Over-the-top (OTT) and connected TV (CTV) advertising are two hot topics in the world of video advertising. It’s no secret that more people are streaming now than ever before. Connected TV is one of the biggest opportunities in advertising today. Here’s a look at the key differences between these two types of video advertising:
What is OTT?
OTT is defined as any delivery of audio or video content over the internet without requiring users to subscribe to a traditional cable or satellite pay-TV service. This means that OTT services are delivered through apps and websites on devices like:
- Smart TVs
- Gaming consoles
- Streaming media players
- Mobile devices
For example, Sling TV is an OTT service that delivers live and on-demand TV programming. Other popular OTT services include Netflix, Hulu, and Amazon Video.
What is CTV?
CTV is a type of OTT that refers to the delivery of video content to a connected TV. A connected TV is a television that’s been enabled with internet connectivity, either through built-in Wi-Fi or via an external device like a gaming console, streaming media player, or set-top box.
CTV offers advertisers a number of benefits, including:
- A more engaged audience: CTV viewers are typically more engaged with the content they’re watching than traditional TV viewers. This means that they’re more likely to pay attention to the ads they see.
- Better targeting: CTV platforms offer better targeting options than traditional TV, which allows advertisers to reach their target audiences more effectively.
- Increased control: CTV platforms give advertisers more control over the ad experience, including the ability to choose where and when their ads are seen.
OTT/CTV advertising consists of video ads that are served through OTT/CTV platforms like Sling TV, Netflix, Hulu, and Amazon Video. These ads can be targeted to specific audiences and delivered in a variety of formats, including:
- Pre-Roll: Pre-roll ads are served before the video content begins. They typically last between 15 and 30 seconds.
- Mid-Roll: Mid-roll ads are served in the middle of the video content. They typically last between 30 seconds and two minutes.
- Post-Roll: Post-roll ads are served after the video content ends. They typically last between 15 and 30 seconds.
The main benefit to these ads is that they can be targeted to specific audiences. For example, an advertiser could target Sling TV viewers who are interested in live sports programming.
Since OTT/CTV platforms offer better targeting and control than traditional TV, they’re an attractive option for advertisers. However, it’s important to note that OTT/CTV advertising is still in its early stages, which means there are some challenges that need to be addressed, including ad fraud and viewability.
OTT/CTV advertising can be delivered in a variety of ad formats, including:
- Video Ads: Video ads are the most common type of OTT/CTV ad. Video ads can be delivered in various formats, including pre-roll, mid-roll, and post-roll.
- Display Ads: Display ads are static images that are served alongside the video content. Typically, they cover the entire screen.
- Overlay Ads: Overlay ads are semi-transparent overlay ads that are served on top of the video content.
- Companion Ads: Companion ads are static or rich media ads that are served alongside the video content.
- Polls and Surveys: Polls and surveys are interactive ad units that allow viewers to provide feedback or answer questions.
What Is the Difference Between OTT and CTV Advertising?
Now that you understand the basics of OTT and CTV advertising, let’s take a closer look at the key differences between these two types of video advertising.
The main difference between OTT and CTV is that OTT refers to content delivered over the internet to any type of device, while CTV refers specifically to connected TVs. CTV does not include smartphones, tablets, laptops, and computers.
To avoid confusion, the best practice is to use OTT when referring to content and CTV when referring to smart TVs as the method of viewing that content.
That being said, OTT and CTV advertising are very similar. Both types of video advertising can be targeted and delivered in several different formats. In both cases, they engage the viewer in the same way on the same platforms.
For example, a 15-second pre-roll ad on YouTube would be considered OTT advertising, while the same ad served through a connected TV platform like Roku would be considered CTV advertising.
Who Should Use OTT and CTV Advertising?
OTT/CTV advertising is a good option for any advertiser who wants to target specific audiences with video ads. This includes advertisers in industries from retail to automotive.
For example, a retailer could target CTV viewers who have watched cooking shows in the past 30 days with ads for kitchen appliances. Similarly, an automotive company could target OTT viewers who have watched car-related YouTube content in the past week with ads for their latest model.
Studies show a positive linear relationship between brand presence on OTT and CTV and overall credibility. In other words, the more times a viewer sees a brand on OTT/CTV, the more likely they are to trust that brand. This is promising news for advertisers who are looking to reach specific audiences with their video ads.
If you want to reach the most engaged audience possible, TV advertising campaigns and OTT ads are the best ways to do it. And with OTT/CTV, you can take your TV advertising to the next level by targeting specific audiences with laser precision, while actually having a meaningful way to track conversions.
The Future of OTT/CTV Advertising
In 2019, the OTT advertising market was valued at $121.61 billion, according to Allied Market Research. That figure is set to reach $1 trillion by 2027, growing at a compound annual growth rate (CAGR) of nearly 25%.
With such a large and growing market, it is clear that OTT/CTV ads are the future of programmatic video advertising. Advertisers who want to stay ahead of the curve need to start planning for OTT/CTV now.
There are a few things to keep in mind when planning for OTT/CTV advertising, including:
- The platforms you choose should align with your goals and objectives.
- Make sure you have the budget to support your OTT/CTV campaign.
- Understand the metrics you need to track, including reach, frequency, completion rate, and viewability.
Final Thoughts on OTT/CTV Advertising
When planning for OTT/CTV advertising, consider the platforms you want to use and make sure you have the budget to support your campaign. OTT/CTV advertising is still in its early stages, so expect to encounter some challenges along the way. But if you can overcome those challenges, you’ll be well-positioned to take advantage of this fast-growing trend.