By 2024, you’ve almost definitely heard of connected TV (CTV). And if you haven’t, you’re probably familiar with the concept, maybe without even knowing it.
A connected TV is a device that connects to (or is part of) a television, allowing users to access the internet and stream video content. Smart TVs, modern gaming consoles, plug-in hardware like Amazon Fire Stick and Apple TV, and streaming boxes like Roku and Chromecast all fall under the umbrella of connected TV and over-the-top devices.
CTV has been on the rise for years now. Every year, it reaches a new all-time high. Recent research from Leichtman Research Group found that 87% of US TV households have at least one connected TV device.
The challenge with CTV advertising.
The ability to stream videos on-demand isn’t just a huge opportunity for media companies and content producers. It’s also a massive opportunity for advertisers.
Traditional TV commercials were just like the media they surrounded: scheduled at one time, for everyone. Everyone tuning in to the Super Bowl or 9 o’clock news sees the same ads. The vegan will always see the ad for the dairy farmer. The New Yorker who walks everywhere will always see the insurance and car commercials.
With the ability to deliver any type of content at any time, CTV levels the playing field for advertisers. Everyone can see any video, so it’s a matter of getting the right video in front of the right viewers.
Thanks to streaming technology, CTV platforms can take a performance-based approach to ad inventory pricing. Rather than buying a slot, advertisers can pay on a per-engagement or per-view basis.
But, higher accessibility and a leveled playing field mean there’s a significant demand for high-quality ad inventory in the CTV market. The availability of “network-quality” ad inventory is limited, though. And not all ad slots are equal in terms of viewer reach and engagement potential.
Performance TV shifts from traditional media buying to quality of creative output.
Performance television is a subset of connected TV advertising that specifically uses data and key performance indicators (KPIs) to measure the success of ads.
Performance TV is based on the principle that not all ad slots are equal, and some will drive better results than others since theyโll reach a more relevant audience. By utilizing data and KPIs, advertisers can target specific audiences, measure the performance of their ads in real time, and make changes to their strategy.
This data-oriented form of CTV advertising recognizes the challenge isn’t just capturing the attention of the audience who are already engaged in their favorite shows but rather maintaining that attention. The viewing environment is highly competitive, and the audience’s willingness to engage with ads can vary significantly.
Performance TV marks a significant point of inflection. The most important factor isn’t your media buying strategy anymore. Now, it’s all about how well your content resonates with the audience in terms of content quality and relevance.
The “living room quality” benchmark.
Ads in the Performance TV space need to align with the quality and personalization of content users typically expect on platforms like Netflix.
The term “living room quality” is used to describe this benchmark because it emphasizes that the ads should feel like something viewers would choose to watch in their own living rooms. It’s about creating a seamless and engaging viewing experience that aligns with the quality of the surrounding content.
How do you create living room quality ads?
Here’s a quick rundown:
1. Strong concept and storytelling.
Just like any other form of advertising, the ad should have a clear message and a strong story that resonates with the audience.
The CTV platform or streaming service you advertise on will offer robust targeting capabilities, but you also have to ensure that the messaging and visuals of your ad are top-notch. For that, you’ll have to use data you’ve collected from first- and third-party sources to determine the most effective approach for your campaign.
2. High production value.
Ads should look professional, polished, and visually appealing. This is where having a strong creative team and budget comes into play. The higher the production value, the more likely viewers are to engage with your ad.
3. Personalization and relevance.
Performance TV is all about targeting specific audiences based on data and KPIs. This means that ads should be personalized and relevant to the viewer’s interests, preferences, and behavior. Utilizing dynamic creative optimization (DCO) technology can help achieve this level of personalization at scale.
4. Interactive elements.
To truly capture and maintain the audience’s attention, ads should have interactive elements that encourage engagement and interaction. This could include interactive overlays, quizzes, surveys, or mini-games. Or, it could simply be a clickable asset that takes viewers to a landing page or website.
Whatโs the future of performance TV?
As connected TV becomes more prevalent and traditional TV viewership declines, performance TV is only going to continue growing in importance. For brands and advertisers, it’s definitely the way of the future.
But it’s also the best way to reach your consumers at present. The ability to target specific audiences and measure the performance of ads in real time allows for more efficient and effective advertising strategies.
And with the constant evolution of technology, there’s no limit to the potential growth and success of performance TV. So, jump on board now and elevate your brand with performance TV advertising.
