Connected TV Definitions. A new set of terms for a new type of channel

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1 Connected TV Definitions A new set of terms for a new type of channel

2 RTB, CTV, OTT, GRP, FEP, SSP This industry never stops with the jargon. We get it it s confusing. It s especially confusing when you re being introduced to an emerging channel like Connected TV (CTV). You re not alone; CTV is a new experience for everyone. For consumers, it s a different way to watch television content on the big screen no cable subscription required. For advertisers, it s an innovative way to reach a unique audience. Regardless of your current perspective, this booklet will help you become familiar with fundamental terms and definitions. First we ll explore CTV from the perspective of its new viewers. This will help put you, as an advertiser, in the mindset of the audience you re trying to reach as you plan CTV campaigns. Then we ll look at CTV from the perspective of digital media buyers. This section covers some key television measurement metrics that digital buyers will want to keep in mind as they set campaign goals. Finally we ll focus on CTV from the perspective of traditional TV buyers, by looking at a few important digital and programmatic terms. These concepts are becoming increasingly significant as CTV inventory becomes available through programmatic pipes. By the end of this booklet, you ll be able to confidently explain CTV (the channel and the acronym) to your coworkers and even your mom. So let s dive in. Table of Contents Connected TV Overview...3 The CTV Consumer Experience CTV for Digital Buyers CTV for Traditional TV Buyers Test Your CTV Comprehension

3 CTV Overview Connected TV (CTV) Advertising CTV advertising refers to the process of serving digital video on an internet-enabled television during TV content, giving viewers an experience that s similar to watching a traditional TV commercial. A brand could serve you a video ad while you re live streaming the soccer match of the century from the TV in your kitchen. Or while you re binge-watching six seasons of your favorite show from the big screen in your living room (hibernation time, anyone?). We won t judge you for what you re watching the point is that you re able to watch TV how and when you want. 2 3

4 The CTV Consumer Experience Connected TV Devices Consumers are watching TV everywhere. When it s on the big screen, it s Connected TV. But there are also ways to watch TV-like content outside of the living room. Let s discuss the difference. 64% of people in the U.S. own a Connected TV device* When you only buy traditional TV, you re missing out on a significant audience. CTV Devices CTV devices connect your TV screen to the internet, whether by stick, fire stick, dongle, hockey puck, gaming cube, or even a connection built into the TV itself. Regardless of the specific make and model, these devices connect to all kinds of premium content without a cable subscription, allowing cord cutters and streamers to either replace or supplement their traditional cable bundle. Streaming Device Under the CTV device umbrella, streaming device specifically refers to those sticks, dongles, and cubes we mentioned earlier. Through them, media is sent from the internet to your home television in a continuous stream, meaning that, as long as your internet connection is not disrupted, you don t need to wait for an entire TV show or movie to download before hitting play. Other Devices Smart TV Also under the CTV device umbrella, a smart TV is a television with a built-in connection to the internet and your favorite TV content. Your television comes smart just as it is no sticks or dongles required. Want to browse the web on a really, really ridiculously big screen? You re in luck. Many smart TVs also offer web browsers or even apps that allow you to access your favorite social media platform. Consumers are watching TV on all sorts of screens, including mobile phones, tablets, desktops, and laptops. We count these as other devices, and consumers use them all the time for all kinds of reasons. Maybe your phone is how you stream the latest episode of the most popular fantasy TV show on the planet, just to avoid hearing any spoilers at work. Or maybe you only use your phone to watch shortform content, like local news stories or how-to tutorials. You can use your phone or your laptop or your tablet for a ton of things, including streaming premium television content (and avoiding spoilers). Doing so, however, doesn t count as CTV that s reserved for the big screen. *Source: Edison Research and Triton Digital, The Infinite Dial 2017, March 9,

5 The CTV Consumer Experience Connected TV Content & Inventory What actually constitutes Connected TV content? We re glad you asked. CTV inventory is premium, professionally produced television content. It's not the banner display ads that sometimes appear on CTV devices. 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 minutes with commercial breaks in between. FEP content is inclusive of things like your daily dose of news, cult classics, stand-up comedy, cooking shows, or even your favorite soap opera. Over-the-Top (OTT) Over-the-top (OTT) content goes over your cable box to give you access to TV content. In other words, it delivers content using an internet connection as opposed to a cable or broadcast provider. While traditional TV distributors may be cut out of the equation when this happens, many are adapting by offering their own OTT services or apps. LIVE TV 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. This means you won t have to miss a single second of the big game, even if your big game is puppies battling over a football-shaped chew toy. More people now use streaming video services than have a cable subscription. 67% of total respondents and 77% of millennials watch streaming services. Source: Fluent LLC, Streaming Survey, May 30, 2017 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. To give viewers the choices they crave, many content providers offer both live streaming and VOD. 6 7

