The advent of connected television has changed the way people view TV in general. Thanks to modern portable gadgets, users can view any program anywhere at any time. At home, they can get the best experience from watching their favorite movies on TV. But if it's more convenient, they can also view the same video content through their portable devices. With CTV advertising spending expected to rise to $25.5 billion by the end of 2025, TV advertising through Internet-connected devices remains the fastest growing digital advertising segment. . And it's not just in North America; CTV is also growing in the UK, Japan, Germany and France.
Different metrics are used to calculate ad campaign revenue in the connected TV space. Each of these indicators is important for evaluating a marketing strategy. When measuring the effectiveness of an ad campaign on connected TV, consider the following metrics:
Cost per thousand impressions (CPM; cost per thousand impressions). According to this metric, users do not have to <a href=https://www.bidmind.com/post/what-is-connected-tv">read more here</a click on the ad, it is enough that the ad appears somewhere on the web page where the user could potentially see it. CPM allows marketers to calculate the number of impressions of a single ad to a user.
Cost Per Complete View (CPCV). This is the ratio between the cost of an advertising campaign and the total number of completed ad views.
Video Completion Rate (VCR). This metric allows advertisers to determine the percentage of ad impressions that are fully viewed by a consumer. In connected TV, the VCR is quite high, ranging from 92 to 97. Accordingly, this can result in a lower CPCV (around $0.03) for distributors with high CPMs.
Reach . This is the number of households and individual consumers included in the advertising campaign. Keep in mind that a million impressions does not mean that an ad has been viewed by a million households or individuals.
Frequency . This is an average number measured by dividing the total number of ad impressions by the number of target audiences selected. For example, if a marketer shows 6,000 ads to 2,000 households (individuals), the frequency is 3.
Compared to the performance of video content, cost per click (CPC) is not significant in measuring the success of connected TV ads. This metric is mainly applicable for calculating the conversion of video content through mobile devices. For CTV, the best way to test the effectiveness of a campaign is CPCV.
Benefits of CTV Advertising
As consumers have shifted to smart TV platforms to get a better consumer experience, TV advertising has improved its development by taking advantage of CTV inventory. When you include connected TV in your marketing planning, you can reap the following benefits: