Understanding CTV: Your Go-To Glossary for Streaming Metrics and Methodologies
Ever wonder how advertisers figure out if their streaming ads are hitting the mark? It's all about the numbers – and we're here to break down the jargon. In this blog, we're diving into the essential ABCs of streaming metrics and measurement methodologies for Connected TV (CTV) measurement.
Streaming TV has become the new normal, with more shows, movies, and ads popping up on your screens than ever before. But behind the scenes, there's a bunch of terms that advertisers use to figure out what's working and what's not. It might sound complicated, but stick with us — we're here to make it simple.
In this guide, we're taking a closer look at the key words and phrases that CTV advertisers rely on. Whether you're totally new or a bit of a pro, we're here to help you understand the numbers that really matter.
What CTV metrics are most popular?
In today’s landscape, CTV advertisers have a variety of metrics to choose from.
What metrics do marketers typically use? A survey by ANA revealed the following to be most popular.
While the survey looks at metrics across platforms, those in the top ranks are mostly universal — meaning they’re relevant across platforms, including CTV. Think of CPM, reach, and frequency, which are all industry staples in a CTV advertiser’s campaign strategy. As one survey taker put it best, “These KPIs are ubiquitous.”
What exactly do these metrics measure, and how can you best use them? Below, we’ve compiled a comprehensive glossary of the CTV metrics advertisers should understand and leverage.
What is it?
CTV attribution refers to measuring and assigning credit to (i.e., attributing) the impact of a particular CTV ad campaign on consumer behavior, including events like website visits or online purchases.
Historically, tracking and assigning credit to lower-funnel metrics like conversions has been a challenge. Imagine you’re an e-commerce advertiser. To increase purchases, you launch a web-based campaign. Users click on those banner ads, which take them to your site, where they can make a purchase. Using this data, it’s easy to tie the sale of your product to the user clicking on your banner ad.
How do I measure CTV attribution?
CTV attribution isn’t as straightforward, though. How do you tie a consumer’s purchase to an ad viewed on their smart TV? Fortunately, new technology allows advertisers to attribute lower-funnel metrics to their CTV campaigns. Here’s how the attribution model typically works.
- A person watches an ad on their connected TV platform.
- The platform identifies the household’s IP address exposed to the ad. A device graph maps out any other devices connected to the same IP address.
- Simultaneously, a pixel placed on the advertiser’s site detects the IP addresses of those that complete the action the ad intended — like making a purchase or visiting the site.
- The model matches the IP addresses from the device graph to the IP addresses from the pixel. This helps connect the dots between seeing the ad on a connected TV and visiting the site, making a purchase, or any other conversion. The IP matches are attributed and documented, showing that someone in that household took the desired action because they saw the CTV ad.
Last click versus multi-touch attribution
The examples above illustrate an attribution method called ‘last click attribution.’ Last click attribution is a single-touch attribution because it assigns 100% of the credit for a conversion to the last event recorded. But marketing is often talked about as a team sport, where multiple touchpoints across different channels help persuade a consumer down the path to purchase – like a soccer team passing the ball amongst each other to score a goal. Multi-touch attribution seeks to map out all the touchpoints for a given consumer – an activity that’s been made a whole lot more difficult due to the depreciation of third-party cookies – and assign fractional credit to each of those touchpoints.
Brand Lift Studies
What is it?
Brand lift studies compare survey responses from two sets of people: one set that has seen your ad and a control group that hasn't. By looking at how these two groups answer, marketers can measure the percent increase in the primary metric of a brand’s upper-funnel campaign and determine an ad’s impact on consumer perception. A brand lift test can help marketers measure the following metrics:
- Awareness: This metric measures how familiar people are with your brand. It might include questions about brand recognition and recall.
- Ad Recall: This focuses on how well people remember seeing or hearing your ad.
- Message Association: This metric assesses whether people associate specific messages or qualities with your brand after seeing the ad.
- Consideration: Measures the likelihood that people would consider your brand when making a purchase decision.
- Preference: This indicates whether your brand is preferred over competitors' brands.
- Purchase Intent: Measures how likely people are to buy from your brand.
How can CTV advertisers use brand lift studies?
