Connected TV (CTV) is the latest video advertising buzzword floating around the industry. Yet many people still aren’t sure what it is or the power it has to transform video advertising. Connected TV is simply a television that connects to the internet. CTV combines the flexibility of digital with the premium content of television, allowing viewers to access content on mobile, tablet, laptop, and over-the-top (OTT) devices, including Roku, smart TVs, Apple TV, Chromecast, Xbox, etc. Now, information can flow both ways, and ads can do new things.

How Does Video Advertising Work on CTV?

CTV is a component of over-the-top video content. OTT content is delivered via the internet without multi-system operator (MSO) involvement, like Netflix. Most OTT content mimics the services of a traditional media service but over the internet, and it is usually much less expensive.

Users are watching shows on the internet rather than via a cable subscription. The viewing experiences are similar, but users are willing to view video advertising in order to continue to watch streamed content. CTV administers video advertising before and during content, called pre-roll and mid-roll advertising, when users are most willing to experience an advertisement to be able to watch the content.

Why CTV is the Future of Video Advertising

1. CTV is Everywhere

As OTT giants like Netflix, Amazon, and Hulu produce their own highly popular shows, more and more people cut the cord and utilize CTV devices. According to a Nielson report, more than half (58.7%) of U.S. homes with a TV now include at least one internet-connected device that’s able to stream to a TV set. According to Edison Research & Triton Digital, 64 percent of people in the US currently own a Connected TV. The time is ripe for a video advertising boom as households quickly adopt CTV technology.

2. People Don’t Mind CTV Ads

Fifty-four percent of viewers are more accepting of and enjoy video ads via their streaming service (Adweek Webinar, 2017). Most OTT applications are less expensive than traditional TV, which creates an environment where users don’t mind experiencing video advertising on CTV. Additionally, there is a much higher ability to target the audiences you’re looking for based on the data OTT apps provide, creating a higher return on investment than traditional television advertising.

3. Enormous Video Advertising Opportunity with CTV

The massive growth of CTV is creating an enormous opportunity for video advertising with CTV. eMarketer states that by 2020, the CTV household universe will grow to 97.7 million, or 78 percent of US households, while over 6 million TV households will cut their paid subscriptions.

As technology improves and even more people adopt CTV into their homes and daily lives, more traditional TV ad dollars will shift in the direction of CTV.