In today’s media landscape, video is everywhere. Platforms like Instagram and TikTok have revolutionized the way we consume short-form video content, capturing audiences with their quick, engaging, and often viral nature.
Streaming TV has also gained significant traction, especially among cord cutters, offering a vast array of long-form content ranging from binge-worthy TV series to blockbuster movies and niche documentaries.
Ninety-three percent of marketers consider video an important part of their strategy, but with so many options, where do you start? How do advertisers tap into this market?
Understanding OTT vs CTV: Choosing the Right Ad Format for Your Campaign
There are many ways a viewer may see a video ad. This blog discusses the differences between online video, over-the-top, and connected TV, helping you determine which option is best for your campaign.
What is Online Video (OLV)?
Online video is a video ad seen on a website or mobile app. There are a variety of positions this ad may be found within a site’s content. Instream ads will play in the pre-roll, mid-roll, or post-roll positions, but outstream ads, typically popping up in the corner of a website, are also OLV.
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OLV ads have two main pros: they’re clickable and they’re cost-effective.
“Being highly scalable, this placement also has the ability to run very granular targeting for more niche audiences,” said Shalyn Mulholland, Vice President of Sales at Division-D.
This means if you have a specific audience you’re trying to reach, you might consider using OLV for your campaign.
However, this placement may also yield lower completion rates than others and doesn’t necessarily include the premium content Connected TV and OTT are known for.
What is Over-The-Top (OTT)?
OTT refers to video content accessed “over the top” of broadcast providers. Streaming services like Hulu, Amazon Prime Video, Vudu, HBO Max, Sling TV, are all OTT services, regardless of whether the content is viewed through a smart TV, gaming console, phone, or laptop.
This placement combines some of the best parts of OLV and CTV. Some of the inventory (depending on device type) is clickable, allowing you to drive traffic to your site.
It also includes premium inventory on a variety of popular streaming apps where viewers are often more engaged with the content.
“A huge pro to OTT advertising is the ability for a viewer to click through,” said Jessie Boudreau, Account Executive at Division-D.
“So many clients look to run CTV advertising but also want in-depth reporting metrics with it. It’s hard to have any insight with non-clickable CTV placements. Including OTT ads in the mix, we can report back on more insights.”
Drawbacks to this placement may include the tradeoff between CTR and completion rate.
You might think this placement is the best of both worlds, allowing access to long-form content while still giving viewers the option to click through.
However, clicking on the ad results in an incomplete view, and optimizing both metrics can be tricky.
What is the difference between OLV and OTT?
The key differences between OLV and OTT are are:
- Content Length: OLV often involves short-form content or ads, while OTT focuses on longer-form content like movies and TV shows.
- Distribution: OLV content is generally embedded within websites or social platforms, while OTT is accessed through dedicated apps and platforms.
- Usage: OLV is often used for advertising within websites or social media feeds, while OTT platforms offer a subscription-based or ad-supported model for consuming content.
What is Connected TV (CTV)?
CTV and OTT are related, only Connected TV advertising exclusively serves on television devices. This format is different than advertising on traditional cable, but similar in that the ads are only displayed on smart TVs.
In most cases, CTV advertising isn’t clickable, but the ads can’t be skipped, resulting in high completion rates.
Advertisers like this placement because of the premium content and viewer experience. Because the ad is viewed on the largest screen, it’s more prestigious to have your ad playing during a television show or movie than while someone is playing the same content on their phone.
“Serving to Smart TVs has the potential to reach several people at a time, which is unique to this video format,” said Mulholland, which is also something to keep in mind when considering Connected TV.
The major drawback of CTV advertising is the cost. It is the most expensive and also the hardest to scale, meaning it is most beneficial for branding campaigns with a wide target audience.
Is YouTube TV CTV or OTT?
YouTube TV is considered OTT. It’s an online streaming service that provides access to live TV channels, including news, sports, and entertainment, without needing a traditional cable or satellite subscription.
However, YouTube TV can also be considered part of the Connected TV ecosystem when it is accessed through a smart TV or a connected device like a Roku or Amazon Fire Stick. In this context:
- OTT: Describes the service and how content is delivered over the internet.
- CTV: Refers to the device (e.g., smart TV or streaming stick) used to access that OTT content.
So, YouTube TV is an OTT service that can be accessed via CTV devices.
What is the difference between OTT and CTV devices?
OTT streaming services can be accessed on multiple devices, including mobile devices, tablets, computers, and connected TVs.
