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What Is Connected TV? TV Media Buying Explained

Your Guide to the Exciting World of Connected TV Terms

What Is Connected TV? TV Media Buying Explained

10 Min Read

Connected TV is currently one of the fastest-growing channels in advertising — and it’s not surprising. Connected TV ads are an effective way of reaching your target audience; they’re highly targeted, unskippable, trackable, brand-safe ads that are guaranteed to make an impact. They provide a broadcast-quality ad experience, without the drawbacks of the ‘throw it against the wall and hope it sticks’ approach of linear TV advertising.

With a pedigree like that, it’s no big surprise to see that Connected TV ads are becoming a mainstay of many brands’ marketing mix. That means if you want to keep up, you’re going to have to get up to speed with the ins and outs of Connected TV.

Let’s start with the basics — the terminology and definitions of the TV media buying space. After all, if you’re using Connected TV advertising, you better know what people are talking about when they start dropping three-letter combos like OTT, VOD, and GRP. And understanding the distinctions between Programmatic TV, Advanced TV, and Addressable TV can make all the difference in becoming an expert on the digital TV landscape.

We first created this glossary early last year, and there’s been a lot of updates in both the industry and terminology. So check out our new and improved Connected TV Terminology guide, making sure to pay special attention to terms with the (updated) indicator, which suggests a new term or updated content for you to learn.

What is Connected TV (CTV)?

Before we get into the industry terminology, we thought you might like to have a baseline Connected TV definition to get you started.

> Connected TV | Connected TV (CTV) is digital content accessed by apps and streamed over smart TVs, mobile, or OTT devices via an internet connection.

Connected TV vs. OTT

Is OTT the same as Connected TV? Great question! Let’s start with some terms you may have heard when people discuss Connected TV and Performance TV as a whole. Because it’s still relatively new, there are a couple of competing labels that have cropped up recently: OTT and IPTV.

These terms are often used interchangeably in the industry and are essentially the same thing.

> (updated) Over The Top (OTT) | Over-the-top (OTT) content goes “over” your cable box to give you access to TV content. In other words, OTT advertising platforms deliver content using an internet connection as opposed to a cable or broadcast provider. If you are comparing OTT vs. CTV, you are in luck – they are the same thing! You may also see OTT advertising described as OTT Programmatic.

Connected TV vs. IPTV

> (updated) IPTV | IPTV stands for “Internet Protocol Television.” This variation comes from the idea that content is being delivered through IP packets, hence the name “IPTV.” While IPTV is also on-demand video over an internet connection, it is done so in a slightly more controlled manner: through a closed proprietary network delivered through an ISP.

Two examples of IPTV would be Verizon Fios TV and DIRECTV STREAM.

Connected TV Devices

What are Connected TV devices? Connected TV isn’t just for smart TVs there are a number of ways to stream CTV content.

> Tablets, Phones, Desktops | With the proliferation of Connected TV apps like Hulu and Twitch, these gadgets have been transformed into mini-television sets. You don’t need a TV to actually watch TV anymore.

> OTT/CTV Devices | OTT & Connected TV devices connect to your TV to allow for a continuous stream of content – meaning that as long as your internet connection is not disrupted, you don’t need to wait for an entire piece of content to download before hitting play. Popular examples are Roku, Chromecast, Amazon Fire Stick, Apple TV, and the major gaming consoles.

> Smart TVs | If you’re buying a big screen these days, you’re most likely buying a Smart TV. This is a television with a built-in connection to the internet, no sticks or dongles are required.

Content, Inventory, and Formats

There are quite a few ways content and inventory in the Connected TV ecosystem are discussed. Here are a number of the most common terms.

> Full-Episode Player (FEP) | “Full-episode player” (FEP) refers to professionally produced, TV-like content that can appear on any device type, across both apps and web browsers. This means that the content is television length, typically 30-60 minutes, with commercial breaks in between. FEP content is inclusive of things like the news, stand-up comedy, cooking shows, etc.

> Live Streaming | “Live streaming” means that the television content you’re watching is being streamed in real-time over the internet. This live content is usually delivered by a paid streaming service, or directly by the network.

> Video On Demand (VOD) | Viewers don’t plan their schedules around TV — they fit TV into their own busy schedules. Video on demand (VOD) is becoming increasingly popular because it allows users to watch the content they like at the times they want to watch it. Missing an episode isn’t a problem; VOD content is available to stream or download after it airs live.

> (updated) Living Room Quality Connected TV | This is live or on-demand, ad-supported programming through an internet connection (not via a paid cable or satellite provider), from blue-chip broadcast and content companies. This content is primarily viewed on a large screen/HDTV in the living room over CTV and OTT advertising accessible devices such as an Apple TV. This is brand-safe, quality programming served via an IP address and in a format that enables a more personalized ad experience.

> Direct to Consumer (DTC) | This refers to delivering content without using a middleman. For example, Netflix serves its content direct to consumers without using a network.

> Content Delivery Network (CDN) | Proxy servers in data centers that deliver content to audiences (this one is kind of a no-brainer).

> OTT aggregators | Offer content from many providers, but without the services of an MSO (Multi-system operator, or a company that owns and operates two or more cable TV systems).

> OTT standalone services | These content providers do not require an MSO and are delivered directly to a consumer over the internet.

> FASTS | Free ad-supported streaming services are, well, streaming services that have users watch ads rather than requiring a subscription. Some examples that support streaming TV advertising include Xumo, Tubi, Hulu, and Pluto TV.

