Understanding the Difference Between OTT and CTV

What is CTV?

Connected TV (CTV) is a device that supports streaming video content that connects to – or is a part of – your TV. CTV devices are often used to stream OTT (over-the-top) platforms such as Netflix, Stan, Disney+ and Binge. This relationship is what leads people to mistakenly assume that OTT and CTV are interchangeable.

With OTT advertising, marketers have the opportunity to reach audiences beyond Linear TV’s reach, with CTV advertising putting the ad on the big screen. With the rise of cord-cutters this reach is more important than ever.

This article will aim to debunk 5 common myths about OTT content, CTVs and the effect on Linear TV.

Myth #1 CTV and OTT are the same

Over-the-Top (OTT) is TV/Video content that comes directly from the internet, usually through streaming video on demand (VOD) or “over the top of,” traditional network providers.

The easiest way to differentiate it from traditional TV is that users do not have to be connected to a traditional satellite or cable to stream this content.

OTT content can be watched across many devices such as tablets, smart phones, computers, or a TV. The latter is what we call CTV which is a subcategory of OTT.

Myth #2 BVOD and SVOD are the same

The same as CTV being a subcategory of OTT, so is Broadcast Video on Demand (BVOD) and Subscription Video on Demand (SVOD) being a subcategory of Video on Demand (VOD).

The best way to think about VOD is as an umbrella term to describe a one-to-one relationship between the user and the content distribution type. Each variation of VOD signifies how the channel is monetised, whether that be with ads, subscriptions or with a one-off payment.

Subcategories of VOD would be:

Broadcast Video on Demand (BVOD) – 7Plus, 10Play, 9Now, SBS On Demand’

Subscription Video on Demand (SVOD) – Netflix, Disney+, Prime, Stan

Ad-based Video on Demand (AVOD) – TubiTV, Crackle, YouTube

Transactional Video on Demand – Apple TV (iTunes), Amazon Prime Video, Google Play Movies

It is interesting to note, businesses are starting to adopt multiple models, with Netflix and Disney+ announcing plans for ad supported versions of their subscription services to help reduce costs to consumers, increase subscribers, and grow revenue.

Myth #3 CTV ads cannot be measured

Measuring CTV requires different technology compared to mobile or desktop advertising which may be where this misconception comes from. CTV metrics are undeniably more limited than regular video advertising which can make reporting slightly more complicated, but not impossible.

In comparison to Linear TV, CTV advertising has an abundance of data available, however there’s continued room for improvement. Technologies like Automatic Content Recognition (ACR) can create data segments for strategical ad placements against certain categories or advertisers, similarly, it can help create incremental reach against linear exposure. Household graphs can also help us track consumer response to advertising on a TV screen that hasn’t been possible previously. In short, although limitations and blackspots still exist in this medium, CTV has the opportunity to account and attribute for low-end of the funnel actions, where Linear did not.

Myth #4: Linear TV is becoming obsolete

Despite the pace at which CTV is growing, Linear TV continues to hold a dominating, older demographic audience and is one of the few reliable ways to reach large segments. Whereas OTT and CTV audiences are predominantly adults between the ages of 18-34, older consumers still tend to prefer the familiar, effortless viewing Linear TV offers.

Linear TV also holds expertise in the resources needed to stream live events such as sporting games or live game shows that encourage viewer interaction. Digital platforms are working to become the premier choice for live sporting events but due to technical limitations Linear TV still leads in this market.

In short, audiences aren’t declining, they are just adjusting their viewing behaviour and it’s important that we look at both Linear and OTT as one total TV channel.

Myth #5: OTT is purchased in the open marketplace

OTT inventory is still limited and largely unattainable in open marketplace.

OTT ad inventory is hard to come by in the open marketplace, and traditional IO buys are commonplace. However, that doesn’t mean it can’t be purchased out of your DSP, with PMP contracts being negotiated with publishers and suppliers, omni-channel buying is still possible for OTT.

Want to learn more about OTT Advertising?

If you’d like to learn more about OTT advertising and how it can be implemented into your marketing strategy, contact one of our amazing Rapid Experts today.

Sources

1. https://www.adexchanger.com/tv-and-video/6-big-myths-of-connected-tv-debunked/

2. https://www.adexchanger.com/adexplainer/adexplainer-the-difference-between-avod-and-fast/#more-201599

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