Digital Marketer's Guide to Connected TV

According to a Nielsen report, 84.9% of U.S. households have at least one connected TV (CTV) device (as of January 2023). This year is also expected to mark the first time Americans will spend more time watching digital video than traditional television. Your target audience is very likely part of this trend, and it is easier than ever to reach them. 

Connected TV by the Numbers

• CTV now reaches two out of three American viewers.
• CTV advertising is projected to surpass $27 billion by 2025.
• Americans are expected to spend 52% of their viewing time consuming online video, marking the first time digital video will make up more than 50%.
• July 2022 marked the first time leading streaming services drew more viewers than cable TV.
• Non-pay TV households will exceed traditional pay TV households in 2023. By 2026, non-pay TV households will outnumber pay TV households by more than 25 million.

Below, with the help of our partners at The Trade Desk, we answer a few of the most common questions we’ve received about developing effective CTV testing, targeting, and measurement strategies.

1. What ad inventory can I buy via Connected TV devices?

Advertisers can reach their target audiences through Connected TV in a number of ways. Streaming providers such as Hulu, SlingTV, DirecTV NOW and others all sell commercial slots that can be purchased programmatically using audience targeting that is more sophisticated than linear TV (more on this below). People tend to forget that networks such as ABC and CBS also have their own apps for streaming shows that also have commercial inventory. 

Like any other digital strategy, the first step is identifying which streaming channels are attracting your audience and then developing your game-plan for meeting them there.

2. How do I reach my target audience on Connected TV?

One of the benefits of connected TV is the depth of audience insights and targeting available to marketers, especially now with The Trade Desk’s TV Quality Index. This metric can help advertisers analyze the reach and quality of their campaigns to implement superior ad experiences for viewers. 

Even brands that bank on live TV commercials for mass reach can accomplish those same goals through connected TV buys. For example, using third-party data, a sporting goods brand can target users who have demonstrated interest in live sports (online search behavior), visited a sports arena in the past year, purchased gear for a specific team, and/or watched sports related content in a linear or OTT environment. By layering some of these audience segments on top of first-party data, advertisers will still be able to reach existing sports-fanatic consumers and learn even more about their consumption habits.

At Rise, we always emphasize the importance of starting digital strategies with an audience-first mentality. Understanding who your customers are and where they consume content is the foundation of developing a plan to reach them digitally.

3. What else should I keep in mind?

Despite the rise in streaming options available, daily television consumption has slowed down to near pre-pandemic levels. The rise in connectivity, however, means that the video content Americans are consuming is via an internet connection.

Becoming familiar with Connected TV tactics now will prove very valuable in a crowded advertising space in the future. A good way to do so is incorporating your digital video campaigns into premium environments. You should be able to adapt to current trends and adjust your plan with a targeting strategy so that you can be where your audience is.  

4. What do you think will happen next?

Continued innovation in the TV industry and changes in viewing habits from consumers suggest that audiences will continue watching more and more video on connected TV and streaming devices. In an effort to compete, traditional TV channels have developed their own streaming channels, such as NBC’s Peacock, and are investing less in linear programming. The continued growth of CTV inventory sources means more reach and more options for marketers.

Exponential growth across streaming may also be reaching a turning point. Netflix has experienced a slowdown in anticipated new subscribers. Disney announced reduced long-term forecasts for streaming and a second round of layoffs in April of this year, with many in the streaming division impacted. If streaming does plateau, it will be more important than ever to spend your marketing budget in the most strategic ways possible.

Rise is here to help you navigate the ever-changing CTV landscape and benefit from its hyper-focused audience and incremental targeting capabilities. If you’d like to chat more about how to update your digital strategy, reach out today.

Note: This blog was originally published in June 2021. It was refreshed and expanded in June 2023.