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

In today’s digital advertising landscape, the terms CTV and OTT are often used interchangeably, yet they represent distinct concepts with different implications for marketers. Understanding the difference between CTV and OTT is crucial for leveraging their unique advantages in a marketing strategy.

This article will explore these differences, shedding light on how each platform can be optimized for maximum impact in your advertising campaigns.

What is OTT Advertising?

OTT advertising (short for Over-the-Top) refers to delivering ads through streaming content that bypasses traditional cable or satellite television.

Over-the-top content reaches audiences on devices like smartphones, tablets, laptops, and smart TVs via apps and websites. This form of programmatic advertising provides precise targeting capabilities, allowing marketers to reach niche audiences with relevant messaging.

What is CTV Advertising?

CTV advertising (short for Connected TV) is a type of OTT advertising that specifically targets viewers using smart TVs or internet-connected TV devices like Roku, Amazon Fire TV, or gaming consoles.

Connected TV enables marketers to deliver ads directly on large screens, blending the precision targeting of digital with the immersive experience of traditional TV advertising. With CTV, advertisers can engage viewers through personalized content and track campaign performance more effectively.

What Is the Difference Between OTT and CTV?

The primary difference between OTT and CTV lies in the type of devices they reach and how the streaming ads are delivered.

• OTT (Over-the-Top) encompasses a broader category that includes any streaming content delivered via the internet across various devices like smartphones, tablets, and laptops.
• CTV (Connected TV) is specifically focused on delivering ads to internet-connected TVs and devices that stream to television screens.

Therefore, CTV is a subset of OTT, providing advertisers with a focused approach to reaching viewers exclusively on large-screen TVs.

Benefits of CTV and OTT Advertising

CTV and OTT advertising offer distinct benefits that can significantly enhance the effectiveness of digital marketing campaigns. Some of these advantages are:

1. Enhanced Targeting Precision

Both CTV and OTT advertising platforms excel in delivering ads to specific audiences based on detailed demographic, behavioral, and contextual data. This allows for highly targeted campaigns that are more likely to reach potential customers with the highest propensity to engage.

2. Elevated Viewer Engagement

The immersive, full-screen experience of CTV combined with the personal touch of OTT advertising leads to higher engagement rates. Viewers are more likely to pay attention to ads that are relevant to their interests and delivered on their preferred devices.

3. Accessible Campaign Insights

OTT and CTV advertising platforms provide robust analytics tools that help advertisers measure the performance of their campaigns in real time. This data-driven approach enables continuous optimization and a clear understanding of return on investment.

4. Premium Viewing Context

Advertising through CTV and OTT ensures that commercials are placed in a high-quality, brand-safe environment, akin to traditional TV viewing but with enhanced digital capabilities. This setting enhances the perceived value and effectiveness of the ads.

5. Seamless Multi-Device Reach

OTT advertising extends beyond CTV, allowing marketers to reach audiences across multiple devices, including mobile phones, tablets, and laptops. This cross-device capability ensures consistent messaging and increased opportunities to capture audience attention throughout their daily media consumption.

How Do OTT and CTV Advertising Work?

OTT and CTV advertising streamline the delivery of targeted ads through advanced OTT technology, providing a sophisticated approach to modern advertising. The basic step-by-step process for marketers looks like this:

• Step 1 – Audience Selection: Advertisers begin by defining their target audience based on demographic, geographic, and psychographic data, as well as viewing behaviors. This information is crucial for crafting messages that resonate with the intended consumers.
• Step 2 – Creative Development: Once the audience is defined, creative assets are developed that align with the campaign’s goals, considering the unique features of OTT and CTV platforms such as video format and length.
• Step 3 – Platform and Inventory Selection: Advertisers choose the appropriate OTT platforms or CTV networks that best match their target audience’s preferences and viewing habits. This involves selecting between various content providers and possibly programmatic advertising networks.
• Step 4 – Ad Placement and Scheduling: Ads are then scheduled and placed within selected content. This can be done directly through the networks or via programmatic advertising which automates the buying and placement of ads in real-time.
• Step 5 – Campaign Launch: With everything set, the campaign is launched. Ads begin to appear on selected OTT and CTV channels during the scheduled times, reaching viewers as they stream their chosen content.
• Step 6 – Performance Monitoring: Advertisers monitor the campaign’s performance through real-time data analytics, tracking marketing metrics such as view rates, click-through rates, and conversions to assess the initial impact.
• Step 7 – Optimization and Refinement: Based on performance data, the campaign undergoes continuous adjustments. This might involve tweaking the ad creatives, adjusting the target audience, or shifting ad spend to better-performing platforms or time slots.

