Programmatic CTV Advertising: Benefits, Types, and More

One of the most significant shifts in the advertising landscape is the rise of programmatic CTV advertising. In today’s digital era, end-users increasingly rely on streaming platforms and connected TVs (CTVs) for digital content. This is where connected TV advertising is quickly becoming a leading format for advertisers to reach massive audiences. The data-driven approach allows advertisers to precisely target specific consumer groups segmented by geography, behavior, or demographics.

As U.S. audiences cut the cord to embrace streaming services, CTV advertising platforms offer advertisers a powerful way to reach them. According to Statista, the number of households without traditional cable subscriptions is projected to reach 46.6 million by 2024.^[1]

In this blog, we will discover what is programmatic CTV advertising and how does it work, its benefits, types and future trends.

Table of Contents:

• What is Programmatic CTV Advertising?
• Benefits of Programmatic CTV Advertising
• Different Types of Programmatic CTV Advertising
• How Does Programmatic CTV Advertising Work?
• What is the Future of CTV Ads?
• Why Choose Rishabh Software for CTV Ad Platform Development?
• Frequently Asked Questions

CTV programmatic advertising refers to the practice of buying and selling advertising spots on connected television (CTV) platforms through automated software. This data-driven approach allows advertisers to target audiences with laser precision based on demographics, location, interests, and behaviors to deliver ads to the right viewers at the right time, offering greater efficiency and reach compared to traditional TV advertising.

Unlike linear TV, the CTV advertising platform allows you to choose the audience segments and offer personalized ads. This boosts the possibility of a high conversion rate and gives you more control over your advertising campaign—determining who will see your ads, and how often ads will display to particular users.

Programmatic CTV offers multi-fold benefits over linear TV advertising because ads are easier to target and measure. It also allows advertisers to bid and purchase ad placement on the connected TV space to reach targeted users with the right messages. Let’s explore more such innovative benefits that advertising on CTV platforms offers brands:

Efficiency and Automation

Programmatic CTV ads automate the process of buying ad space using demand-side platforms, supply-side platforms, and data management tools. This automation streamlines operations, increases productivity and efficiency as compared to the manual approaches required in traditional advertising.

Cost-effective

Unlike linear TV advertisements, where you invest solely in showing your ads to the masses with the assumption & hope that few of them will convert into leads, programmatic CTV allows for highly targeted campaigns. These campaigns enable brands to select their targeted audience wisely based on factors such as location, age range, type of offering, interests, gender, purchase behavior, and more. This targeted approach and precision maximizes ROAS (Return On Ad Spending), reduces wastage of ads and it’s dynamic pricing leads to lower cost. Programmatic CTV advertising is therefore quickly becoming a preferred approach for delivering instant results and is suitable for brands of all sizes, from small to midsize to large.

Targeted Audience Selection

Programmatic CTV platforms enable you to create customer segments based on various data points, including consumer interests, preferences, geography, and viewing habits. By leveraging these crucial attributes, you can deliver targeted advertisements to specific audiences. Instead of broadcasting mass messages, segment-based ads allow for the precision delivery of personalized messages tailored to individual viewers.

Real-Time Insights and Optimization

Programmatic CTV advertisement provides detailed campaign metrics including impressions, viewability, completion rates, conversion rates, engagement metrics, and many more. These real-time insights enable advertisers and brands to make data-driven adjustments quickly and optimize programmatic-connected TV ad campaigns for maximum effectiveness.

Personalized CTV Ads Campaigns

Delivering a personalized experience is crucial for success in today’s marketing landscape. Traditional linear TV advertising often lacks personalization, but modern Programmatic CTV advertising empowers brands to create customized ads by leveraging data analytics and audience segmentation.

A 2022 survey in the United States revealed that 81%^[2] of Generation Z respondents and 57% of millennials appreciate personalized ads.  Thus, leveraging data analytics and audience segmentation allows brands to deliver highly relevant ads to digital stream viewers, leading to greater engagement and conversions.

Connected CTV advertising uses automation for buying ad spaces in several different ways, based on your campaign goals and methods. Let’s explore these different models.

• Real-time Bidding: RTB is the most common programmatic CTV ad model, offering flexibility and the ability to purchase ad inventory on an impression-by-impression basis. In this model, advertisers bid for advertisement space on digital platforms like CTV in real-time – as users begin streaming content. Ad exchanges facilitate these auctions, and the highest bidder wins the right to display their ad.
• Private Marketplace: Under this model, advertisers directly deal with publishers or networks to pre-occupy ad placements in the private marketplace. This model is known for offering advertisers more control over ad placements.
• Programmatic Direct: It automates the entire process of buying and selling ad inventory between advertisers and publishers. Advertisers are allowed to work directly with publishers for guaranteed CTV ad It ensures that ads run on high-quality sites, reach the best audience, and create a win-win approach for both parties.
• Audience-based Targeting: This type of programmatic CTV advertising targets specific audience segments based on demographics, their behavior towards products/services, preferences, etc., to deliver more personalized ads through relevance based on data analysis.