In the digital world, marketers conduct surveys to collect the data necessary for brand lift studies. For instance, marketers may use survey ads, brand lift ads or discovery ads to capture audience responses. This interactive ad creative uses an HTML 5 format to create an interactive interface for users to respond to questions via a dropdown menu, checklist or any other interactive format.
Brand lift studies for connected TV are carried out in a similar fashion. The most noticeable difference is that viewers cannot respond via their TV — instead, most brand lift providers glean this information in various ways. One way is to have exposed panelists fill out a survey or form on a mobile app belonging to the company that developed the study. Another might be to track exposed users and catch them while they are surfing the web by gating access to content and requiring them to answer a brand survey to access the content.
Advertisers can then use the results to glean invaluable insights, from the impact of their CTV campaign on consumer perception to which channels and content are performing best. For instance, a marketer can discover which ad creative performs best or determine which demographic best resonates with the campaign.
What is it?
Completion rate measures the percentage of viewers who watch your ad all the way through. A high completion rate means that viewers are engaged with your content, whereas a low completion rate can signal a number of issues — such as the length of the video, alignment with the audience it’s reaching, or issues with the content itself.
Research shows connected TV often results in high completion rates. According to Statista, video completion rates on CTV average out to 97%.
CTV ads see high completion rates for several reasons.
- Viewers tend to watch CTV ads in full because they’re engaged with the surrounding video content. Unlike digital in-banner video ads, which run alongside content, or digital video ads, which can happen before, during or after short-form video and can sometimes be skipped, CTV ads run before and during the video content — meaning viewers are intent on watching the content that comes after the ad.
- High completion rates can also be attributed to the unique traits CTV brings to the table. Precise targeting, driven by data insights and advanced technology, ensures that ads displayed on Connected TV (CTV) are highly relevant to each viewer's interests. The use of personalized ads significantly increases viewer engagement and encourages them to watch CTV ads to completion.
- Another factor contributing to the high completion rates of CTV ads is the inherent "lean back" viewer experience. Unlike digital users who actively scroll through content and can easily skip ads with a simple swipe or clicking a “skip” button, TV viewers sit or “lean back” when consuming content.
How do I use it?
For CTV advertisers, measuring engagement is vital, and one of the primary metrics used for this purpose is video completion rate (VCR).
But while completion rate is a vital metric, advertisers should treat this metric as one piece of the bigger measurement puzzle. For instance, try adding lower-funnel metrics to truly measure engagement. As an interviewee in a survey by ANA put it best, “One needs to look at CPV in partnership with completion rate; these should be connected. They are a matched pair of KPIs. They are about both efficiency and exposure. Independently, they tell part of the story, but you get the full picture bringing them together.”
What is it?
This metric measures the percentage of viewers who take a desired action, such as visiting your website or making a purchase. But conversion rates can span a variety of events throughout the funnel — so it’s important to understand the difference between mid-funnel and lower-funnel conversion rates.
- Mid-funnel conversions refer to the actions taken by potential customers that indicate a higher level of interest and engagement with your brand or product but are not yet ready to make a final purchase decision. Mid-funnel conversion events include website visits, account creation, email subscriptions, starting a form, and adding to a wishlist or a cart. These conversions can be indicative of a strong intent to buy.
- Lower funnel conversion rates include form submissions, purchases, or any other action potential customers take close to making a final decision.
Can CTV drive conversions?
TV is notorious (in a good way) for its ability to boost upper-funnel metrics, such as reach and video completions. Think of big brand awareness campaigns for splashy events like the Super Bowl.
In recent years, advertisers have set their sights on middle and lower-funnel conversion events — and connected TV is no exception. Digital buyers, for instance, are accustomed to performance metrics. As they add connected TV to their media mix, they expect the same digital-style measurement to show the true impact of their campaigns.
Take Metro Vein Centers, a nationally accredited spider and varicose vein treatment center. A huge driver of their business includes online sign-ups, making site visits a key conversion event in their campaign strategy.
To improve conversions, Metro Vein Centers turned to Simulmedia’s TV+ platform to run a CTV campaign retargeting those who had recently visited the clinic’s site. By turning insights into optimizations, TV+ was able to retarget high-quality audiences with precision and convert over 26,000 viewers to unique site visitors. Better still, Metro Vein Centers was able to attribute their CTV campaign’s results to performance — all thanks to CTV’s digital measurement capabilities.
