Over-the-top (OTT) and Connected TV (CTV) devices are two very popular methods of accessing TV/video content, but they can be easily confused for one another. And the water gets especially murky when you throw in Linear TV (i.e. traditional TV). Understand the difference between Connected TV (CTV), Over-The-Top (OTT), and Linear TV so that as you assemble your advertising strategy, you are speaking the same language as everyone else.
Connected TV (CTV) definition
A Connected TV (CTV) is a device that connects to—or is embedded in—a television to support video content streaming. Different types of CTVs include Xbox, PlayStation, Roku, Amazon Fire TV, Apple TV, and more.
The rise of CTV and OTT has led to the phenomenon known as “cord-cutting,” which is the growing trend of customers canceling their traditional cable and satellite subscriptions in favor of only using these streaming or VOD formats.
Over-the-Top (OTT) definition
Over-the-top (OTT) is the delivery of TV/video content directly from the internet. Users don’t have to subscribe to a traditional cable or satellite provider to access this content; they can watch this content on various devices—tablet, phone, laptop/desktop, television, etc. The video is delivered in a streaming or video-on-demand (VOD) format. Different types of OTT services include Netflix, Hulu, and Amazon Prime. Mass media and networks are also launching their own OTT services such as Disney+ and NBC’s Peacock.
Linear TV definition
Linear TV is a traditional system in which a viewer watches a scheduled TV program when it’s broadcasted and on its original channel. The program can be recorded via DVR and watched later. Linear TV still boasts the largest market; however, reach is fragmented due to the increasingly competitive TV landscape.
What’s the difference between CTV, OTT, and Linear TV?
A CTV device may be used to stream OTT content, but they are not interchangeable terms.
OTT is the delivery mechanism for TV/video content online, usually through streaming or video on demand (VOD) in addition to (or “over the top of”) traditional network providers.
CTV is an internet-connected device a customer uses to watch TV/video content online, like a smart TV, gaming console, or some other sort of internet-connected device.
Linear TV refers to a classic system when a viewer watches a scheduled TV program when it airs on its original channel. The viewer can watch content through an antenna or by paying for a cable or satellite subscription.
Benefits of OTT and CTV advertising
With OTT and CTV advertising, you can reach viewers beyond the reach of traditional Linear TV (i.e. cable, satellite, and antenna). This new audience includes a growing number of cord-cutters or those who don’t pay for standard cable or satellite services. The rise of OTT and CTV viewership provides more meaningful ways for you to engage at the right time with the right target audience at the right moments—bringing together the targeting precision of digital with the high impact of TV viewership.
Which is better for advertising? Connected TV, OTT, or Linear TV?
Connected TV and over-the-top (OTT) advertising benefits
User-controlled viewing experiences lets advertisers get in front of the right audiences at the right times
User-registration data allows for cross-screen targeting
IP-based delivery permits the application of 1st and 3rd party audience data to target households watching ad-supported content
Connected TV and over-the-top (OTT) advertising challenges:
The number of homes with a CTV has not caught up with those that have used broadcast and cable
Many platforms and data providers are not able to match cookies or mobile ad IDs (MAIDs) to IP, which limits the scale of inventory available for IP-based audience targeting
Fragmentation due to under-the-radar account sharing
Fierce competition among content distributors and companies building and selling CTV devices.
Linear TV advertising benefits
Can use new platforms that have added a layer of automation and data-driven decision making to TV media buys
Can apply 1st and 3rd party data beyond Nielsen buying demos to make smarter decisions about what linear TV inventory is purchased for a campaign.
Opportunity to make buys for niche TV networks which could ultimately lead to cost efficiencies and expanded reach vs. just frequency
Linear TV advertising challenges:
Reach is fragmenting due to the increasingly competitive advanced TV space
Out-of-date policies and currencies can impede audience targeting
Even with data, targeting is broad and less granular than on CTV and OTT
How to measure TV advertising campaign effectiveness
There’s usually not one stand-alone metric that can determine if an ad or campaign is successful. Several metrics are required for a full view. Here’s a list to investigate:
The number of unique users that saw the ad to understand where your budget goes to the nearest dollar.
How many times the advertisement was viewed in its entirety. Instead of just tracking the number of people who were exposed to an ad, this shows you how many people finished it—giving you more insight into how much of your message people were exposed to, how engaged they were, and if it resonated.
The number of impressions where the advertisement was audible for any period of time.
Indicates whether or not a user can see the advertisement. This metric is measured differently by different platforms, but, typically the viewability of an ad is calculated if it’s watched for a few seconds and shows up on more than 50 percent of the screen space. Screen size also matters, with larger screens having higher viewability scores. So ads on TVs usually have higher scores than ads on mobile and laptops, reinforcing the captivity of the audience.
Attribution and attribution tracking
Proving the campaign/ad ROI by connecting viewership with the completion of an intended action, such as visiting a website, downloading an app, or going into a physical store.
Cost per view (CPM)
Tells the cost of one thousand impressions but not necessarily viewable impressions or a thousand unique views. Instead, you should look at the cost per completed view which is more meaningful for the success of your campaign.
Cost per completed view
More meaningful than CPM in that it’s a ratio of the total cost of the campaign and total number of completed views.
How to improve your TV advertising strategy with Oracle Advertising and CX
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