Over-the-top (OTT) and CTV are methods many people today use to view their TV programming. It allows viewers to "cut the cord" and stream their movies and shows without satellite or cable. Smart devices such as phones, laptops, tablets, and some gaming consoles can stream OTT programming, as can Connected TV devices such as Apple Firestick, Chromecast, and Roku that connect to televisions to allow them to stream content.
OTT ads are similar to TV commercials in terms of viewing, but the ad analytics are not comparable. OTT and CTV is a unique medium that doesn't benefit from being treated as a linear extension of TV advertising through cable and satellite. Instead, it is more nuanced and similar to digital marketing. The uniqueness of OTT and CTV means TV reps are less likely to understand how they work.
OTT (Over-the-Top) and CTV (Connected TV) is a type of targeted video advertising that you can’t skip and is streamed over the internet. Advertisers reach consumers by serving video ads before or within streamed content, such as TV, movies, and video games. It is delivered on several different devices, both large and small. CTV is the Smart TV or connected device that is considered large screen delivery.
TV reps and organizations that aren't exclusively focused on OTT don't fully understand or appreciate the differences. They are not current on OTT trends, as they consider it an extension of their TV package, which vastly oversimplifies its capabilities. There is considerable variation between OTT platforms, and the type of ad content is evidence of that. In some cases, it's a non-targeted linear continuation of TV ads conducted through contract deals between OTT services and platforms like Hulu and YouTube TV.
The online dependence of OTT and CTV more closely aligns with digital advertising. You can easily target your audience and gain insight into their behaviors and preferences through analytics. OTT and CTV ads work best for awareness campaigns, easily tracked with metrics like completion rates, as well as overall clicks. Since OTT ads aren’t skippable inventory, the completion rates should be very high. If you are delivering ads on a large screen device, consumers are less likely to click their TV. Website views, however, are great metrics, showing when the consumer received the ad and if they visited your website within the first 30-days.
OTT and CTV reach an engaged audience without the schedule constraints and ad price limitations of broadcast stations. It offers various pricing with the options of pre-roll and mid-roll video ads, like those on Hulu, YouTube, or Sling TV, as well as ads in the menu or during pause screens. In contrast, traditional TV determines the pricing of their commercials according to the timeslot and expected impressions.
The pandemic increased the number of cord cutters to 31.2 million American households in 2020, leading to unprecedented opportunities for OTT advertisers. Even with the prevalence of OTT and CTV, a TV representative won't have the proper insight since it operates so differently from traditional television. Some OTT and CTV ads are targeted, while some are simply served up just like television commercials. Unfortunately, not all TV reps disclose this.
The most significant and notable overlap between OTT and linear TV is in the creative for video ads. However, they are extremely different in terms of ad functionality. Linear TV reaches a broad range of people with segmentation through niche stations. OTT allows user-controlled experiences and targeting through online delivery.
Another differentiating factor is that OTT allows for retargeting capabilities that linear TV can't. It must be acknowledged that local affiliates allow similar hyper-targeting. Large broadcasting networks like NPR, NBC, CBS, and others can't possibly support stations in every state or region. Local affiliates give these large networks the ability to customize and target their ads for local audiences.
A TV rep knows all about linear TV. However, if you need help with OTT or CTV, they likely won't be able to offer much expertise and may provide inaccurate or incomplete information. Many TV reps consider OTT an extension of linear TV, oversimplifying the differences and understating the advantages. That potential misrepresentation presents a disadvantage for advertisers looking to reach those homes that have cut the cord, as well as younger viewing audience who never subscribed to cable or satellite.
A respected and experienced digital agency understands the nuances of OTT and CTV. They understand the power that online ads offer through analytics that provides detailed insight into audience behaviors and preferences, allowing advertisers to personalize the ad experience and implement retargeting. OTT is a constantly developing field. Partnering with a digital agency gives you all the resources and expertise you need to implement your advertising more effectively.
Shannon Allen is the VP of Sales for Federated Digital Solutions. She has over 23 years of experience in sales and marketing and over 15 years more specifically working in the digital world. Her passion for digital marketing is what drives her to find the best digital solutions for clients as well as for FDS. Shannon believes that true marketing starts after the sale with strategic campaigns and detailed reporting to help all FDS clients with an ROI, so they see the value in digital marketing.