The ad industry is full of 3 letter acronyms, and when it comes to spending marketing dollars, we should take a step back and make sure we fully realize what they mean. Sometimes it may become confusing because everyone has their own definitions. The same principle applies to understanding the difference between various advertising strategies, such as OTT Vs CTV.
That wouldn’t be a problem here. We’re taking a straightforward path to unpack these terms and see what they really mean for your business? Which one is a better destination for your promotion campaign? And if they’re as efficient as people say, when and how should you start embarking on this new road?
OTT Vs CTV: What Do They Mean?
Everyone is talking about Over-The-Top (OTT) and Connected TV (CTV) right now, and more often than not, they’re used interchangeably and in the wrong context. And to be fair, partly because there’s no central authority to define marketing terms, and everyone has their own understanding.
Nonetheless, there’s a common understanding of what these terms mean. With some adjustments, that’s what we subscribe to here. Without further ado, let’s get into it:
Connected TV (CTV) Definition
A Connected TV (CTV) is a device that connects to—or is embedded in—Smart TVs or other TV sets to support video content streaming. Different types of CTVs include Xbox, PlayStation, Roku, Amazon Fire TV, Apple TV, Samsung Smart TV, etc. Your phone, iPad, or laptop aren’t considered CTV devices.
When people hear about CTV, they often think of a TV set with some extra options. But in fact, CTV includes all the household appliances mentioned, which can be divided into three main categories: Smart TVs, gaming consoles, and internet-connected devices.
Over-The-Top (OTT) Definition
Now here’s where many get confused. OTT doesn’t refer to a specific device, and CTV does. It’s a method of delivering TV/video content directly from the internet. With CTV, you need a TV set, cable, antenna, the whole package. But with the CTV technology, users don’t have to subscribe to a traditional cable/satellite provider to access the content.
Tablets, phones, laptops, or desktop computers can act as Connected TV. The program is delivered in a streaming or video-on-demand (VOD) format. You’ve undoubtedly heard of many OTT service providers, including Netflix, Hulu, and Amazon Prime. Although perhaps you didn’t recognize them as such.
The popularity of OTT content delivery is rising at an incredible pace. Many traditional mass media networks are also launching their own OTT services, such as Disney+ and NBC’s Peacock. There’s no doubt that OTT will dominate the lion’s share of marketing and content production in the future.
The primary difference in OTT vs CTV comparison is that OTT is the delivery mechanism for TV/video content online, usually through streaming or video on demand (VOD). CTV is an internet-connected device a customer uses to watch TV/video content online, which may or may not be through an OTT delivery mechanism.
OTT Vs CTV Or OTT Plus CTV
CTV and OTT aren’t identical. That’s for sure. For example, from an advertising perspective, their main difference is that OTT typically consists of pre-roll ads and other video advertising delivered to users. But CTV ads are placed alongside apps or streaming platforms. In CTV, there isn’t a clear fault line between the content and advertising.
That being said, CTV and OTT are so increasingly interlinked that their complementary aspects are far more apparent than their differences. The facts on the ground tell us that most promotion campaigns combine different marketing strategies.
Both CTV and OTT are on the rise. The number of users in the OTT Video segment is expected to reach 3.9 billion users by 2026, and revenue in OTT Video streaming is projected to hit US$281 billion in 2022 with an 11% annual growth rate.
But what’s the reason behind this dramatic growth? Why has OTT and CTV advertising turned into such an enormous part of the marketing industry? And what are the advantages of each advertising approach in CTV vs OTT comparative analysis?
Targeting Capabilities
CTV enjoys highly complicated targeting algorithms, placing audience addressability at the center of connected TV solutions. Even though this capability heavily varies depending on the content provider, with a CTV and OTT mechanism, one can guarantee that marketing dollars are being laser-focused on the most valuable and targeted viewers.
Contextual targeting is what makes CTV advertising such a money-making strategy. The traditional method is paying for ads to reach all viewers with different demographic and interests. With CTV, you can optimize data-driven targeting to target your desired consumers. What could be better than getting consumers interested in your brand or product?
Measurable Results
Advertising has integrated multiple innovations and technologies. Among the most successful examples is the rise of programmatic advertising. Programmatic advertising is basically the utilization of automated technology for media instead of traditional, often manual or direct, digital advertising methods.
Consequently, programmatic platforms enable measuring the success of Connected TV campaigns with the most sophisticated metrics. This provides invaluable insights to adjust and redesign objectives to boost brand awareness and return on investment.
Growing Audience
“People go where the money is”. But in the ad industry, that’s not true. It’s, in fact, the opposite: the money goes where the people are, which makes sense. If you think about it, the audiences are the most nitty-gritty of advertising. There was a time when newspapers, radio, and traditional TV were the leading popular medium. That has changed.
Today connected TVs, and over-the-top media services are where people spend most of their time. And it is not just leisure. Education, communication, socializing, and many other aspects of our lives are happening in and on social media apps, streaming platforms, etc. Having such a massive number of audiences is the holy grail of every marketer.
OTT Vs CTV: Factoring Effectiveness
Starting in 2020, most marketers switched over to programmatic from linear TV advertising or, at the very least, added CTV and OTT to their promotion programs. This was undertaken primarily due to cost-effectiveness.
Connected TV is undoubtedly one of the most expensive video advertising tactics, with an average of $35 per thousand. But, here’s the upside: The Cost Per Completed View (CPCV) and impression rates are generally higher than any other video ad placement.
Brand Awareness
CTV never stops to amaze; high flexibility, great cost-benefit ratio, you name it. But increasing brand awareness is where CTV truly shines among other marketing approaches. With CTV, you’ll have the opportunity to represent your business to people who have voluntarily positioned themselves to be entertained. That’s where an impressive and compelling story can get the job done.
There are some principles to create the most impact. Honesty and authenticity are the foundation of brand image promotion. Moreover, with our ever-shrinking attention span, following an engaging, immersive, and preferably interactive approach to business projection creates an unforgettable appearance.
Audience-First Strategy
We’ve covered targeting and why it matters in the ad industry. The other equally important aspect is applying an audience-first strategy. It simply means knowing your audience even more than they know themselves and putting that knowledge at the front of whatever marketing tactics you’ve been following.
It’s easier said than done, or is it? First, you need exhaustive research about your audience, market gaps, and how your competitors have been doing so far. The second is knowing your unique value and how your services and products will fulfill that gap. And finally, it’s time to align your values, tactics, and vision to your audience’s interests. And then you’re good to go.
Bottom Line
There you go, folks. We hope this has helped to settle the OTT Vs CTV dilemma. Remember that marketing has never succeeded by following an ad hoc or exclusivist approach. In a complicated world, and with such an unlimited array of interests and needs, you require every means possible to reach your clients as well as your full potential. Accordingly, we’d be more than happy to help you along the way. Please contact us today. We look forward to working with you.
