buying, creative considerations, and an understanding of the evolving television landscape are essential for brands looking to capitalize on the opportunities presented by Connected TV.  

It’s clear to us that although linear television advertising – comparable to print advertising – isn’t going belly up any time soon, Connected TV is a must-have when putting together this year’s media strategy. Simply put, more people are making Connected TV their exclusive television-watching platform, and it’s easier to reach them with high-performing targeting tactics. As marketers, Connected TV has given us the ROI of digital advertising with the creative possibilities of television. And that – combined with the non-stop buzz every hot new streamed show gets – creates something that in our world is like gold: opportunity.  

Want to explore how Connected TV fits into your media mix? Let's schedule some time to talk.