Cost per Acquisition (CPA)
What is it?
Cost per Acquisition (CPA), sometimes referred to as Cost per Action, measures the average cost required for a customer to complete a certain action. It tracks the total advertising expenditure divided by the number of conversions, where a conversion is a specific action taken by a viewer in response to an ad, such as making a purchase. In other words, CPA allows advertisers to assess the actual cost of achieving those conversions.
When do I use it?
CPA can be used when your campaign's primary objective is to drive specific user actions or conversions, such as leads or sales. It shifts the focus from mere ad views to actual results, making it an ideal choice for performance-driven campaigns.
Take Monster, a performance-oriented online employment solution. To compete against legacy brands and drive growth, the brand set its sights on lower-funnel, actionable metrics. Getting eyeballs in front of their ads was important, but persuading viewers to take action was even more critical.
To hit their performance goals, Monster aimed to optimize lower-funnel metrics, including Cost per Acquisition — specifically job applicants who had started their application. By focusing on Cost per Acquisition (CPA), Monster was able to assess the effectiveness of its campaign in terms of actual user actions or conversions, such as job applications, registrations, or job postings.
Cost per Thousand (CPM)
What is it?
CPM (cost per mille, Latin for one thousand) represents the cost of 1,000 advertisement impressions. Why 1,000? Due to the scale of most TV campaigns, grouping impressions in thousands simplifies the evaluation of impressions. An impression denotes an instance when a single user is exposed to an advertisement during a specific slot and time. Each subsequent exposure to the same ad counts as an additional impression.
In the connected TV (CTV) industry, CPM is commonly used as a pricing model to determine how much advertisers pay for their ads to be shown to one thousand viewers or impressions. CPM rates can vary widely depending on factors such as the popularity of the content, the time of day, the audience size, the competitiveness of the market, and more.
When do I use it?
CPM is particularly valuable when your primary goal is to increase brand awareness and visibility. If you want your ad seen by as many people as possible, CPM can help you understand the cost efficiency of achieving that objective. It’s important to note that CPM should be just one part of an advertiser’s measurement toolkit. CPM measures cost-efficiency, but it doesn’t necessarily measure quality or performance.
Price Points: Connected TV’s CPM is typically higher than that of linear. Compared to linear TV, CTV ad supply is still relatively scarce — driving up prices for advertisers.
Cost per Reach
What is it?
Cost per Reach measures the total cost to reach one individual or household that matches a marketer’s strategic audience target. It answers the question: “How much did it cost to reach one individual in my strategic audience?”
Advertisers can calculate Cost per Reach by dividing the total reach achieved by their total budget spend.
Why use it?
Typically, advertisers look at CPM to measure the price point of their advertising campaign. But there’s an issue here — CPM measures impressions. 50,000 impressions can be served to 50 people 1,000 times, or they can serve 50 thousand impressions to 50 thousand people.
So, in both scenarios, the advertiser sees they served 50 thousand impressions. Obviously, most marketers would rather serve 50,000 impressions to 50,000 unique viewers rather than serve 50 people an ad 1,000 times. That’s a significant amount of media wasted on over-frequency. So, cost per reach paints a clearer picture and ensures you're not overpaying for reaching your audience.
Let’s say the advertiser spent $1,000 to deliver fifty thousand CTV impressions. The CPM would be $20. Because of the powerful targeting capabilities inherent within DSPs, let’s say each unique viewer served an impression that belonged to that advertiser’s target audience, but each viewer actually saw the CTV ad five times. The advertiser’s reach was ten thousand viewers, and the cost per reach was 10 cents per unique viewer. Since we’re an industry that likes to think in thousands, the cost per mille reached is $100 (the cost to reach a thousand unique viewers in their target audience.)
This example underscores the importance of supplementing CPM analysis with metrics like cost per reach. By incorporating cost per reach into the evaluation of advertising campaigns, advertisers can gain a more accurate understanding of the actual cost required to connect with unique individuals or households in their target audience, regardless of how many times they may have seen the ad.
What is it?