CTV programmatic models like real-time bidding and audience-based targeting for ad space are often based on multiple parameters to achieve successful ad campaigns. Here, we will explore how CTV programmatic advertising works and what aspects are included in the entire process.

1. Before jumping to the actual ad display during digital streaming, advertisers have to be ready with multiple parameters like ad campaign objectives, audience segmentation via using Demand Side Platforms (DSPs).
2. By utilizing the power of connection between Supply-Side Platforms (SSPs) and demand-side platforms, publishers who own ad inventory, make ad space available through SSPs. This allows advertiser to purchase the placement for CTV ads.
3. The DSP’s algorithm has the capability to automatically evaluate ad inventory based on advertiser- defined parameters like demographics, objectives, budget, and others added by advertisers. It then automatically bids on suitable placements according to the advertiser’s preferences and targeted audience.
4. After the successful bidding for ad inventory, respective ads are served to the targeted CTV audience.
5. Once ads are served to the CTV users, data (viewability, impressions, conversion rate, click-through rate, and others) are collected and analyzed in real-time to measure the effectiveness of the ad campaign.

According to Statista, CTV programmatic advertising spending is expected to grow from 24.6 billion in 2023 to 42.4 billion dollars by 2027^[3]. As technology continues to evolve, CTV ads are expected to become the top choice for advertisers and publishers, surpassing traditional linear TV due to their enhanced ability to reach targeted audience segments more efficiently.

However, in the near future, programmatic CTV advertising is poised to transform the advertisement industry, brands, and the marketing sector with unprecedented advancements. Advanced data capabilities and AI-driven services are expected to significantly enhance data collection, analysis and audience targeting.

Moreover, it offers a platform for dynamic creativity, optimization, and highly personalized ad experiences. Its reliance on cloud-based infrastructure will enhance efficiency and scalability, empowering advertisers to handle large volumes of data generated by each ad and enabling powerful data analytics and processing.

Overall, advertisers can achieve greater efficiency and gain a competitive advantage by leveraging the future of programmatic CTV advertising – including leading tech stacks like cloud platform services and digital process automation.

As a leading AdTech development company, we have extensive experience in building customized CTV ad platforms backed by advanced data analytics services and in managing data over a cloud infrastructure. We use an advanced tech stack to help you streamline campaign management, optimize ads, and ensure efficient buying and robust campaign measurement.  Our AdTech development team is ready to help you enhance and grow your business with modern ad management capabilities across display and native, in-app mobile, video and audio, OTT and CTV, in-game and DOOH.

Q: CTV vs OTT vs Linear TV vs Addressable TV – What is the difference?

A: Here’s a breakdown of key differences:

• Linear TV refers to traditional broadcasting and cable television that operates through satellite or cable networks and airs programs according to a predetermined and fixed schedule.
• OTT stands for Over-the-Top. It is a digital platform that consists of digital content and allows users to stream it anytime, from any location, and on any device within internet coverage.
• CTV, or Connected Television, operates under the internet and is also known as Smart TV. Users can connect other external devices like Roku or Fire Stick to access all OTT platforms.
• Addressable TV is a technology that enable targeted advertising process on liner as well as connected TV.

Q: Why should I choose CTV advertising over other modes of advertising?

A:  Selecting CTV advertising over other modes of publishing ads offers several advantages. Here is a quick list of benefits:

• Precise targeting approach
• Automation of buying and selling ad space
• Flexibility and control over an ad campaign
• Cost-effective and ROAS method
• Detailed metrics and real-time data analytics

Q: How to advertise on Connected TV?

A: There several steps that need to follow while advertise on Connected TV, here are crucial steps

• Define your advertising campaign objective.
• Choose the right segmentation of audience based on different factors like consumer interests, behaviors, demographics, etc.
• Select the right platform to circulate your ads.
• Draft engaging ad content.
• Use the programmatic advertising approach to automate the buying process of ad space.
• Keep track and monitor your ad campaign for optimization.

Q: What is the CTV marketing best practices

A: There are key best practices for CTV marketing:

• Gain an understanding of your audience and draft the message accordingly.
• Draft engaging ad content for conversion.
• Make better use of data-driven insights to optimize ad campaigns.
• Measure the performance of your CTV advertising through different metrics like impressions, engagement, viewability, and conversion rate, etc.
• Stay updated on industry trends.

Q: What are the biggest CTV platforms?

A: Some of the biggest CTV platforms are Roku, Amazon Fire TV, Apple TV, Samsung Smart TV, and Google Chromecast.

Footnotes:

1. https://www.statista.com/statistics/482958/number-cord-cutting-tv-households-north-america/
2. https://www.statista.com/statistics/796167/us-internet-users-primary-attitude-personalized-video-ads/
3. https://www.statista.com/statistics/1048897/connected-tv-ad-spend-usa/