Many people, including those in the marketing industry, use the terms OTT and CTV interchangeably, which can be very confusing as they mean two different things. Although they have separate meanings, OTT and CTV are two parts of the same whole that is streaming TV.
The Definitions
Connected TV (CTV) – the device that enables the TV to access online content by connecting to the internet. This can be a smart TV that has its own access or a TV hooked up to a gaming system or digital media player.
Over The Top (OTT) – the video content that is being streamed “over-the-top” of the internet. Providers of OTT content include Netflix, Hulu, Amazon Prime, and Disney+, among others.
The Future of Streaming TV
The number of cord cutting households, or consumers who have canceled their cable or satellite service and opted for a streaming service, has been on the rise for the past few years. Like many digital trends, the pandemic increased the velocity with which this is occurring. Many wallets were tight in 2020 which had consumers evaluating how their money was spent. Sporting events were also canceled which is a mainstay of traditional pay TV services. This led to a 7.5% year-over-year decrease, the biggest drop ever, in the number of households that have traditional pay TV subscriptions. According to eMarketer, “By the end of 2024, fewer than half of US households will subscribe to a pay TV service.”
There is also a new breed of consumer called cord-nevers who have never paid for a traditional pay TV service. Cord-cutters and cord-nevers combined make up roughly 51.7 million households in the US as of 2020. By 2022 82% of all consumer internet traffic will be video.
What This Means for Advertisers
There is ample opportunity to get the right message to the right audience at the right time using advertising on CTV devices and OTT content. Although the big players in OTT streaming services, like Netflix and Amazon Prime, do not offer ad space there are several others that do like Sling TV and Roku.
There are several benefits to utilizing this marketing tactic:
Specific Audience Targeting – Like many other digital marketing solutions, advertising on CTV and OTT offer targeting capabilities based on things like demographic information, browsing behavior, search habits, remarketing, and location. Advertisers can also target the content itself if they have an idea of what their target audience might be watching.
Ads Are Non-Skippable – Streaming platforms that run advertising do not allow the user to skip past the ads making for a captive audience. Consumers often watch streaming services on mobile devices meaning they will most likely take it with them while doing other activities.
Detailed Analytics – With any marketing strategy the ability to gain data and insights into the effectiveness of the campaign is essential. Ads on OTT platforms and CTV devices offer tracking for different key performance indicators like views and click through rates allowing advertisers to optimize mid campaign.
Considering adding OTT and CTV advertising to your marketing strategy? Amplified Digital can help! We offer services to get you from the production of a high quality video ad to choosing what audiences to target where with that ad. Contact us today to get the conversation started!