Frequency is another key metric for CTV campaigns. This metric measures how often your ad is shown to the same viewer. A high frequency can be effective in building brand awareness, but it can also lead to ad fatigue if viewers see your ad too many times over a short period of time. Product launches and limited-time promotions are often good reasons to dial up frequency, but for most ad campaigns, whose primary purpose is to keep a brand top-of-mind each week, increasing weekly frequency is often not as effective as broadening reach.
When do I use it?
Frequency is top-of-mind for many advertisers, as it’s among the top challenges CTV advertisers face. There's a good reason for this — our own research shows that frequency has a large impact on viewer behavior.
- Seeing an ad once led to a 5.7% increase in likeliness to purchase
- Seeing an ad 6-10 times led to a 4.1% reduction in purchase intent (compared to those who saw the ad 2-5 times)
- Those who saw an ad 11 times or more were 4.2% less likely to convert (compared to those exposed 6-10 times)
With this in mind, it’s important for any CTV advertiser to keep frequency in mind throughout the campaign lifecycle. By examining frequency distribution, brands can optimize their campaigns and ensure they effectively reach their target audience without overexposure.
What is it?
Viewership behavior is rapidly evolving. Audiences once available on linear TV are making the switch to ad-free streaming. To reach these audiences, advertisers are adding connected TV to their media mix. Incremental reach measures the incremental impact of these CTV campaigns — or the net-new unduplicated viewers reached on connected TV above their linear or traditional TV campaigns.
Incremental reach is not only used in the context of cross-channel campaigns but also within the realm of complementary or extension buys. Here, incremental reach refers to the unduplicated reach of the complementary buy over the reach of the base buy.
Why is it important?
In today's era of fragmented and time-shifted TV viewing, brands are facing a challenge when it comes to ensuring that their advertisements reach their intended target audience effectively. With viewers spread across various platforms and devices, it's difficult for brands to determine whether all the consumers they want to reach have actually seen their ads.
While brands might be confident that their ads are reaching some consumers within their desired target audience, the uncertainty arises around whether they are reaching all those consumers equally or simply bombarding a small group of viewers with the same message repeatedly.
This is where the concept of incremental reach comes into play. When brands rely solely on a single platform or method to deliver their message, they run the risk of bombarding a smaller group of viewers with the same advertisement repeatedly. Worse, they risk not being able to reach certain parts of their target audience at all: for example, by advertising only on linear TV, they cannot reach cord-cutters and cord-nevers with their message. Of course, there are still plenty of households who primarily watch linear TV, so going in the opposite direction is valuable too.
By diversifying the platforms and campaign strategies used, brands can expand their reach to a larger portion of their desired target audience while avoiding the potential negative impact of overexposure.
What is it?
An impression refers to the number of times an ad is served to a user’s TV. It’s important to note that an impression in advertising only refers to the number of times an ad is served or displayed to an audience. The metric that assesses the likelihood of the ad being viewed by the user is known as "viewability," and the metric that assesses how many unique persons or households an ad was delivered to within the marketer’s target audience (regardless of frequency) is called “reach.”
When do I use it?
Impressions are a baseline metric for measuring campaign performance, and for good reason. For one, impressions are critical in achieving scale. Research by Innovid suggests that 100 million impressions is the standard for maximizing reach — take a look at the chart below.
Impressions not only measure the performance of ad campaigns but also the worth of ad inventory. This metric has become the preferred currency for transacting ad inventory in the digital advertising landscape, particularly in CTV. As consumer viewing habits continue to shift and the industry moves towards a more data-driven approach, impressions offer a more precise and efficient way to measure and optimize ad performance.
What is it?
At its most basic level, reach refers to the number of viewers in a specific target audience exposed to an ad in a given time frame. We can think of reach as a spectrum, where the term primarily falls into two categories: unique reach and total reach.
- Total reach represents the total number of times an ad has been shown to viewers falling within the brand’s target audience, regardless of whether the views are from the same household or individual. If a CTV ad is shown to the same household multiple times, each instance of the ad display will be counted in the total reach metric. A significant part of the CTV world is transacted through upfront/newfront and content buys, so it’s possible for an impression to be delivered to viewers outside of your target audience – and in this case, total reach and impression numbers will be different. In a programmatic auction-based world where every CTV impression is filtered by the target audience, total reach and impressions would converge (some impressions may, unfortunately, land on bots and fraud operations, which would depress your total reach number)
- Unique reach refers to the number of individual, non-duplicated households or viewers that have been exposed to an ad. If a CTV ad is shown to the same household multiple times, the unique reach will count that household only once. When the metric “reach” is used unmodified, it is often synonymous with unique reach.
