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The Complete Guide to Connected TV Ads for Ecommerce

The Complete Guide to Connected TV Ads for Ecommerce

Last Updated:  
August 24, 2023
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Times, they are a changin’ - and the places we’ll see ads will continue to adapt to where we consume the most content. While traditional TV ads have been around for over 65 years, advertisers have steadily been adjusting to advertising on Connected TV, which is a television set or app that connects to the internet and offers the ability to stream video content. Connected TV has revolutionized the way people consume media by offering more personalized and on-demand access to content. It also plays a role in the changing landscape of advertising, as targeted ads can be delivered directly through these internet-connected platforms. 

But, as connected TV options continue to evolve, people just end up with too many different subscriptions. When we bailed on cable television for a subscription, it sounded like we’d be saving money. But when the content we want to see gets divided over all of the competing connected TV services, that means we end up paying a ton in stacked subscriptions. Some research from Comcast has shown that 80% of consumers prefer an ad-supported service over a higher cost ad-free one. In a time when individuals are looking for a few ways to save on superfluous spending, maybe watching a few commercials in exchange for a cost-break totally makes sense. 

Connected TV (CTV) advertising opens doors to a personalized and interactive experience for viewers. By utilizing Smart TVs, devices like Roku, Apple TV, or even game consoles, advertisers can reach specific demographics with unprecedented accuracy. From real-time bidding to trackable metrics and tailored content, CTV advertising revolutionizes the way businesses approach their marketing campaigns.

In 2022, digital video ad spend increased 21% year-over-year ($47.1 billion) and is expected to rise 17% in 2023 ($55.2 billion). As one of the fastest growing segments that’s up 22% in 2022,  connected TV advertising is great for advertisers because it has excellent targeting abilities and reach - it can find audiences that aren’t on linear TV, and can expect a higher reach overall, since it can advertise everywhere instead of one geographic location. Beyond being beneficial for advertisers finding the right consumers, ad-supported video on demand platforms in the USA generated $3.5 billion in advertising revenue in 2021. It’s basically a win-win for streaming platforms and advertisers. Maybe it’s even a win-win-win if you consider the viewer is getting to watch their favorite content while viewing relevant ads. 

Through this fusion of internet connectivity and television, advertising is no longer confined to generalized audiences and broad reach. Instead, it provides a channel where ads can be specifically targeted, measured, and optimized for better engagement. In this article, we'll delve into some of the top platforms for CTV advertising, some examples of killer CTV content, and how you can build CTV ads into your advertising plans!

Top 3 Connected TV Platforms

Platform #1: Netflix (Standard with Ads)

From the grandfather of streaming services (and the murderer of Blockbuster) comes a trusted, ad-supported option for streaming content. In November 2022, Netflix launched a $7-per-month option with commercials in 12 markets including the USA. Some faithful subscribers may have questioned it, but Netflix announced that there are almost 5 million daily active users on the ad-supported tier, in addition to more than a quarter of all new sign-ups choosing the ads plan in countries where it’s available. 

Compared to other connected TV platforms, Netflix remains King with its variety of original content across so many countries, which means it has a broad and diverse audience which marketers can use to target their advertisements. Netflix Standard with Ads subscribers will see 4-5 minutes of commercials per hour, with either 15 or 30 second ads running at the beginning or during videos.  

Benefits of Advertising on Netflix (Standard with Ads)

  1. Reach: 5 million daily active users is a diverse audience to draw from!
  2. Targeting: User insights Netflix has like viewing history, preferences, and demographics are the secret sauce for creating targeted ads that are relevant and effective. Some relevant stats:
  • More than 70% of Netflix ads plan members are aged 18-49.
  • Global median age of ads plan members is 34. 
  1. Engagement: Have you ever watched a series of episodes for so long that Netflix makes sure you’re still alive? You’re guilty. But that also means you’re watching closely, and would probably watch an ad or two. According to EDO, Inc, Netflix's ad-supported viewers are more than 4x as likely to engage with an ad on Netflix than other streaming services, and more than 4.5x as likely to engage with an ad on Netflix than on linear TV.
  2. Placements: brands have the ability to align themselves with the Top 10 biggest hits on Netflix, and the viewing of the Top 10 most watched lists was three times greater than Netflix’s competitors combined in 2022

Platform #2: Disney+ Basic

Not to be left behind, Disney+ was quick to introduce an ad-supported plan in December of 2022 to compete with Netflix. It started in the US only at $7.99/month, and is expected to launch in Canada and several European countries in November 2023. Unlike Netflix, Disney+ Basic features the same content catalog as the premium subscriptions, lets subscribers stream in 4K, and stream on up to four devices simultaneously. Ads will range from 15 to 45 seconds in length, and total ad runtime will average around four minutes per hour.

