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Connected TV: What do we need to know about it?

116 & West

Connected TV

When we look back on the history of television as a medium of entertainment, one can’t help be filled with feelings of nostalgia. Gone are the days of massive boxes that sat in carpeted living rooms, radiating Ed Sullivan to families across America. Times have changed, and with it, the modern-day consumer. The content consumer of today knows what they want and when they want it. Connected TV has changed the way people consume content and has, in turn, affected the way advertising on TV is carried out.

But what is connected TV? Simply put, it’s any TV that has the ability to connect to the Internet. A connected TV can come in the form of a smart TV that connects directly to the Internet, a TV that is connected by an “over the top” device like Apple TV, Roku, Chromecast, or a TV that is connected via a gaming console. What does the changing landscape of content consumption mean for brands and advertisers?

Below are 5 things you need to know about connected TV:

  1. It’s becoming more ubiquitous than ever

According to eMarketer, 75% of U.S. households have a connected TV. That number is expected to grow to 78% of households by 2020. That means that the vast majority of households in the U.S. are utilizing technology to watch the shows they want to watch and when.

Advertisers will take note of this growing trend and position their advertising efforts to include these consumers. While most users still watch traditional television in conjunction with their connected devices, it’s hard to ignore the numbers. It’s becoming increasingly more common to see advertising while watching connected TV, and it’s no secret why.

  1. The typical user is not who you think

If you were to take a stab at guessing who the average user of connected TV is, whom would you pick? The millennial in a dorm room watching Game of Thrones and Arrested Development reruns?  The 14-year old consuming content on their iPad?

You may be surprised to learn that the average connected TV user is 38 years old with an average household income of $135k. Further information on user statistics notes that 58% of users are male, and 42% of users are female. 38% are college grads, and 65% have children.

This is important to note for advertisers because it further legitimizes connected TV as a mainstream way of viewing content. This isn’t a trend only utilized by younger generations. This has quickly become a staple of every generation and class within society.

  1. Exciting advertising opportunities exist

Now that we know what connected TV is and who uses it, how can we reach them with messaging? While Netflix still dominates the connected TV world, other platforms like Hulu, YouTube, and Crackle still give advertisers a chance to reach an engaged audience.

There are a few different options on how to reach users. Advertisers have the ability to go App Direct, meaning they can place media through a single app like Hulu or WatchESPN. They can also use Device Direct targeting, which allows them to place media through a Roku or Chromecast.

The most promising way to reach consumers comes in the form of audience buying. This means that an advertiser is able to buy an audience through sophisticated targeting and find them no matter the device, app, or program. This is becoming the preferred method of targeting, as it follows your target audience through their content-consuming journey.

  1. Audience targeting is robust

A successful advertising campaign is only as good as its media placement and targeting abilities. Thankfully, connected TV uses what has been learned in the digital age as well as traditional targeting methods to reach the right consumer at the right time.

Basic types of targeting include contextual (e.g. content genres and groups of apps), as well as geographic targeting that has the ability to start at the state level going all the way down to specific zip codes. Advanced targeting includes demographics (e.g. age, gender, income, ethnicity), behavioral targeting like channel usage and subscription status, and TV viewership like programs, networks, and dayparts. In terms of where we were with traditional TV, this type of targeting is far more advanced and will have a better chance of serving relevant advertising to a relevant consumer.

  1. It’s here to stay.

Didn’t someone once say that the Internet was a fad? And social media? Well, we certainly hope these trend forecasters have learned their lesson. Connected TV and the new way of consuming content are here to stay.
Why would anyone choose to wait for their favorite show to be broadcasted at a certain time when they could just watch it on their own time? Anyone that has ever had a serious weekend binging session on a new show knows it’s hard to go back to the old way of doing things.

With the number of households that have some form of connected TV trending upward, advertisers will need to start incorporating a connected TV strategy into their media plans and creative executions.
Whichever way you slice it, technology is improving by the day, and ultimately, the consumer wins. Connected TV is just another way to put the power in the hands of the consumer and allow advertisers to place their messaging in front of a relevant audience. Be sure to think through your advertising strategy and figure out if placing media on connected TV is right for you.

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