The CTV audience is growing, making it an attractive arena for user acquisition. Programmatic engagement allows applications to reach large audiences with both first-party and third-party data.
There are four main monetization models we can identify in the CTV ecosystem.
1 - Subscription Video on Demand (SVOD)
The most commonly used model, Subscription Video on Demand, requires users to pay a monthly or annual subscription fee to gain access to content. This is the model used by Netflix, Amazon Prime, and Disney+.
2 - Advertising-Based Video on Demand (AVOD)
This model uses pre-roll, mid-roll, or post-roll ads integrated into the content. Publishers may also use banners, sponsorships, and paid placements to fund their business instead of relying on recurring subscription fees.
3 - Transactional Video on Demand (TVOD)
This emerging monetization model focuses on generating revenue from individual pieces of content by charging for individual episodes, movies, or pay-per-view events.
TVOD focuses on providing premium and hyper-exclusive content that can't be found anywhere else.
4 - Hybrid Model
Streaming services are experimenting with revenue models, and many are using a hybrid model, which is a combination of two or more monetization models.
For example, Hulu offers a base plan with ads, an ad-free plan, and a bundle that includes Disney+, ESPN+, and Live TV.
What Are the Benefits of Connected TV for Advertisers?
Unlike traditional television, CTV allows advertisers to reach audiences based on demographics, interests, context, time of day, device, and geography.
While traditional television relies heavily on estimates, CTV audiences are highly engaged and valuable to advertisers, making smart targeting crucial for success in this medium.
Advertisers have more control over where their ads appear. Combining more specific targeting with an enhanced ad buying system that allows advertisers to show their ads in the right place at the right time reduces the chance of random or inappropriate ad placements.
Measurement and Engagement
With CTV, advertisers can measure the effectiveness of their ad campaigns across devices based on a wealth of collected data. With cross-device data, they can measure ROAS, understand what works, and optimize future campaigns based on past experiences.
Advertisers can also use deep linking technology to create contextually relevant customer experiences. By incorporating deep-link-driven links and QR codes, brands can run CTV mobile app campaigns that direct users to the right content within their app.