Connected TV: What it is and how it works

In the digital age, advertising has undergone a radical transformation, and Connected TV (CTV) has positioned itself as a key component in the evolving advertising landscape. As audiences migrate from traditional screens to video-on-demand (VOD) platforms, programmatic advertising has emerged as an effective strategy to reach consumers in a more targeted and personalised way. In this article we will explore the world of Connected TV in detail, examining its impact on advertising, emerging trends and the opportunities it presents for advertisers.

TABLA DE CONTENIDOS

• What is Connected TV?

• What devices are used for Connected TV?

• What formats are used in Connected TV?

• How is advertising space bought for Connected TV and through which tools and providers?

• How is Connected TV measured?

• Most used Connected TV platforms

What is Connected TV?

Connected TV (CTV) refers to devices that connect to the Internet and broadcast video content. They include the famous Smart TVs, but they are not the only connected devices.

The rise of this environment is driven by the shift in consumption and the combination of premium TV, measurement and targeting. 

Unlike traditional TV advertising, which is bought through traditional methods and targets broad demographic audiences, Connected TV allows advertisers to reach more targeted and personalised audiences through the automation of ad buying.

Connected TV leverages programmatic buying for real-time ad buying and placement, allowing advertisers to fine-tune their advertising strategies more efficiently. This form of advertising runs on Smart TVs, streaming devices (such as Roku, Amazon Fire TV, Apple TV, among others) and internet-connected gaming consoles.

Once the overall concept is understood, there are two more aspects that are included within Connected TV:

• Linear TV: This is "traditional" TV. It broadcasts programmes at specific times and on specific channels. Linear TV uses HBBTV technology, which is the technology that allows to replace or add advertising to any linear TV spot through an adserver.

• OTTs (Over-the top): Offers video content distributed over the internet that can be viewed on both smart tvs and smartphones:

  • AVOD (Ad-Supported Video-on-Demand): Are financed by “adverts”

    

  • SVOD (Subscription Video-on-Demand): Are financed by "subscriptions".

    

  • BVOD (Broadcaster Video on Demand): “broadcasters” linear tv on-demand content

       

What devices are used for Connected TV?

There are several devices and technologies that are used to achieve connectivity in televisions. Some of the most common devices include:

• Smart TVs: These are televisions with intranet connectivity capabilities and integrated applications. These Smart TVs allow users to access streaming services, applications and web browsers directly from the TV. 

• Multimedia devices: These are devices that allow access to and playback of multimedia content on a TV. These devices are often designed to enhance the entertainment experience by enabling the streaming of online content. Examples include Roku, Apple TV and others.

• Game consoles: Platforms such as Xbox, PlayStation and Nintendo Switch are not only devices for playing video games, but also offer streaming services and access to multimedia content.

What formats are used in Connected TV?

Connected TV has transformed the way we consume TV content, providing a more interactive and personalised experience by harnessing the capabilities of the Internet. To achieve this convergence between traditional TV and digital connectivity, it is crucial to understand the various formats that underpin this technological revolution.

Linear TV

HBBTV (Hybrid Broadcast Broadband TV) is not itself a video format, but a global standard for the delivery of broadcast and broadband services over digital television. HbbTV combines traditional broadcast transmission with broadband connectivity, enabling an interactive user experience on Smart TVs and compatible set-top boxes.

Within the HbbTV standard, services can include interactive applications, rich content, personalised advertising and other web-based experiences. These services often use various standard video and audio formats for streaming and playback.

• HBBTV Video: Is like a normal linear TV commercial (video). The peculiarity it has is that it can be shown with an overlay on the videos and with a single click take them to the website the ad belongs to. In addition, there are certain ads that play automatically when the user changes channel.

  

• HBBTV Display: It is usually a static image, text or at most a gif that is designed with L or U shapes that occupy a large space on the screen as you can see below.  There are also banners which are information boxes that are displayed in the bottom corner of the screen. Depending on the size of an advertisement, it can take up to 25% of the screen surface. Therefore, the viewer's attention shifts from the programme they are watching to the advertisement displayed.

  
  

Connected TV / YouTube / OTT

• Pre-roll Online Video: Is a type of online advertisement that plays before the main content begins, whether it is a video, live stream or other multimedia content, and usually has a fixed duration, typically a few seconds to a minute.

  
  

• Mid-roll Online Video: Plays during a natural pause in the main content, such as in the middle of a longer video.

• Post-roll Online video: Reproduced at the end of the main content. They are the least common.

• Rich Media / Immersive: Rich Media is a digital advertising format that includes interactive and multimedia elements, such as images, videos, animations, sounds and interaction features. Immersive Media, on the other hand, are those experiences that immerse the user in a digital environment in a more complete and immersive way.

  
  Both terms focus on the idea of providing more engaging and effective experiences compared to standard advertising. In terms of video advertising, Rich Media ads may include interactivity and multimedia elements, while Immersive ads may explore more advanced technologies to create three-dimensional or immersive experiences.

  
  
  
  

How is advertising space bought for Connected TV and through which tools and providers?

The type of buying depends on the formats you decide to activate, the segmentation, i.e. it depends on the overall context.

As it is an environment under construction, there is no standard for the buying procedure at the moment, but it can be carried out through two main approaches: direct buying and programmatic buying.

• Direct buying: Involves direct commercial agreements between the advertiser and the content provider or ad space owner on CTV, allowing for customised negotiations and control over ad placement.

• Programmatic Buying: uses automated technology to buy advertising space in real time through advertising platforms and networks. It provides efficiency and advanced data-driven targeting.
  
  Within programmatic buying, DSPs (Demand Side Platform) are used to launch Connected TV campaigns. DSPs are platforms that allow advertisers to buy real-time advertising inventory from multiple sources. Some DSPs offer specific options for buying CTV advertising.

The choice between the two approaches will depend on the nature of the campaign, the target audience and the specific advertising objectives, and many advertisers choose to combine both strategies to maximise the effectiveness of their CTV campaigns.

How is Connected TV measured?

Measuring Connected TV (CTV) involves assessing various aspects to understand the effectiveness and performance of advertising campaigns, as well as user interaction with the content.

The nature of this medium, where the viewing device is often shared, must be taken into account. It is estimated that each device reaches 2-3 users.

The metrics available in CTV are as follows:

• Unique devices: The number of different devices that have interacted with or have been used to access content through Connected TV during a specific period of time. 

• Impressions: The number of times an ad is shown.

• Viewing time: The total amount of time users have spent watching content on CTV.

• CPM (cost per thousand impressions): Used to calculate the cost per thousand impressions for a particular ad.

• CPCV (cost per completed view): Measures the price of each completed ad.

• Brand lift study: Also in CTV it is possible to compare the brand perception between a group exposed to the ad and a group that has not been exposed to the ad.

Most used Connected TV platforms

Connected TV (CTV) platforms are diverse and cover a variety of devices and services. Some of the most widely used ad-supported platforms available in Spain are as follows:

In the digital age, Connected TV (CTV) has redefined advertising, offering unique opportunities. From Smart TVs to multimedia devices, CTV has created a diverse ecosystem. We explore ad formats, programmatic buying options and key metrics. We highlight the most widely used platforms in Spain, leading the way to the future of digital advertising. CTV, with its innovation, continues to light up the advertising landscape.