With the rapid growth in streaming services and smart TVs in the past few years, Over-The-Top (OTT) and Connected TV (CTV) advertising have emerged as trailblazers in digital marketing and content consumption.
The allure of on-demand content and content personalized to the user has shifted consumer behavior away from traditional television, cable, and satellite services. OTT/CTV isn’t merely a trend but a transformative reshaping of how we consume and engage with content.
To understand where OTT/CTV marketing is going in 2024, we need to understand the fundamental differences between the two, look back at what’s allowed them to expand, and explore how it’s growing.
UNDERSTANDING THE DIFFERENCE BETWEEN OTT AND CTV
It’s not uncommon in digital marketing to see OTT and CTV used interchangeably. While they often intermingle, they’re two distinct facets of media.
OTT: OTT content refers to video or audio content delivered over the internet “over-the-top” of traditional distribution methods like cable or satellite. A consumer can access OTT content from devices like smartphones, computers, and smart TVs through services like Netflix, Hulu, and Amazon Prime Video. The strength of OTT lies in its ability to provide on-demand content to users, which frees them from the constraints of scheduled programming on traditional devices.
CTV: CTV is a part of OTT, specifically integrating televisions with the internet — smart TVs. It allows users to access streaming services (like Netflix) through their smart TV, further blurring the line between television and online content. It’s not just about smart TVs, though. Gaming consoles and streaming devices (like Roku or Apple TV) are also conduits for consumers to access CTV.
THE RISE OF OTT/CTV
The roots of OTT go back for at least a decade when internet speeds and home connectivity reached a point where seamless streaming was possible. Early platforms like YouTube introduced consumers to OTT content, but the rise of subscription-based streaming services and a desire from consumers to cut the cord on cable paved the way for its success. Over the last few years, the integration of internet-capable devices (from smart TVs to tablets) in our homes has made the switch from traditional devices practically effortless.
During the pandemic, Americans 18 and older spent significantly more time on connected devices. Minutes per day spent on mobile devices rose from the year previous from 181.1 to 204.5 while CTV usage rose from 59 minutes to 82.1 minutes.
OTT/CTV VIEWERSHIP WILL CONTINUE TO GROW IN 2024
In the first quarter of 2023, cable, satellite, and internet TV providers collectively lost 2.3 million customers — the worst subscriber losses to date. Those viewers are turning to streaming services instead.
The time we spend on connected devices each day is expected to continue growing in 2024, rising to 234.8 minutes on mobile devices and 123.4 minutes on CTV devices, according to eMarketer.
While some streaming services offer premium subscriptions to avoid ads, viewership on free or low-cost ad-supported streaming services like Pluto TV is high
In fact, in 2023, the number of households with ad-supported services (like Pluto TV, Roku, and Tubi) eclipsed the number of households with non-ad-supported video services (83.7 million homes to 81.1 million homes, respectively). This trend is expected to continue through 2024 and beyond.
That provides a growth area for businesses to target their video ads to more engaged consumers. OTT/CTV allows advertisers to reach highly targeted audiences who are watching content they love — while also being able to track consumer behavior after they’ve seen the ad.
OTT/CTV SHOULD BE IN YOUR 2024 MARKETING STRATEGY
As more households cut the cord on traditional cable TV, streaming services and connected TVs are emerging as the go-to platforms for entertainment, transforming the way we consume and interact with content. That’s good news for businesses!
OTT/CTV provides us with valuable data about audience behavior and preferences that cable never could. Businesses can leverage these powerful metrics to better target their audiences and ensure their messages reaches them where they’re spending their time the most.
Are you ready to get started running an OTT/CTV campaign for your business? Federated Digital Solutions can help! Contact us today to learn more about how you can take advantage of this growing segment of advertising!
Written by Shannon Allen
Shannon Allen is the Chief Revenue Officer for Federated Digital Solutions. She has over 25 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.
