Connected TV (CTV) advertising is the selling of ads on televisions that are connected to the internet: on the smart TV's home screen, and in the ad breaks of streaming apps and free streaming channels. A smart TV, or an ordinary TV with a streaming stick plugged in, is called a connected TV. Because it is online, its ad space can be bought like web ads, through the same automatic auctions.
Two kinds of seller offer CTV ad space. The first is the TV maker. Its smart TV operating system shows a home screen, the first screen you see when you switch the TV on. The home screen has a large banner, which the TV maker sells to advertisers. The second kind of seller is the streaming service, which sells the ad breaks inside its shows and live matches. Some free channels play a fixed schedule over the internet, like ordinary TV. They are called FAST channels, and they earn only from such ad breaks.
Here is a typical case. During an IPL match, a family in Hyderabad watches a streaming app on their smart TV. At the end of an over, the app reaches a 30-second ad break. On a TV, the ads are usually stitched into the video stream on the streaming service's server, so that the break plays smoothly. This is called server-side ad insertion (SSAI). Just before the break, the server asks a supply-side platform (SSP), the seller's software, to fill the 30 seconds. The SSP offers the slots to the buyers' bidding software in an auction. A car maker wins the first 10-second slot with a bid for viewers in Hyderabad. A biscuit brand wins the next 20 seconds. A family in Delhi watching the same match may see different ads in the same break.
CTV ads usually cost more than phone ads. They play on a large screen, often in front of several people, and viewers usually cannot skip them. They are priced per thousand impressions, or showings, as explained in impressions and CPM. But one TV showing may be seen by a whole family. So advertisers also want to know how many people were watching. That number comes from audience measurement, which counts the viewers of each show.
CTV is growing in India, as more homes buy smart TVs and as cricket and other live sport are streamed. The largest CTV ad market, however, is the United States. There, smart TV makers and streaming device companies earn a large part of their income from home-screen ads and ad breaks.