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The Facts - OTT vs. CTV advertising - What's the difference?

The words you’ll hear in advertising circles, again and again, are OTT and Connected TV (or CTV). So what exactly are they? These words are often used interchangeably, but that is incorrect. To keep it simple, OTT is the delivery mechanism for TV content online, usually streaming or video on demand, “over the top” of traditional providers. CTV is the actual divide used to watch TV content online, such as a smart TV, Roku, or gaming console. 

OTT subscriptions and CTV ownership are skyrocketing and are the next best opportunity for marketers. It is an opportunity to reach viewers in a highly targeted way and touch them across multiple devices. This gives them a chance to nuance the messaging across devices and along the journey and moves customers from the no-touch device of a TV to an actionable device. 

What is linear TV, and what is the difference?

Linear TV is the traditional way of watching TV, and wherein a viewer watches a program on the channel, it is presented at a scheduled time. You watch “The Voice” at its scheduled time each week. This is linear TV. 

Linear advertising refers to a schedule in which ads are scheduled for a specific time, so viewers must tune in to a particular show to see the ads. By comparison, non-linear advertising means creating demand and preference for your product by participating in the consumer’s life by following his habits. 

Another term you will hear is Advanced TV. This is all non-traditional TV and the umbrella term for OTT/ connected TV and Addressable TV.

CTV in advertising is skippable online advertising targeted to relevant programming and audience groups. CTV refers to any TV connected to the interest and access content beyond what is available by the regular cable providers. 

Why are so many viewers moving from traditional TV to CTV?

The growth in CTV viewing is exponential and continues to grow. Consumers are flocking to CTV after being tired of paying for channels they don’t watch, lack of choice in programming, and cable’s escalating costs. OTT content is served on the viewer’s schedule, which is very appealing and also offers a wide variety in programming, subscription costs, and on the whole, is more affordable. 

As more and more viewers convert to OTT, advertisers invest more and more of their budgets to these platforms. They are quite simple, following the audience. 

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Connected TV Advertising Basics to get you started today

Connected TV is here to stay. So it’s time to learn your Roku from your remote. This is a whole new world letting advertisers take advantage of precise targeting and tracking. So we know CTV is television content streamed over the internet vs. by satellite cable network or device. 

CTV advertising is purchasing ads that display over these internet-powered streaming devices and apps. The precise targeting it brings along with cross-device marketing makes it very popular.

Devices that can serve CTV content include your laptop, cell phone, Smart TV, Roku boxes, and Amazon Frie sticks. Even many game consoles can deliver d CTV content and ads. 

CTV ads are sold through automated software that maintains and tracks data while sending out the ad. Think about the algorithms that Facebook uses when sending content to you. You define your audience and choose whether to work with a tech company or buy your own. The ad is produced and shown per those specs.

Metrics include numerous data points like frequency of viewing, reach, the percentage of your target audience that sees it, CPP, or cost per point, which shows the cost using the gross rating point GRP).

With the big players /like Netflix, Amazon, and Hulu producing great scripted content, CTV is exploding. Add to its popularity with millennials, with 67 percent in a house relying solely on CTV for their TV entertainment. 

Ad quality and quantity on CTV are advantageous to advertisers because they’re getting better content and more relevant experiences. They also experiment with formats like animated or interactive ads. All of this leads up to an excellent completion rate for CTV ads. 

The metrics that advertisers can garner also help measure campaigns’ effectiveness beyond what was ever previously possible in TV, based on clicks, views, and conversions. And when the viewer logs into a mother device through google or Facebook, advertisers can target more precisely based on demographics, location, interests, and online behavior. 

With broader reach, all of this targeting can be more efficient than traditional TV campaigns, And the waste is significantly reduced. 

What are some limitations of advertising with OTT and CTV?

OTT advertising is not without challenges. The multitude of platforms and potential audience overlap makes it difficult for media buyers to make strategic decisions. The metrics and attribution of conversions across multiple devices can be very overwhelming. So the learning curve can be steep and costly. A good agency will have the necessary tools and understanding to launch you into CTV.

Why you must bring CTV advertising into your marketing mix now

In 2020, the nationwide lockdown during COVID-19 created a massive surge in OTT and CTV viewing. CTV viewing has risen from 2.7B hours during pre-pandemic to 3.9B hours within just a few weeks. That is an increase of 81% year over year. Liner TV has dropped while CTV remains stable. 

What is the future of video advertising?

You don’t need a crystal ball to understand that for now, OTT and CTV are the way of the future. The technology and tracking area still being played out, but it will continue to grow and morph and become more complex and targeted. Video advertising has come a long way since the three choices of ABC, NBS, and CBS of years ago. 

All signs point to the growth continuing, and any savvy marketer will want to jump in with both feet now. The time is now for brands to jump in to take advantage of the many new targeting options and engage with their new targeting options and expand that audience. 

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