How DRTV is reshaping CTV

Connected TV (CTV) is increasingly aligning with direct response (DR) pricing models as the advertising landscape evolves. This convergence is due to several factors:

  1. Direct Response Buying Methods

Programmatic advertising has obviously been around for a while in digital and how many agencies and advertisers have purchased CTV.  That being said, the digital space has always overpriced their inventory, even programmatically.  This has made it difficult for many advertisers to be profitable in the space. Direct Response television experts have continued to push on these archaic digital pricing models with CPMs over $45.  In some cases, the agencies would make you feel like you are getting a “deal” when the CPM is $20. Direct Response experts are changing the way CTV is priced, and this has led to much more efficient CPMs (sub $8) which is leading to more profitable client campaigns.

  1. Improved Measurement and Analytics

Historically, CTV advertising lacked the precision of digital advertising when it came to tracking user actions. However, advancements in measurement and analytics have changed this. By leveraging data from various sources, including set-top boxes, streaming services, and connected devices, advertisers can track not only impressions but also actions like clicks, website visits, and purchases. This allows CTV to move closer to DR pricing models, where advertisers pay based on direct outcomes rather than just exposure.

  1. Advanced Attribution Models

With the rise of cross-platform tracking, CTV advertisers can better attribute actions back to specific TV ad exposures. This allows them to justify paying based on direct responses, similar to how performance-based digital channels (like social media or search) work. CTV now uses sophisticated attribution models, such as last-click or multi-touch attribution, to measure the effectiveness of ads in driving measurable consumer behavior.

  1. Targeted Advertising

CTV platforms offer increasingly sophisticated targeting capabilities, allowing advertisers to reach specific audience segments based on data such as interests, behaviors, and demographic information. This enables DR advertisers to refine their targeting and reach high-intent viewers who are more likely to respond, thus aligning CTV with DR pricing models, which are driven by conversions and actions.

  1.  Integration with E-commerce and Conversion Tools

Another shift is the integration of CTV with e-commerce platforms and direct response tools. With shoppable ads, QR codes, and integrated “buy now” features, CTV has become more direct response-friendly. Viewers can take immediate action from the ad, such as making a purchase or signing up for a service, which makes CTV ads more measurable and thus more compatible with DR pricing structures.

  1. Better Integration with Data and CRM Systems

Advertisers can now integrate their CTV campaigns with customer relationship management (CRM) and other data platforms. This integration helps advertisers link TV viewing behavior to customer purchase data, enabling more accurate reporting on how CTV ads lead to sales or other direct actions. This data-driven approach supports DR pricing by directly correlating ad spend to measurable outcomes.

Conclusion

CTV’s growth in direct response pricing is due to the commitment from the direct response community to continue to negotiate CPMs and performance.  In addition, the increasing ability to measure and track consumer behavior, sophisticated targeting options, and integration with programmatic buying and e-commerce tools continues to advance the success. As a result, CTV is becoming more attractive for direct response advertisers who require performance-based pricing, helping the medium catch up to the digital advertising standards set by channels like social media and search.

Curious about CTV and whether it’s the right fit for your business? Reach out to us today! We would love to help you explore the possibilities.