The Growth of Connected TV

Dmitrii Sidorov

Dmitrii Sidorov

Head of Media & Entertainment Technologies

Media & Entertainment
May 5, 2022
8 minutes to read
  1. What is a CTV?
  2. How is CTV better than traditional TV?
  3. What are the challenges in launching Connected/Smart TV apps?
  4. Looking to get started?

The adoption of Connected TV (CTV) is surpassing that of traditional or Linear TV with each passing day. Approximately 83% of the households in the US are already using this technology, which indicates the importance and dominance of CTV across the world. Having penetrated the market, CTVs give us an immense potential for advertising. Before we delve into the advertising aspect, let’s first understand more about CTVs.

What is a CTV?

Connected or Smart TVs are devices that use the Internet to enable the streaming of videos like Amazon Fire or Netflix. Gaming consoles and streaming devices like Roku also fall under this category. Here is a shortlist of devices that qualify as a CTV device:

  • Android TV,
  • Apple TV,
  • Roku,
  • Amazon Fire TV,
  • Samsung TV (Tizen OS),
  • LG TV (WebOS),
  • Xbox,
  • Playstation,
  • Google Chromecast, and so on.

The beauty of CTVs is that they support high quality and digital format consumption on demand, which can be tracked very minutely to push relevant content and advertisement to the viewers. The COVID-19 pandemic has spurred the adoption of these devices. As a result, marketers are pumping in money to get viewers' attention in a more scientific way than ever before. No wonder it is called the future of TV.

CTVs also reduce the friction between content consumption across various devices and the advertiser. A viewer can now seamlessly switch between a TV, tablet, phone, or gaming console using a single ID.

How is CTV better than traditional TV?

US Connected TV Ad Spending, 2019-2024

CTVs are beneficial to end-users and advertisers alike. Let's look at some of the benefits below.

1. On-demand content consumption One of the major benefits of a CTV is that end-users can consume content on demand at a convenient time. This ensures their complete attention. Content can also be paused and saved for consumption at a later stage, which gives people complete flexibility in terms of when to watch. Thus, advertisers can grab their attention and target ads based on various parameters (time of the day, type of content consumed, location, device, age, gender, etc.). All this helps to serve more accurate and relevant advertisements.

2. Cross-device compatibility Since the content consumption can easily be shifted from one device to another using a single ID, it provides a seamless experience to end-users. Many networks also provide iOS and Android applications that allow users to switch from a CTV to a smartphone. Thus, you can consume the same content on the go. The second screen function is also important for CTVs, as approximately 65% of viewers prefer watching advertisements on a bigger screen. This provides the advertisers with more data about the users and, in turn, allows for more targeted ads across various devices at different times of the day.

3. Content for every member of a family Another important aspect of CTVs is that the entire family has access to the type of content relevant to them. A child wants to watch a cartoon show, an adult would rather watch a horror/suspense show, etc. CTVs allow advertisers to understand the demography of the user watching the show and offer specific ads. So, no more irrelevant or embarrassing ads for the entire family. Advertisers can now choose whom to target thereby optimizing their advertising budget.

4. Precise tracking of ads CTVs are a powerhouse of data for advertisers. They have access to such analytics as the number of ads viewed, how much of the ad was viewed, any call-to-action submitted by the end-user, what time of the day and week the ads were viewed, and so on. Using analytics, advertisers or marketers can fine-tune their messaging or ads for the users and make them more effective.

What are the challenges in launching Connected/Smart TV apps?

Smart-TV Market Size

Smart TVs present a plethora of opportunities. However, they also bring along certain challenges. Let's discuss some of them here.

1. Fragmentation

One of the biggest challenges in Smart TVs is the fragmentation due to various TV manufacturers, operating systems, versions, etc. If we just look at the operating systems and the devices, the headache is quite apparent — Apple TV, Android TV, Fire TV, Roku, Samsung TV, LG TV, Vewd, Playstation, Nintendo Switch, Xbox, Chromecast! Each of these has various versions of operating systems to be looked into and supported. This makes creating a streaming app for Smart TVs challenging and also results in many streaming players choosing to support only a handful of these devices. Version updates are another nightmare that a streaming company has to consider before delving into it.

In addition, it’s not just about supporting these platforms but also about providing a homogeneous user experience. The look and feel of each app on these operating systems and devices should be similar, if not identical. The feature li