Connected TV devices are more constricted, including smart TVs, streaming devices like Roku and Apple TV, and gaming consoles.
What is Linear vs OTT vs CTV?
Linear TV refers to traditional TV broadcasting methods, such as cable or satellite TV. Viewers watch scheduled programs on specific channels at specific times. It is a one-way broadcast that does not allow for on-demand viewing. Linear TV is characterized by:
- Scheduled Programming: Viewers must tune in at a specific time.
- Limited Interactivity: Limited options for pausing, rewinding, or watching content on demand.
- Broad Audience Reach: Traditional TV advertising is often used for mass-market advertising.
OTT services provide:
- On-Demand Viewing: Viewers can watch what they want, when they want.
- Variety of Content: Includes movies, TV shows, and live TV.
- Flexible Access: Accessible on various devices, like what we went over above.
When discussing linear TV, OTT and CTV advertising, think about the following!
Linear TV: Traditional, scheduled TV broadcast.
OTT: Internet-based content delivery, often on-demand.
CTV: The devices used to stream OTT content.
What to Consider When Choosing an Ad Format
Some of the pros and cons above may make your decision easier (of course, I want the most cost-effective route, or I want my ad on the most premium placements), but there are lots of things to consider before making a final call on what’s best for your campaign.
If you’re unsure what format to go with, let’s chat!
Budget
Different video formats come at various price points. This means that $5000 will get you more impressions on an online video campaign than a CTV campaign. If it is important to you to stretch your budget as far as possible, you may consider more cost-effective placements over premium ones.
Goals
Overall campaign goals will play a huge role in which placements benefit your campaign the most. A campaign focused on brand recognition and video completion rate will want to lean more towards CTV, while OLV is more beneficial to direct response campaigns looking to drive traffic to a website.
“Completion rates can often be lower with OLV because they are skippable/clickable ads,” said Anna Milecki, Account Executive at Division-D. “Whereas with CTV, we always see high completion rates.”
Targeting
Your target audience can also help determine what placements you to consider. If your product is more niche, it will be harder to find scale for that audience on CTV, and even if you do, the cost of those audiences may outweigh the benefit of long-form content on a larger screen.
“With a more niche targeted audience, OLV is much more scalable,” said Milecki. “For the CTV side of things, more broad audience and branding/awareness goals tend to fit best.”
Creating a Well-rounded Digital Ad Campaign
You might find it hard to decide between formats because you want to capitalize on all the pros. Luckily, a well-rounded campaign consists of multiple placements, so if your budget allows for it, we recommend testing any strategy you’re interested in.
Don’t let the fear of an audience seeing your ad in multiple places keep you from utilizing several placements. “Familiarity builds trust, which is critical to driving engagement,” said Mulholland.
Split Testing
By testing multiple placements, audiences, ads, etc., you can evaluate performance and make a call on how to continue with future campaigns based on what produced the most desired results. This is especially helpful if you’re new to video advertising and have no idea where to start, even after reading this blog.
Sequential Messaging
Sequential messaging typically starts with an upper-funnel branding placement, like CTV, and later retargets the viewers who saw that ad with additional placements, like OLV or even display.
“Not only are you exposing the viewer to different types of creatives and messaging, but we’re able to put your brand or product back in front of your target market in a different experience than prior,” said Boudreau.
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“We can serve them in a whole new environment, further driving them down the sales funnel and encouraging brand consideration.”
OLV vs OTT vs CTV: Final Thoughts
Ultimately, each format can drive great results for your brand. While traditional cable and linear TV ads have a place in the media ecosystem, the digital shift in viewer preferences towards video streaming services cannot be overlooked.
OTT platforms provide an unparalleled opportunity to deliver targeted ads to audiences engaged in streamed content.
By leveraging the ability to watch OTT content across various devices, advertisers can reach viewers and niche markets with precision, offering a more customized and relevant viewer experience.
CTV advertising takes this a step further by combining the immersive experience of traditional TV advertising with the personalization of digital strategies.
With more viewers switching to smart TVs and devices for streaming video, CTV ads allow your brand to interact with audiences in a dynamic, engaging manner.
This format is especially beneficial for brands looking to transition into the digital realm, offering the familiarity of TV with the added benefits of digital targeting and interactivity.
By focusing your resources on OLV, OTT, and CTV placements, you can ensure your brand remains at the forefront of digital advertising trends, effectively reaching and engaging modern, tech-savvy audiences.