When do I use it?
Reach is critical for upper-funnel activities (e.g., brand awareness, brand perception) and helps assess a campaign's effectiveness in reaching the desired target audience.
Reach is also critical in gauging the scale of a campaign. According to Innovid, the average campaign reach is just 13% of the 75 million available households with CTV devices — meaning the opportunity for advertisers to reach more households and scale their campaigns is huge. To gauge a CTV campaign’s ability to scale, advertisers can quantify the number of unique households each publisher reaches during a particular advertising campaign.
By comparing the unique households reached by different publishers, marketers can assess how each inventory source contributes to the diversity and scale of their advertising mix. Some publishers may excel at reaching a specific target audience, while others can provide broader exposure to a larger and more diverse viewer base.
While reach is important, it's important to remember this metric measures exposure — not impact. For example, an ad may reach a viewer, but they may also be multitasking during commercial breaks – scrolling on their phone while the TV ad plays in the background.
What is it?
Return on Ad Spend (ROAS) evaluates the financial performance and effectiveness of your CTV advertising campaigns. It involves analyzing the revenue generated or other desired outcomes in relation to the costs incurred for running CTV ads
It’s common to confuse ROI with ROAS. While similar, ROI measures the profit of ad spend per dollar, while ROAS measures the revenue generated by the ad spend.
Why measure ROAS on CTV?
ROAS is a key performance metric. Want to solidify your manager’s faith in your CTV strategy? Need to communicate the performance of your campaign to key stakeholders? Show them the value of your ad spend to get your message across.
While measuring performance on CTV has historically been a challenge, new attribution tracking technology has made it possible to tie estimated or actual revenue associated with site visits, purchases, and other conversions to a viewer’s exposure to a CTV ad — and ultimately determine a CTV campaign’s ROAS.
What is it?
Viewability measures whether an ad has had the chance to be seen by a viewer. In the digital world, it’s not uncommon for viewers to quickly scroll past a video ad — raising the question of whether it was actually “viewable.”
In the CTV world, this performance metric looks a little different. Viewers cannot scroll past video ads, making CTV a platform with inherent ad viewability. But DoubleVerify’s research proves CTV viewability is not without its challenges — the study found that 1 in 4 CTV platforms continue to play programming after the TV itself was turned off.
How do I measure viewability?
Measuring viewability on CTV is not without its challenges, but solutions do exist. Integral Ad Science, an ad verification platform, for instance, is currently accredited by the MRC to measure the viewability of video-tracked ads and impressions.
While the MRC and IAB currently set the standards for metrics like viewability, other thought leaders are creating their own standards. GroupM has launched an initiative to create new standards in streaming viewability, with companies like Disney, Paramount, and VIZIO committing to collaborate on a streamlined measurement framework.
DoubleVerify, another ad verification platform, has also launched its own solutions, including:
- Fully On-screen certification, which is a post-bid measurement solution accredited by the Media Rating Council (MRC).
- Fully On-Screen pre-bid targeting, which allows “CTV advertisers to target inventory from sources that have received DV’s Fully On-Screen Certification,” according to DoubleVerify.
Mastering the Metrics: Navigating the CTV Advertising Landscape
From completion rates to conversions to attribution and more, knowing the different metrics that matter most through the customer funnel is critical for any and all CTV advertisers. What’s important is that you clearly identify the goals of your CTV campaign – is it an awareness campaign to maximize reach or a performance campaign to drive action – and tie it to the corresponding metrics to measure how you’re tracking to those goals. With this knowledge in your wheelhouse, you’re ready to gauge the success of your next CTV campaign.
Success in advertising requires more than just knowledge — it demands the right tools. Enter Simulmedia's TV+® platform, a transformative solution that unleashes the true potential of CTV and OTT advertising. Equipped with advanced predictive technology, seamless integration across 250+ networks and publishers, and backed by a decade of industry experience, TV+ empowers advertisers to connect with their desired audiences effortlessly across all screens.
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