> FNAS | Free network apps allow users to watch free streaming TV content from cable and broadcast networks and offer ad-supported clips of shows for those without a cable or broadcast subscription.

> Hybrids | Hybrid subscription and ad-supported apps will allow users to pay for a version of their services with fewer ads. Examples include Hulu or CBS All Access.

> vMVPDs | Virtual Multichannel Video Programming Distributors, also called “skinny bundles,” are cheaper digital cable or satellite packages. vMVPDs partner with cable and broadcast networks in order to get a few minutes of content, which they distribute across live channels.

Measurement Metrics

With a new channel comes new methods to track success. And while these TV advertising analytics and campaign tracking metrics should be familiar to marketers who have done television in the past, some of these definitions may be new to digital marketers.

> (updated) Reach | Reach is the number of unique people that will be exposed to your Connected TV ad. It’s often shown as a percentage of a specific audience; for example, 75 percent of 18-24 year olds. It indicates the percentage of the targeted population that has seen at least one traditional or Connected TV spot.

> Frequency | Just because you delivered one million impressions doesn’t mean that one million unique people viewed your ad. Frequency is the average number of times you’re delivering an ad to a given person. Knowing your frequency means you can prevent the same ad from being served to the same person over and over again. So, if you deliver 3,000 ads to 1,000 unique people (your reach), your frequency is three.

> GRP (Gross Rating Point) | GRPs have been around before the internet even existed. It’s used to determine how many people within an advertiser’s target audience saw an ad. For example, let’s say you want to target males between the ages of 18 and 34. You know that 30 percent of viewers in this demographic watch a certain sports game on Sunday night, so you purchase four commercial spots while the game airs. Since you are reaching 30 percent of your target audience, and are serving them roughly four ads each, this would get you to a GRP of 120.

> CPP (Cost Per Point) | CPP measures how well, for the price, your ads reach your desired audience. Once you have your GRP, your CPP is simply your total media cost divided by your GRP. It’s what you’re paying per gross rating point.

> Cross screen measurement | A slightly self-explanatory term — with cross-screen measurement users can track and measure video metrics across different devices, such as mobile, television, OOH, Connected TV, and desktop.

> Target Rating Point | This term is a metric for the percentage of the advertiser’s target audience that actually views its advertisements. These target audiences are the groups of customers most likely to purchase a company’s products and services and can be essential to a successful campaign.

A Similar Offering

We round out our TV media buying glossary with a type of advertising that is often confused for Connected TV advertising — Programmatic TV. And while it’s close in practice, it’s not the same thing.

> (updated) Programmatic TV | Programmatic advertising is a form of traditional TV advertising with a data-driven slant. Certain TV ad slots are made available for programmatic purchase, which is carried out by a DSP (Demand Side Platform). Because DSPs have audience data, they allow advertisers to better target viewers — thus resulting in automatic and efficient TV ad buying. An important distinction is these ads are NOT the same thing as Connected TV. You may see Programmatic TV incorrectly described as “CTV Programmatic” or “OTT Programmatic.” Understanding that these terms are actually describing Connected TV, and not traditional, is essential to becoming an educated advertiser in this landscape.

> Advanced TV | Refers to many forms of streaming TV content. This includes Connected TV and addressable TV but does not include any forms of TV not watched through a broadcast, cable, or satellite connection on a television.

> (updated) Addressable TV | With addressable TV ads, each household watching the same program will see different ads. Addressable TV advertising allows advertisers to use audience targeting and segmentation with each advertisement. Addressable advertising on TV is just like addressable digital advertising, as the ads can be served programmatically.

> SVOD | Subscription video on demand is a streaming video service that allows users to have unlimited access to a range of on-demand programs, all for a recurring subscription fee. Examples include Netflix and Hulu.

> AVOD | Advertising-based video on demand is a streaming video service that offers free on-demand programs in exchange for the inclusion of ad breaks. Examples include Fox Sports and Pluto TV.

> Multi-channel Video Programming Distributor (MVPD) | This term refers to any service provider that delivers video programming services, and usually includes cable, satellite, and broadcast.

And last but not least, here are some terms that don’t fall into a specific connected TV category, but are useful to know when attempting to navigate the CTV ecosystem.

> Co-viewing | Originally a traditional TV term, co-viewing is when multiple people are watching a program on the same device. This can sometimes make measuring impressions more difficult for advertisers.

> Linear TV | Linear TV is the same thing as traditional television viewing. Viewers can watch linear TV through cable or satellite services, or even through over-the-air broadcasts.

> Audience-based TV | In audience-based TV,  buyers use data from data-management platforms in order to target TV viewers.

> Bitrate | There are two kinds of bitrates, the encoded bitrate, and the available bitrate. In an encoded bitrate, the number of bits (or amount of data) per second that has been used to store a media signal is tracked. Available bitrates are the instantaneous delivery rate of data in bits per second, kilobits per second, megabits per second, etc. from the source server to the destination device through one or many digital networks. While available bitrate is used for technical purposes, encoded bitrates are more commonly used for business purposes. If you’re not a video person, chances are you won’t have to know too much about this.

Connected TV Definitions – The More You Know

CTV advertising is much more advanced than cable TV advertising, which is why businesses are rapidly shifting their ad budgets over to Connected TV platforms.

Now that you’re well-versed in Connected TV terms and acronyms, why stop there? Sign up for our Connected TV Report below, a bi-weekly rundown of the latest CTV news, viewership statistics and growth trends, as well as insights directly from MNTN.