Similar to Netflix, Disney+ Basic advertisers now have access to Hulu’s ad-targeting tools, giving them the ability to learn a user’s geo-location, age, and gender. Unlike other streaming platforms, Disney built proprietary technology for digital ads, which means it has more control on the Disney Ad Server (DAS). This allows them to control how ads are delivered, inserted, their format, and how they integrate with programmatic networks.

Since much of the content on Disney+ is geared towards children or younger audiences, there are also strict advertising requirements that must be met in order to advertise on the platform. When the ad-supported subscription option launched, Disney partnered with over 100 recognizable and respected companies like P&G, Target, and Starbucks to give viewers a familiar and controlled ad experience. 

Platform #3: Roku

Roku, in their own words, “pioneered streaming for the TV”. From Roku TVs that have the streaming experience built directly into the television itself to external streaming players, Roku is convenient and cost-effective. With a free Roku TV channel, users simply pay for the device (or TV) to stream content free forever. It also gives them the ability to add other streaming services on their Roku TV or Roku streaming player. Roku reaches 80 million people with its free content, including over 80,000 movies, TV episodes, original and exclusive programs, and 270 live linear channels. Like the other platforms, Roku collects and uses audience data to its advantage. Roku presents a few different options for advertising solutions, including: 

The Roku Channel: The #1 free, ad-supported linear streaming TV channel. 91% of adults aged 18-49 hadn’t seen content from advertisers on traditional linear TV.

Roku Brand Studio: With storytelling built for TV streaming, Roku’s Brand Studio allows you to develop creative that goes beyond a traditional 30-second spot. Roku believes that streaming video needs to evolve the way products are advertised, and that a big story deserves a big platform.

OneView by Roku: The Ad Platform itself, built for streaming. With Roku Audiences, you can see the full ACR (Automatic Content Recognition) footprint in addition to Roku Ad insights that tell you the speed, precision, and cross-channel reach of your ads.

Image credit: Roku

What’s the coolest feature for advertisers? Roku recently announced the ability for viewers to buy a Shopify merchant’s product directly from their TV using the Roku remote. Upon seeing an ad, the viewer can press OK, learn more about the product, then they can be directed to check out using Roku Pay. After the purchase, they can go right back to streaming the content they were already watching. Now that’s an easy customer experience!

This feature is currently available to initial partners True Classic, Ergatta, and Olly, but more Shopify merchants can expect to join in on the fun in the future! 

See how True Classic integrates its quirky, fast-paced, and entertaining ads into the Roku watching experience below:

Tips for Creating Great Connected TV Ads

Connected TV presents a new opportunity for brands and advertisers, because it can be precisely targeted for specific audiences, something that isn’t available with linear TV. In addition, connected TV ads specifically can track how many people saw an ad, how long they watched it, as well as whether or not they engaged with it. With this kind of detail, an advertiser can understand the effectiveness of their ads to iterate and improve the next round. 

To get the most out of your Connected TV advertising, consider the following five tips:

  1. Utilize targeting and relevance

Advanced targeting capabilities make it possible to reach the intended audience by using personalized messaging that’s relevant and lands well. Any time you’re able to build brand awareness and loyalty, you’re sowing the seeds of profit. 

  1. Use enriched viewership data

As Connected TV is always viewed through a device, the IP addresses and device IDs of the devices themselves can allow you to evaluate offline data as well for all devices in the household. When you can analyze household makeup, you can craft creative messaging that’s tailored to the specific audience you’re aiming for.

  1. Use lookalike audiences

Once you’ve run a successful ad following the above steps, you can use what worked to reach lookalike audiences to replicate that success, rather than continue to market to the existing audience. You can use statistics on internet usage, activity, and interests to create a very similar group of people to the one that actively engaged with your brand already. 

  1. Test and iterate before spending too much money

As Connected TV advertising is changing and growing rapidly, make sure you’re testing your campaigns, refining the targeting and creative, then scaling the campaigns as you see them landing with the target audience. 

  1. Measure your ROAS

Take time to ensure the time and money spent is a good return on investment for your brand, rather than just getting eyeballs on the ad itself. Remember to consider attribution, and track where those conversions are coming from! (Psst: try Triple Pixel)

To conclude, Connected TV presents an exciting new opportunity to reach potential customers where they’re already spending time: in front of a screen. By utilizing the tips above, you can get your ads in front of the right audience so you land a new customer and, hopefully, a loyalist for your brand. Consider all of the available Connected TV platforms to determine which one suits your brand the best, and give it a try!

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