Who Should Advertise on OTT and CTV?

Brands aiming to reach highly engaged, digitally savvy audiences should consider OTT and CTV advertising, especially those with data-driven marketing strategies that leverage precise targeting. This approach is well-suited for companies with comprehensive demand generation and performance marketing campaigns as it works for both generating conversions and boosting brand awareness.

Types of CTV and OTT Ads

CTV and OTT platforms offer various types of ads that enable marketers to effectively capture audience attention and achieve their campaign objectives. The most common ad formats are:

• Pre-Roll Ads: Short video ads played before the main streaming content begins.
• Mid-Roll Ads: Video ads inserted in the middle of longer-form streaming content, functioning like linear TV commercial breaks.
• Post-Roll Ads: Ads appearing after the primary content ends, offering an opportunity to leave a lasting impression.
• Bumper Ads: Brief, non-skippable video ads typically lasting 6 seconds, ideal for quick, memorable messaging.
• Interactive Ads: Engaging ads that encourage viewers to interact, often by clicking on-screen elements to access additional content.
• Overlay Ads: Small, static, or animated banners that appear at the bottom or corner of the screen during video playback without fully disrupting the viewing experience.
• Sponsored Content: Longer ad segments seamlessly integrated into streaming content, presented as branded stories or native advertisements.

How Are OTT and CTV Audiences Targeted?

We touched on this briefly, but let’s expand on it. OTT and CTV platforms provide advertisers with advanced targeting options that help them precisely reach their desired audiences. Some common OTT targeting options are:

• Demographic Targeting: Tailoring ads based on age, gender, education level, and household income to reach specific audience segments.
• Geographic Targeting: Serving ads to audiences in particular locations, whether by country, region, state, or ZIP code.
• Behavioral Targeting: Targeting viewers based on their past online behavior, such as browsing history, purchase intent, and viewing habits.
• Interest-Based Targeting: Reaching audiences interested in specific topics or activities like travel, fitness, or cooking, based on their streaming history.
• Device Targeting: Customizing ads for different devices, ensuring optimal display and engagement on smart TVs, smartphones, tablets, and laptops.
• Content-Based Targeting: Placing ads within specific genres, shows, or channels that align with the target audience’s content preferences.
• Lookalike Audiences: Identifying new audiences that resemble existing customer profiles, expanding reach to potential customers with similar characteristics.

CTV and OTT Devices and Platforms

Where are these ads displayed? CTV and OTT advertising leverage a wide array of devices and platforms to deliver content to viewers in innovative ways. Some of these OTT devices include:

• Streaming Devices: These devices convert standard TVs into smart TVs, enabling access to streaming services. Popular options include Amazon Fire TV, Roku, Apple TV, and Google Chromecast.
• Smart TVs: Smart TVs have built-in apps and internet connectivity, allowing viewers to stream content directly. Brands like Samsung, LG, and Sony offer models with integrated streaming apps.
• Gaming Consoles: Consoles such as Xbox and PlayStation serve as gaming systems while also providing access to streaming apps like Netflix and YouTube.
• Mobile Devices: Smartphones and tablets, particularly those running on iOS or Android, provide the flexibility to stream OTT content anywhere.
• OTT Platforms and Apps: Streaming services like Netflix, Hulu, Amazon Prime Video, Disney+, and YouTube TV offer a vast array of content through their dedicated apps.

