Connected TV Advertising 101: The Basics of CTV

Connected TVs (CTV) represent a new, expansive opportunity for marketers seeking to take advantage of more precise digital targeting and the extensive creative possibilities inherent in video advertising. CTV combines the high-impact, highly targeted experience of online advertising with the significant creative reach of TV. 

As more people shift their viewing habits to streaming content, it has become crucial for the savvy digital marketer to understand the ins and outs of CTV. While it remains a mainstay in households, television is now being consumed in a new way via CTV. CTV advertising offers a full-funnel solution that grants brands the ability to precisely target their defined audience. As it continues to grow exponentially, CTV is earning its rightful place as a valued and critical component of online advertising strategies.

What Is Connected TV?

Connected TV (CTV) is any type of TV that is capable of streaming digital video. This includes Smart TVs as well as televisions that use a device to facilitate the delivery of streaming video. The device may be used to stream OTT content, but the two terms are not interchangeable. OTT (Over-the-Top) is content streamed directly from the internet, generally via platforms like Hulu, and Prime Video, and on non-TV devices (like tablets and phones), and OTT does not require a cable or satellite subscription. CTV refers to the devices that stream video content, and OTT is the content delivery method. CTV and OTT stand apart from linear TV which is the more traditional tv offering. In linear TV, a viewer is limited to watching only shows at their scheduled broadcast time and on their original channel. CTV and OTT do not have these same limitations. Viewers can watch what they want when they want.


The rise of CTV has led to a phenomenon known as “cord-cutting.” This term refers to the increasing number of viewers canceling their subscriptions to cable or satellite television services. Cord-cutting has led to a notable decline in linear TV viewership. In contrast, CTV has benefitted from this dip and has substantially increased its share of overall TV viewership. As data reveals, streaming contributed to 30% of total TV viewing time in 2022.

Types of Connected TV Devices

How can a user get started with connected TV? Several devices are available to offer viewers hours of streaming binge-worthy content.

  • Tablets, Phones, Desktops: Thanks to technological advances, you don’t actually need a TV to watch CTV! Devices (like phones and tablets) are capable of connecting to the internet and streaming your favorite content whenever you want and wherever you are.

  • Smart TVs: If you’ve purchased a TV in recent years, you most likely have one of these sitting in your living room. Smart TVs come with built-in CTV, which offers internet capabilities – no apps or devices required.

  • Over-the-Top (OTT) and CTV Devices: These are stand-alone devices that are connected to a TV and provide access to streaming services or other programming accessible only through the internet. Popular OTT and CTV devices include Roku, Amazon Fire Stick, PlayStation, and XBOX.

What Is Connected TV Advertising?

CTV advertising is the purchased execution of television ads on CTV. For advertisers, CTV offers the combined power of precise targeting of digital ad networks and the superior creative reach associated with traditional TV ads. With CTV, you can reach highly targeted audiences without the schedule restrictions and the inferior data reporting associated with linear TV. 

There are many benefits to CTV advertising. The top advantages of CTV advertising are: the ability to tailor and target an enhanced ad experience with a greater level of precision, the power to create highly interactive, engaging visual experiences that are impossible to replicate on other mediums, and finally, the means to deliver ads that are non-skippable. Due to these key distinctions, viewers are more likely to watch ads on CTV in their entirety.

How Does Connected TV Advertising Work?

The execution of a CTV advertising campaign is very similar to the execution of a digital campaign. First, advertisers will create campaign assets. As stated above, the distinct advantage of CTV lies in the enhanced creative capabilities and innovation of video advertising. In order to capitalize on the full advertising potential of CTV, ad creative should utilize the most advanced technology to grab attention and engage the audience. 

Second, advertisers must purchase CTV inventory. Currently, there are three main methods for placing a CTV media buy:

  • Programming via Platforms: Brands can partner with a DSP (Demand Side Platform) and/or an ad network to get started on a CTV campaign. This is often the easiest and most cost-effective option due to the wide reach, lower minimum spend, superior audience segmentation, and premium inventory of DSPs. As the ad is viewed, the platform captures critical performance metrics which enable brands to track the effectiveness, impact, and ultimately, the success of their CTV ad campaign.