6 CTV for Digital Buyers TV Measurement Metrics For all of you digital media buyers getting into TV for the first time, here are some measurement metrics you ll want to be familiar with. Reach Reach is the number of unique people that will be exposed to your advertisement. Think of CTV as your go-to branding channel. As with traditional television, you generally want to maximize the number of unique people you are reaching on a CTV campaign. 3X 5X 1X 3X 4X 2X 2X 3X 5X 3X Reach is often shown as a percentage of a specific audience; for example, 75 percent of year-olds. It indicates the percentage of the targeted population that has seen at least one TV spot. FREQUENCY: The average number of times you re delivering an ad to a given person. GRP (Gross Rating Point) Gross Rating Points (GRPs) have been around since before the internet even existed. GRP is used to determine how many people within an advertiser s target audience saw the ad. The simplest way to break this down is with an 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. You decide to purchase four commercial spots while the game airs. Wait, but how does that translate to GRP? There s a formula you can use: GRP = REACH (%) x AVG. FREQUENCY (#) x 100 Since you are reaching 30 percent of your target audience and serving them roughly four ads each, this would get you to a GRP of 120. CPP (Cost-per-Point) We promise that cost-per-point (CPP) is going to sound really simple now that you understand reach, frequency, and GRP. 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. Cost per point. Straightforward, right? CPP = TOTAL MEDIA COST ($) GRP Think of CPP as a quick way to measure how well, for the price, your ads reach your desired audience. That s it! REACH: The number of unique people that will be exposed to your advertisement. Example GRP Audience Reached (example: 30%) Frequency Reach and frequency are closely related metrics. Just because you delivered one million impressions doesn t mean that one million unique people viewed your ad. Usually, some of those impressions were served to the same person. Knowing the frequency at which your ads were served can help you keep the same ad from showing up too many times. Nobody and we mean nobody wants to see the same fifteen-second video ad over and over again. Let s break it down. Frequency is the average number of times you re delivering an ad to a given person. Here s an easy formula: FREQUENCY = IMPRESSIONS REACH In other words, frequency is equal to the total number of impressions divided by the number of unique people who saw your ad. So, if you deliver 3,000 ads to 1,000 unique people (your reach), your frequency is three. Target Audience (example: Males, 18-34) 4X 4X 4X 4X Frequency (example: 4 ads) CALCULATING GRP 120 = 30% x 4 x

7 CTV for Traditional TV Buyers Digital Media Mechanics And for all of you traditional TV buyers just starting to familiarize yourself with Connected TV and digital media, here are a few things you should know. AD BUYERS The Programmatic Auction SSP SSP (Supply-Side Platform) Oh, great. Another ad tech acronym!? Don t worry this one s easy, too! Supply-side platforms (SSPs) are the software platforms that publishers use to make their ad spots available programmatically. A single SSP may work with hundreds of thousands of publishers, allowing all of them to sit back and let real-time auctions do the work. Publishers no longer need to negotiate deals with buyers on a one-by-one basis. In the CTV world, SSPs are still in their early days. But the ones that exist make it so much easier for buyers to access CTV inventory across dozens of premium networks and publishers all at once. And SSPs are making it easier for CTV inventory sources to make the jump to programmatic. It s a win-win. $ $$$ $$ Programmatic There is so much hype around programmatic. You may be thinking that this term sounds scary and complex at first, but it s not! Programmatic means that buyers are using software to automate the purchase of ads. It typically involves a real-time auction where multiple buyers are bidding on the same impression. Based on targeting parameters and campaign goals, buyers decide when and at what CPM to bid. The highest bid wins the ad slot. AUCTION AD This process contrasts with traditional buying, which involves budget commitments, agreed-upon CPMs, paperwork, and insertion orders. Traditionally bought ads generally don t run in real time. With programmatic, you don t have to commit to a single television network or a large upfront cost. You decide what spots you want to bid on and what CPM you want to pay for them. You re also increasing your efficiency and reducing human error by automating what you would have had to do manually. Now what s scary about that?! Private Marketplace / Private Auction Private marketplaces, sometimes known as private auctions, are a type of programmatic buying. Wait, there are multiple types of programmatic buying? Yes, but the definition of this one is in its name! Instead of an open auction that is available to all buyers, private marketplaces function as selective auctions, where only a few buyers are invited. Generally, vendors may sell their more premium inventory in a private auction, giving buyers greater control over the exact spot they re getting. For buyers and sellers who are used to writing insertion orders and working with publishers directly, private marketplaces are a nice stepping stone into the world of programmatic buying. For an emerging channel like CTV, private marketplace buying has really taken off as the way to purchase inventory in a programmatic fashion. Deal ID Now that you ve been briefed on private marketplaces, deal IDs are simple! A deal ID is just the unique identifier exchanged between a buyer and a seller that enables the buyer to bid in a private auction. Deal IDs hold the terms under which the private auction can take place, such as the agreed-upon minimum CPM, the ad spot, and maybe some basic targeting parameters. It s really just the automated version of an insertion order. DEAL ID DEAL ID The Private Auction DEAL ID 10 11

8 Fill in the Blanks 1. An aggregates premium inventory from a bunch of different publishers and TV networks, making it easy for me to scale my CTV campaign. Test your CTV Comprehension 2. As someone who is always on the go, I prefer content because I can watch it on my own time. 3. I want to reach consumers on the big screen and only the big screen. This means I ll focus my impressions on. 4. For my branding campaign, I don t want to oversaturate my audience with too many ads. I ll keep my low so I can maximize reach. 5. I set up a custom private marketplace deal for my CTV campaign so I could focus my ads on sports content. This deal has a unique associated with it. Now that you have a solid understanding of CTV consumers, measurement metrics, and digital mechanics, you re ready to start planning your campaigns. But first, let s put some of your knowledge to the test. Instructions: Complete the sentences on the next page by filling in the blanks with the correct terms and acronyms from the word bank at the bottom of this page. As you plan your CTV campaigns and imagine the type of viewer you re trying to reach, these are topics you may be thinking through. So let s get started! GRP SSP FREQUENCY DEAL ID 6. If 20% of my target audience of adults is exposed to my brand s ad spot four times, my is I need to know as soon as possible which puppy will come out on top, so I ll be the big game. 8. We cut our cable subscription months ago! We re still watching all of our favorite shows, but now we re accessing content through our internetenabled television. CTV DEVICES LIVE STREAMING OTT VOD Answers: 1. SSP, 2. VOD, 3. CTV Devices, 4. Frequency, 5. Deal ID, 6. GRP, 7. Live Streaming, 8. OTT 12 13

9 If you re interested in running CTV inventory, contact your account manager. The Trade Desk has the content and inventory you need to reach viewers across all CTV devices.

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