Years ago when our grandparents and great grandparents were introduced to television, jaws dropped and eyes widened. The (at the time) state of the art technology revolutionized ways of peoples’ entertainment at home. It prompted the emergence of broadcast channels and allowed big corporations to nearly monopolize the TV air. This order persisted until the next big new thing stepped onto the scene: world wide web, which reinvented everything from electric plugs to content consumption.
Now, twenty years into the new millennium, things have changed drastically. We don’t trust our entertainment to TV channels anymore. Now we consume shows over the top and access the internet from our TV sets. The ever-growing number of people begin to adopt these blessings of technological progress. As well as more and more ad tech professionals scrutinize new content delivery systems to find ways of benefiting from them, oftentimes confusing them. Now the time has come to resolve the confusion OTT vs CTV and sort out why it’s crucial to know the distinction.
Сonnected TV is a large screen device that streams videos with the help of the internet. Sometimes, viewers choose to download their videos but in most cases, they stream movies and shows in apps.
When you think of a CTV device, Smart TV is probably the first thing that pops up in your head. However, there are a number of devices that turn your not so smart television set into a TV that is connected. Here are some devices that are recognized as CTV gadgets:
- Smart TV. This is a TV set with an internet connection and an OS that allows you to install apps on it. Such a TV works out of the box and doesn’t require anything except a WiFi signal or an Ethernet cable.
- Connected devices. They stream videos onto your TV set even if it doesn’t have an internet connection. On such a piece of equipment, you can download and utilize apps from your preferred broadcasters or streaming companies. Chromecast together with Apple TV, Amazon Fire Stick, and Roku is the most widely-known connected devices.
- Video game consoles. Major producers of gaming consoles such as Playstation, Nintendo, and Xbox, all have their online market platforms where viewers can find apps for playing videos too.
Now, when the concept of CTV is a bit clearer, let’s look into what OTT is. This abbreviation stands for “Over the top”. It means that video or media in some other formats is dispatched to users “over” the mainstream television(linear, cable, etc). The main advantage that motivates users to opt-in for such medium and ditch traditional TV lies in subscription fee which is lower or absent at all.
It is tempting to think that OTT users are only those who watch CTV. But these aren’t only people who use one certain type of device or content vendor. Users in OTT are:
- OTT viewers. These people consume video with the help of any web video library or an application. OTT services for streaming content are YouTube, Netflix, HBO Now, Hulu, Amazon Prime Video, and many others. The subscription models are different, but the result is similar: all the services stream video.
- CTV/IPTV users. Viewers who consume videos on their connected TVs or internet protocol TVs.
- Consumers on linear OTT. Linear OTT sounds confusing, right? No worries, it’s not that difficult. These are users that use internet solutions for watching TV channels by paying a monthly fee. Here are businesses that provide such a service: YouTube TV, DirectTV, Sling TV, Hulu with Live TV, and PlayStation Value.
In recent years, the popularity of OTT was going through the roof. The OTT market is predicted to reach over $332 billion by 2025. More and more people cut cords in favor of OTT. And there are four main reasons for such growth.
- Affordability. Comparing cable subscription fees, OTT services have become largely recognized as cost-effective.
- Exclusive content. Large OTT providers invest millions into creating original content. Content produced by streaming platforms is of such a high quality that many of them became critically acclaimed (including Emmy and Golden Globe awards, as well as the Oscar nomination for the best picture).
- Cross-device support. If you want to watch cable TV, you need a TV set, and there is nothing you can do about it. Nowadays, OTT changes the game’s rules by enabling you to stream your favorite show right onto your preferred gadget or download media files into your app to view it later.
- Variety of content formats. As a matter of fact, not only videos are delivered for OTT solutions. Also, users can listen to internet radios and podcasts that stream audio. There are even messengers and voice calls apps that are considered as OTT services.
CTV vs OTT
As you can see, even though there are some similarities between connected TV and over the top content delivery, they are more like apples and oranges. So let’s take a closer look and the key distinctions.
OTT is a method of enjoying content. For instance, when you watch Roku channel, you view content over the top of a traditional cable provider. You are not part of the traditional TV infrastructure and do not contribute to the cable providers’ business or rely on their services. You may be a subscriber to a cable provider and at the same time go over the top by consuming content from Netflix or Amazon Premium Video.
On the flip side, CTV is basically the device with the help of which you access content. And not just any device, but in most cases a TV set or a similar large display. It’s not important how the TV is connected (directly, through a special device or a console), but it has to be a television set or another largest screen at home.
What about advertising on CTV and OTT?
Concepts of CTV & OTT? – Check. The difference between these two notions? – Check. Now let’s talk about what truly worries professionals in the adtech industry — the advertisement.
Advantages of advertising on OTT:
- Brand safety. When displaying their ads on OTT, advertisers don’t have to worry about the compromising content their ads will be displayed with. The ads are featured only on the top tier platforms that support ads.
- Maximum viewability. On OTT platforms, advertisers eliminate the risk that their ad will be displayed below the fold as it happens on websites or social media.
- Impressive Ad Completion rates. The average ad completion on OTT is 98% which is the best performance compared to other media.
As for CTV advertising, here you enjoy the same benefits as on OTT plus some more:
- First-rate targeting. By a powerful combination of first and third-party data, advertisers exclude the guessing game from their promotion strategy. Every dollar from the ad budget is spent solely on targeted users.
- Advanced reporting. Platforms that offer programmatic ad placements on CTV inventory display the results of the campaigns that feature traditional and digital metrics, including impressions ordered vs aired, video completion rates, impressions by different criteria, and click rate.
- Ever-increasing audiences. Since millennials migrate from traditional TVs to CTV and Gen-Zers are following their leads, the CTV audiences keep growing with mostly representatives of the labor force (also known as primary products and services consumers).
The main difference between OTT and CTV is that the former is the way of content delivery and includes many devices, and the latter is where the content is viewed. This explains why the two terms are usually used together. With the vast amount of data at hand, OTT&CTV offers immensely attractive opportunities to everyone from content providers and viewers to marketers and advertisers.
Read more here to learn about your advertising opportunities on Roku.