  • Self-Service Programmatic Ad Services: The name says it all! When a brand signs up with a self-service ad platform, the brand’s marketing team has full control over all ad buys. This purchase is usually completed through a DSP. With a self-serve programmatic service, advertisers control the ad setup, strategy, bidding, cross-channel scheduling, optimization, and performance tracking. While this method provides the highest level of transparency, it does involve a steep learning curve and marketers are left to navigate the path of their campaign and trouble-shoot on their own.

  • Managed Programmatic Services: With this option, advertisers partner with an experienced 3rd party or outsourced vendor, and this vendor serves as an extension of the advertiser’s internal marketing team. Due to the fact that managed programmatic service vendors work to support multiple brands, the service provided may be slower. Despite this reality, many brands enjoy the peace of mind that comes with having trained professionals manage the day to day logistics of their CTV ad campaign.

The core KPIs and metrics for measuring the success of a CTV campaign are very similar to digital advertising. However, there are additional metrics that marketers will want to track.

How to measure CTV campaign effectiveness:

  • Gross Rating Point (GRP): helps measure the impact of an ad campaign by quantifying impressions as a percentage of a target audience multiplied by the frequency in which that audience sees the ad.

  • Cost per Point (CPP): a measure of cost efficiency and is used to compare the cost of different ads. CPP is calculated as Media Cost divided by Gross Rating Points (GRPs).

  • Frequency: the average number of times your ad will be shown to a consumer, calculated by dividing your ad's impressions by its reach.

  • Reach: refers to the number of people in a target audience that are exposed to a single ad served.

Benefits of Connected TV Advertising

As cable television subscriptions continue to decline, the demand for CTV continues to rise. This provides ample opportunity for advertisers to utilize CTV to serve highly relevant, targeted ads to their specified audience. 

  • Precise Audience-Based Targeting: Comparable to programmatic media buying, CTV uses a similar setup to native and display campaigns and leverages a range of data, such as 1st or 3rd party data and look-alike audiences, for targeting specific audiences. CTV ads utilize streaming data that tracks users across platforms and offer more data to strengthen targeting efforts. The result: your marketing dollars work harder and smarter.

  • Creates an Omnichannel Experience: Today, consumers move seamlessly from device to device. An effective ad campaign requires advertisers to remain connected with consumers across multiple channels. CTV plays a crucial role in this overall strategy by providing an additional touchpoint on a channel that is quickly gaining critical market share. Luckily, many ad platforms can assist in adding CTV as part of an overall ad strategy; for example, at Kargo, we provide a centralized ad platform that enables cross-device targeting capabilities that includes CTV.

  • Real-Time Measurement: CTV advertising provides marketers with deep insights into how their audience engages with their ad campaign and their brand overall. Metrics are delivered in real-time and provide marketers with immediate, relevant data to help optimize and if needed, update their campaign.

  • Rising Popularity: As mentioned previously, viewers are cutting ties with cable and opting for CTV. Data proves that viewers are shifting their TV habits and millennials spend more time with streamed content than older adults with 67% living in a house relying solely on CTV for television entertainment. 

  • Cost-Effectiveness: CTV offers a level of targeting that is simply unattainable with linear TV advertising. This gives CTV the edge in terms of cost performance. In fact, consumers typically view up to 95% of the CTV ads they encounter thus bringing down the CPCV (Cost-Per-Completed-View) significantly. With linear TV, the cost is often the main challenge for advertisers. Brands are at the mercy of the networks when it comes to pricing and this results in an uneven playing field and sky-high ROI expectations.

CTV is Critical to Omnichannel Strategies

Data shows that nearly 84% of all US households watched a connected TV in 2022, and hours spent consuming CTV per household is approaching an average of two hours per day. Clearly, CTV is rapidly gaining momentum. CTV ads deliver deeper and differentiated interactions with audiences and allow brands to remain connected with viewers as they move from their mobile and desktop devices to CTV. 

At Kargo, we see the value that CTV can add to an advertiser’s omnichannel strategy. Thanks to our recent acquisition of VideoByte, Kargo’s clients will soon be able to create best-in-class digital creative experiences and activate to audiences at scale across premium CTV environments. As we work to integrate our technologies, we aim to be in-market with bold and beautiful ad opportunities as soon as possible. 

The bottom line: CTV advertising delivers a highly robust viewer experience that offers strong data analytics and empowers brands to command attention on a channel that has secured its place as a critical part of an omnichannel advertising strategy.