Over the last decade, TV viewers have migrated en masse from traditional cable television to on-demand digital options. With this shift comes a new opportunity for advertisers to reach their target audiences through connected TV (CTV) and streaming platforms like Hulu, YouTube TV, and Sling.
Performance TV, particularly in the context of connected TV advertising, is a modern approach that blends the expansive brand awareness benefits of traditional TV advertising with the precise targeting and measurable outcomes of digital marketing.
In today’s article, we’ll dive into the nuances of performance TV and how businesses can leverage it to maximize their impact and drive results.
What are performance TV ads?
Performance TV ads are streamed on a connected TV device, such as a smart TV, streaming stick, or gaming console. For mobile users, these ads can also appear on non-CTV devices like laptops, tablets, and smartphones.
Since they’re presented to the end user through the platform on an individual basis, marketers can deliver targeted, measurable ads. Unlike traditional TV advertising, which is primarily focused on broad reach and brand awareness, performance TV emphasizes specific, measurable outcomes aligned with marketing goals and key performance indicators (KPIs).
When businesses take this kind of approach, they achieve a high level of precision in audience targeting based on demographics, interests, behaviors, and hyper-localized IP-based targeting.
Performance TV vs. connected TV
CTV advertising refers to the placement of ads on television content streamed over the internet, typically through devices like smart TVs, streaming boxes (e.g., Roku, Amazon Firestick), and gaming consoles.
Although this is strikingly similar to performance TV, the essence of CTV advertising lies in its purpose and delivery. CTV advertising encompasses a wide range of advertising types, including both performance-driven and brand-awareness campaigns. It is delivered during ad breaks in streaming content, similar to traditional TV commercials, but through internet-connected devices.
Performance TV, a subset of CTV advertising, is specifically focused on measurable, performance-based outcomes. It’s designed to achieve specific marketing goals and is heavily data-driven. Performance TV advertisers can continually optimize their campaigns based on performance data, adjusting targeting, creative elements, and spending to improve ROI.
Which platforms show performance TV ads?
Performance TV ads are typically shown within the ad breaks of streaming content on various Connected TV (CTV) platforms. These platforms include a wide array of digital streaming services and devices, offering a diverse range of opportunities for advertisers to reach their target audiences.
Key platforms where you might see performance TV ads include:
- Smart TVs — Ads can be shown on internet-enabled televisions that allow for streaming content directly without the need for an additional device.
- Streaming devices and boxes — Devices such as Roku, Amazon Fire TV, Apple TV, and Google Chromecast connect to TVs and provide access to streaming content.
- Gaming consoles — Consoles like Xbox and PlayStation that offer streaming services and apps.
- Streaming services and apps — You can integrate ads into the programming of various streaming services like Hulu, Netflix, and Amazon Prime Video.
- Ad-supported streaming channels — Channels that offer streaming content for free or at a reduced cost, supported by ad revenue.
The placement of these ads is typically managed through programmatic advertising platforms.
Programmatic ad buying uses algorithms and data analytics to place ads in the most effective slots, targeting the right audiences based on their viewing habits, demographics, and other relevant factors.
That way, the streaming ads reach viewers who are most likely to be interested in the products or services being advertised, thereby increasing the likelihood of achieving the desired performance outcomes.
How performance TV ad targeting works
Targeting audiences in performance TV advertising involves several sophisticated methods, primarily revolving around data collection and usage. The two main types of data — first-party and third-party data — each play a unique role in shaping how audiences are targeted. Businesses also use methods like IP targeting and device ID targeting to reach specific customers.
First-party data
First-party data is information collected directly by the advertiser or the company from their audience, customers, and users. This includes data gathered from their own websites, apps, CRM systems, social media interactions, customer feedback, and transaction histories.
First-party data is the most ideal because it’s accurate, reliable, and specific. By using data from their own customer base, advertisers can create highly personalized and relevant ads. And since this data is collected directly by the advertiser, it is typically more compliant with privacy regulations.
Third-party data
Third-party data is collected by an entity that does not have a direct relationship with the user the data is about. This data is often aggregated from various sources and can include a wide range of information like demographics, interests, purchasing behaviors, and more.
In performance TV, third-party data enables advertisers to reach beyond their existing customer base to target potential new customers who fit similar profiles. It also provides comprehensive segmentation options based on a wide array of behaviors and characteristics unavailable in first-party data.
IP Targeting
IP targeting is another method used in Performance TV advertising. It involves delivering ads to specific audiences based on their unique IP addresses.
There are two types of IP targeting:
- Geographic targeting — Ads can be targeted to specific locations, which is particularly useful for local businesses or region-specific campaigns.
- Household-level targeting — By identifying IP addresses, advertisers can target entire households, which is beneficial for products and services meant for family or household use.
Additional Targeting Methods
Besides these primary methods, Performance TV advertising also leverages other sophisticated targeting techniques, including:
- Behavioral targeting — Using online behavior patterns to target ads.
- Contextual targeting — Placing ads in streaming content that is contextually relevant to the ad material.
- Retargeting — Targeting users who have previously interacted with the brand but did not convert.
- Lookalike audiences — Targeting new users who resemble the advertiser’s existing customers.
Final thoughts
Performance TV advertising offers a powerful marketing tool businesses can use to reach their audience with highly targeted, data-driven ads. Its unique blend of traditional TV advertising and digital strategies provides a comprehensive solution for achieving measurable performance outcomes.
By leveraging advanced targeting methods, advertisers can ensure that their ads are delivered to the right audiences in the most effective manner possible. As technology continues to advance, performance TV advertising will undoubtedly evolve and become an even more integral part of the marketing landscape. So, businesses should stay updated with the latest trends and techniques to make the most out of this effective advertising platform.
