Technology has changed how we view programming previously available only over broadcast networks and cable. It has allowed us to sever ties with cable companies and instead pick and choose our content providers. Today, viewers can use their computers, phones, and televisions to watch a wide variety of movies, shows, and video content via OTT and CTV.
OTT and CTV share many similarities. Technically, CTV is a subset of OTT. While OTT is content streamed via the internet, CTV refers to televisions or the devices connected to them that enable viewers to watch streamed programming on TV. Both OTT and CTV have proven highly successful for the many businesses that advertise on them:
- Consumers are 2x more likely to buy a product they saw advertised on CTV than those who view traditional television ads.
- 72% of viewers reported that they could remember specific OTT ads they saw, showing the tremendous ad recall of OTT.
The industry is still growing rapidly, and some trends are emerging. While it has been prevalent in the U.S., OTT, and CTV are now rising in popularity across the globe. More advanced contextual targeting tools enable cookieless targeting that protects consumers' personally identifiable data while providing relevant content.
Increasingly sophisticated content testing tools provide audience responses to video content, allowing for optimization to maximize impact based on emotional impact, purchase intent, and other criteria.
So, what is the difference between OTT vs CTV advertising? Let's look a little deeper.
What Is OTT?
OTT or over-the-top is a term used to describe any programming viewable by means other than cable or broadcast. It originated decades ago when set-top boxes were required for cable channels; thus, over-the-top meant that programming circumvented the cable box. It is really an unnecessary term these days, as it has been replaced in modern vernacular with streaming.
OTT devices are those that stream digital content, like:
- Smart TVs
- Gaming consoles
- Amazon Fire, Apple TV, Roku, Chromecast, and other HDMI devices
- Smart Blue-ray players
What Is CTV?
Connected TV or CTV is a subcategory of OTT. They aren't competing technologies, as CTV couldn't exist without OTT. Connected TV refers to internet-connected televisions. No streaming service is required to view content. However, most video content not on a premium subscription will require the viewer to watch non-skippable ads.
Advantages of Advertising on OTT and CTV
Though they aren't that different, you can pinpoint some distinct advantages of advertising on each.
CTV advantages include:
- Since ads cannot be skipped, campaigns will result in higher view rates.
- CTV provides superior audience targeting that presents your campaign to an engaged audience more likely to be interested in your products or services.
- Traditional and digital methods can measure the results.
- Millennials and GenZ, valuable target demographics for advertisers, make up a large contingent of those who have never had a cable subscription.
OTT advantages include:
- Superior reach, with a projected 197.7 million monthly users by the end of 2022.
- Subscription customers generate almost twice the ad revenue per user than ad-supported streaming services.
- Enhanced data analysis allows for more accurate targeting.
- It is cost-efficient.
- It is increasingly attractive to those who want the ability to choose where, when, and how they view programming.
What Marketing Executives Should Know
There are some common misconceptions that marketing execs should be wary of falling for. It's helpful to understand not only that these are misrepresentations or falsehoods but to understand what is behind them.
One myth is that cookies are a problem for CTV ads. Since the standard web technology doesn't work on CTV, it isn't a problem. However, IP addresses are used and are in jeopardy of going the way of cookies. Privacy laws are a compelling reason that advertisers should leverage contextual targeting rather than relying on IP addresses.
Another misconception is that CTV ads aren't sold programmatically. The truth is that streaming ads on Amazon, Roku, and FuboTV are sold programmatically first to private buyers and then on the programmatic open auction.
A fallacy surrounding streaming content is that those over 55 don't subscribe to it. In reality, 56% of Americans 55 and up have already cut the cord in favor of streaming services. Also, don't be misled into believing that people only view subscription services without commercials. The desire for more budget-friendly content prompts 55% of those who stream to watch ad-supported services.
Navigating OTT/CTV Advertising
With the swift evolution of technology and rapidly emerging trends, it can be difficult for marketers to keep up. The most effective way to increase the effectiveness of your ad campaigns is with a digital advertising partner who has the technology and expertise to help you get the highest ROI from your ad spend.