You’ve heard of CTV advertising. You’ve also heard the term OTT advertising thrown around. As an “up with the times” marketer, you know streaming platforms continue to gain momentum (even surpassing cable TV viewership according to Nielsen). But you might be a bit confused about why the terms CTV and OTT advertising are used interchangeably.
Though similar, CTV and OTT advertising have distinct meanings and implications. Stick with us and we’ll explain the distinctions between the two, why it’s important to know, and how CTV and OTT advertising can play an important role in your business’ customer acquisition strategy.
Let’s unravel the terminology.
Over-The-Top (OTT): refers to the digital content, such as music or video, delivered directly to viewers over the Internet, bypassing traditional distribution channels like cable or satellite providers.
Typically when we say ‘OTT’ we are referring to OTT platforms or publishers who provide the streaming content across OTT-enabled channels. OTT publishers offer a wide array of streaming services, and some OTT advertising examples include subscription video-on-demand (SVOD), ad-supported video-on-demand (AVOD), and transactional video-on-demand (TVOD) across a multitude of devices such as web, mobile, and CTV. Examples of popular OTT streaming services include Netflix, Hulu, Amazon Prime Video, and Disney+.
Connected TV (CTV): refers to the device itself on which you’re accessing streamed video content. Some examples of CTV devices are smart televisions (like LG or Samsung), streaming sticks (like Roku, Apple TV, Amazon Fire TV, or Google Chromecast), gaming consoles (like Xbox or Playstation), and some set-top boxes that are internet-enabled. CTV devices enable viewers to stream OTT content directly on their television screens.
Think of it this way: OTT is the “pipes” or the way video content is delivered. CTV is a popular device type where that video content is seen. Streaming video and music content can, therefore, be made available over-the-top (“OTT”) to Connected TVs (“CTV”), mobile phones, tablets, computers, and other internet-enabled devices for your viewing pleasure.
The industry throws the terms OTT advertising and CTV advertising interchangeably. But understanding the two is very important. OTT advertising refers to advertising on premium OTT streaming platforms (like YouTube or Hulu), whereas CTV advertising refers to programmatic advertising on multiple CTV environments (like Roku or Amazon Fire TV) through DSPs.
It’s important to know the differences between OTT and CTV advertising, so you can effectively reach your target audience, optimize your campaigns, maximize reach and engagement, and ultimately achieve your advertising objectives. Let’s take a closer look at what makes the two types of marketing methods unique:
Targeting Capabilities
Both CTV and OTT advertising allow for advanced targeting capabilities, giving advertisers the ability to deliver more personalized and relevant ads to viewers. The main difference here is that OTT advertising targets video content across devices, whether that’s a smartphone, computer or CTV, while CTV advertising will only be seen on the big screen.
Ad Formats and Creatives
Advertisers need to consider the format and creative elements of their ads when advertising on CTV or across OTT platforms. CTV typically offers a more traditional TV-like experience, which may be conducive to longer-form ads, such as 30-second commercials. On the other hand, when advertising with OTT platforms, publishers will typically give more flexibility in terms of ad formats. Think of YouTube, which often offers pre-roll, mid-roll and even interactive ad units. Just remember that a significant portion of OTT streaming service ad inventory is on CTV!
Pricing and Monetization Models
Advertisers should be aware of the pricing and monetization models associated with CTV and OTT advertising. CTV platforms often offer opportunities for programmatic advertising and targeted ad placements, which may affect pricing structures. OTT publishers, on the other hand, have different monetization models such as subscription-based services, ad-supported content, or a combination of both. Usually, streaming services are more likely to use a subscription model versus an ad-supported model. This means inventory on the premium streaming services are more limited and competitive for advertisers to run campaigns, often resulting in higher CPMs.
Measurement and Analytics
Understanding the difference between CTV and OTT is essential for accurate measurement and analytics of ad campaigns. Advertisers need to be aware of the metrics and tools available on each platform to assess the effectiveness of their campaigns. CTV and OTT advertising platforms often provide robust measurement capabilities, including viewability metrics, completion rates, and detailed audience insights. But it’s all up to the OTT publishers on what metrics they share, or whether they even have the measurement tools in place to track the data. On the other hand, when advertising on CTV devices, it’s up to the capabilities of the DSP or other media platform the advertiser is leveraging.
When comparing the two, it’s also important to note that due to fragmentation of the CTV landscape, it can often be difficult to get an accurate read on some of the metrics on CTV. Whereas OTT streaming services almost always require users to be logged in, allowing these platforms to better track ad performance across the various device types that their content runs on. OTT platforms may also offer additional metrics such as engagement, ad interaction rates, and attribution models.
As with any advertising channel, there are rewards and risks. Understanding both can help you decide which tactic is right for your business. Let’s first take a look at the benefits marketers might see by advertising via CTV devices or OTT platforms:
In the world of digital advertising, CTV and OTT are the newcomers. While they offer promise, it’s important to consider their challenges before committing all your resources to these advertising methods.
Here are three challenges you might face while running an OTT or CTV campaign:
Marketers should consider whether to focus on CTV or OTT based on their campaign objectives, target audience, and budget. Here are some scenarios where marketers should evaluate CTV and OTT options:
CTV and OTT are both an important part of the ever-changing and growing digital advertising landscape. By understanding the differences between the two, and aligning with your campaign objectives, you’ll be better prepared to reach your target audience and find your next best customers.
How can we help? Lotame’s technology combines the power of first-party data and third-party data targeting, giving marketers the scale and reach they need to maximize CTV advertising’s impact.
Brands can use our next-generation platform, Spherical, to enrich, model and activate first-party audiences on CTV inventory. Marketers can also use Lotame’s high-quality data to engage the audiences they want to target via their DSP of choice. All of Lotame’s custom and 5,000+ prepackaged audiences — demo, interest, intent, and CTV viewership (US only) — are targetable on over 50 CTV and OTT media channels globally.
Publishers with video content can also benefit from expanding monetization to CTV. Spherical makes it fast and easy to open up this always-on revenue stream via the Spherical platform.
Is your business ready to get started with CTV advertising? Learn more about how Lotame can help you get Data Empowered with Connected TV and OTT.