CTV and OTT Metrics and Measurement

Accurate measurement of CTV and OTT advertising campaigns is essential for understanding their effectiveness and refining future strategies. Some of the most common OTT metrics include:

• Impressions: The total count of times an ad is displayed across all devices and platforms, indicating the overall exposure level.
• Reach: The unique number of viewers exposed to the ad, representing the breadth of the audience that saw the campaign.
• Frequency: The average number of times a unique viewer is exposed to the same ad, helping gauge potential ad fatigue.
• Completion Rate: The percentage of viewers who watch an ad from start to finish, signaling the engagement level and relevance of the ad content.
• View-Through Rate (VTR): The proportion of viewers who complete an ad versus those who start watching, useful for assessing creative impact and message retention.
• Click-Through Rate (CTR): The percentage of viewers who click on an ad’s call-to-action to visit a landing page or website, providing insights into immediate interest and relevance.
• Conversion Rate: The ratio of viewers who complete a desired action, like signing up for a service or making a purchase, after watching the ad.
• Cost Per Mille (CPM): The cost per 1,000 impressions, offering a way to compare the efficiency and cost-effectiveness of advertising spend.
• Return on Ad Spend (ROAS): Measures the revenue generated for every dollar spent on advertising, highlighting the financial return of a campaign.

OTT and CTV Advertising Best Practices

Successful OTT and CTV advertising requires thoughtful planning and execution to capture audience attention and achieve marketing goals. Here are a few proven OTT advertising strategies to consider:

• Create Diverse Ad Formats: Develop a variety of ads, from short bumpers to longer video formats, to engage viewers at different touchpoints.
• Test Ad Creative and Messaging: A/B test different creative elements and messaging styles to determine what resonates best with specific audiences.
• Optimize for Different Devices: Tailor ad content to ensure it appears well on both small and large screens, maintaining visual appeal and messaging clarity. (Read the complete guide on CTV ad specs)
• Utilize Dayparting: Schedule ads to reach audiences at peak viewing times, maximizing exposure and engagement.
• Leverage Contextual Targeting: Align ad content with related programming genres to boost relevance and audience engagement.
• Personalize User Experience: Use data to deliver personalized ad experiences that reflect individual viewer preferences.
• Monitor Ad Frequency: Manage ad frequency carefully to avoid oversaturation and minimize viewer fatigue.
• Include Clear CTAs: Incorporate prominent calls-to-action that encourage viewers to take the next step or learn more.
• Adopt Omnichannel Integration: Sync CTV and OTT advertising with other channels to create a cohesive and unified omnichannel marketing presence.
• Regularly Review Campaign Performance: Conduct periodic reviews of key metrics to identify areas for improvement and refine future strategies.

OTT and CTV Marketing Examples

Examining how leading brands use OTT and CTV marketing offers valuable insights into successful strategies for reaching and engaging audiences. Some well-known OTT advertising examples from top brands include:

• Nike’s “Dream Crazy” Campaign: Nike leveraged CTV to showcase its “Dream Crazy” video featuring Colin Kaepernick, inspiring viewers across platforms with a strong message on perseverance and social issues.
• Disney+’s Launch: Disney effectively utilized OTT and CTV ads to promote the streaming service’s launch, combining original series teasers and curated content trailers to drive early subscriptions.
• Peloton’s Fitness Content: Peloton reached fitness enthusiasts through CTV ads on smart TVs and streaming devices, promoting its workout classes and community-building efforts.
• Apple TV+’s Original Programming: Apple TV+ advertised its flagship shows, like “The Morning Show,” via CTV ads that highlighted the unique storytelling and quality of their original programming.
• Netflix’s Interactive Specials: Netflix used interactive CTV ads to invite viewers to try out its special “choose-your-adventure” content, like “Black Mirror: Bandersnatch.”
• Uber Eats “Tonight I’ll Be Eating” Series: Uber Eats creatively used CTV platforms to promote its “Tonight I’ll Be Eating” campaign featuring celebrities sharing their favorite food orders, creating relatable content with broad appeal.

Learn more about OTT and CTV CPMs.

OTT vs. CTV Advertising: Final Thoughts

OTT and CTV advertising offer marketers unparalleled opportunities to reach highly engaged audiences with precision targeting, immersive content, and data-driven insights. Understanding the nuances between the two, as well as their unique benefits and best practices, empowers brands to maximize their advertising ROI and refine their messaging for different devices and platforms.

By studying successful campaigns and adapting these approaches strategically, marketers can stay ahead in the rapidly evolving world of digital advertising.