OTT vs. CTV Advertising: What's the Difference?

No matter what type of business you own, OTT and CTV advertising both present excellent opportunities to grow your brand. When you use these channels to market your business, you are reaching a unique audience whose viewing habits don't necessarily involve traditional TV. It's important to understand what these marketing tactics are and how they work to take full advantage of them. 

Let's discuss the capabilities of OTT and CTV advertising, how they’re different, and the advantages and growth trends of each one. 

What is OTT? 

OTT stands for over-the-top. It is the streaming of content that goes "over" the cable box directly to consumers via the internet. It provides a way to watch television across multiple screens like tablets, smartphones, smart TVs, or laptops with no cable or satellite subscription required.   

Vimeo, YouTube, and Netflix are just a few of the OTT platforms available for ad placement.    

What is CTV? 

Connected TV, or CTV, refers to the devices used to connect to the internet for watching content. These include smart TVs, connected devices like Roku, Apple TV, or Amazon Fire Stick, and gaming consoles such as Xbox or PlayStation. Smartphones, laptops, and tablets are also CTV devices. CTV content is streamed via apps that are downloaded onto the console or device.    

What are the differences between OTT and CTV advertising? 

Because OTT and CTV advertising are used in conjunction with one another, the difference between the two can be confusing. 

OTT advertising is ad placement that reaches the viewer across all channels. Marketing is delivered in the form of short video display ads that run within streaming video content. It is individualized content provided to viewers via the sites they most frequent.  When you advertise your brand via OTT, your message targets your audience directly and goes where they go.    

CTV advertising is a channel for OTT ad streaming to reach the customer.  A CTV advertising campaign allows marketers to display their ads on platforms where they can be watched instead of a subscription fee. According to research, 43% of Americans are okay with watching ads in return for free content.    

What are the advantages of each? 

With both OTT and CTV advertising, the opportunity to grow awareness, drive demand, and entice new customers is huge. Both of them have excellent targeting capabilities, and when used together, can reach high-intent prospects with specific ads. For example, a consumer may respond to your ad on a smartphone earlier in the day. In the evening, your marketing would appear to that potential customer while TV is watched using an Xbox connected device. 

OTT and CTV are highly trackable. This gives marketers an easy way to measure key metrics such as the total number of impressions, click-through rate, demographic reach, and other information that is useful to understanding campaign success.  

With OTT advertising, viewers are reached across top-tier networks and popular content. Ads displayed on OTT platforms appear above the fold giving maximum viewability. Because someone watching content on an OTT platform cannot skip ads, close a window, or install an ad blocker, ads have a high completion rate with 98% of viewers watching to the end. Shorter ads tend to keep the viewer engaged while waiting for the program to resume. As a result, 72% of OTT users recall seeing a specific ad. To show how effective an OTT ad can be, 66% of OTT watchers report having discovered a new product or brand while streaming. 

CTV advertising offers the same benefits as OTT plus first-rate targeting and advanced reporting. Marketers can measure an ad campaign's effectiveness in real-time and track engagement, conversions, and other relevant metrics to make informed decisions, increase efficiency, and improve results.   

With the current migration from traditional TV to CTV, the audience for CTV advertising is steadily increasing. 

What growth trends do they project? 

As far as growth, both OTT and CTV advertising appear to have tremendous potential. The OTT market is projected to reach $332.52 billion by 2025, making the outlook for CTV advertising equally good.  

Because of consumer migration from traditional TV to connected TVs and devices, many marketers are expected to shift their efforts to CTV and OTT advertising. It saves money because cost per impression is lower, and it enables brands to target members of their audience across multiple channels. For brands that want to add additional channels to their marketing strategy, OTT and CTV advertising are good options.    

Your media partner can help you get started with one or a combination of these forms of advertising.