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CTV vs. OTT: Differences in Advertising Strategy

THIS POST IS A PART OF OUR “COMPREHENSIVE GUIDE TO CONNECTED TV ADVERTISING” — CLICK HERE TO LEARN MORE!

Being certain about your advertising strategies for CTV vs. OTT as a whole has been one of the leading topics pulling the heartstrings of many media buyers and marketers as we transition as an industry from broadcast into the digital/streaming realm. What should we do for connected television versus browser, versus mobile, versus in-app? CTV has its strengths and limitations and the approach does have to be unique.

“The are 400 million connected TV devices in the U.S. and 64% of TV households have three or more connected TV devices today.”

-Forbes

As we have explained before, first it must be noted that CTV and OTT are not direct competitors. The overarching term, OTT, stands for “over-the-top” and any streaming video content accessed over the Internet, instead of traditional methods like cable or broadcast, falls into the OTT category. So, Connected TV is a subset of OTT, specifically refers to televisions with the capability of streaming video via internet or the streaming boxes and ‘sticks’ connected to them. This includes Smart TVs, Roku, Apple TV, Fire TV, and gaming consoles with internet connectivity like Xbox or Playstation.

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The New Normal: Unexpected Growth in CTV/OTT Advertising

As the COVID-19 crisis quickly forms a new normal for our daily life, there is no better time to look into CTV/OTT strategy because the advertising landscape is rapidly responding to suit the pandemic’s impact on consumer behaviors.

According to a recent study, the “use of ad-supported video-on-demand apps is up by fully 74%” from March to April this year — and that was only the first official month of nationwide quarantine. While ad spending on traditional media suffered significant decreases during the pandemic, CTV ad spending remained unfazed.

CTV Advertising: Direct Access to Your Premium Audience Base

According to a recent study conducted by the ANA, CTV advertising has been proven to extend a brand’s audience reach, provide deeper interactivity, and provides more ad slots advertisers to fill as needed.

In general, CTV advertising carries the following advantages and limitations:

  • CTV ads are non-skippable – This means that your campaign will have much higher view rates, but also is at risk of being physically disengaged with, IE leaving the room. 
  • CTV by nature has a premium audience base – The audience here is deeper down your marketing funnel and thus, omnipresence achieved via blended retargeting becomes the main driver behind campaign efficiency.
  • CTV ads are not clickable – This forces advertisers to focus heavier on brand-development and influence-building over direct lead generation. For branding messages to be the most efficient, tailored content must be delivered to the proper target audience repeatedly for reinforcement.

The actionable element (or lack thereof)  of CTV is why Strategus introduced the Encore Omnichannel Technology to CTV advertisers. Encore Omnichannel instantly re-targets a viewer who recently completed a CTV ad. They are delivered clickable ads on other devices, such as their phone or tablet to convert. This way you can create direct action from a CTV ad.

Researchers predicted that consumers will continue to search versatile interfaces to access diverse streaming media but connected TV will remain “the cream of the OTT media consumption crop.” We completely agree and recommend CTV as the premium option in the OTT ecosystem because of the quality of content, the size of the device and the subsequent viewer engagement that comes from that.

Quality Of Content And Ad Verification: The Crux Of Non-CTV OTT Advertising

OTT Advertising outside of connected TV often requires a heavier hand when it comes to ad verification, especially if you are working with mobile ads. For example, Strategus allows you to exclude mobile placements completely by default.  Mobile is the least premium placement of all for CTV/OTT ads due to its limited screen size being only a fraction of the screen size of a CTV. On top of that, we can guarantee 0% of impressions serving on mobile.

Unlike CTV, OTT as a whole does not have the same type of premium content as a generality. Rather, it provides broad access to a massive variety of premium and user-generated content. Currently, there are over 820 million OTT devices domestically. Since OTT advertising allows access to a wide range of devices and placements, brand security and brand safety naturally become the core behind the discussion. For example, you want to avoid having ads placed on suspicious inventories. You also want to focus on devices with a more premium viewer base to ensure return on investment. And screen size should always be considered in the entirety of the spectrum of OTT. 

The Best Of All Worlds In OTT Advertising – Blend, Follow-up, Convert

Like all other channels, strategy accounts for the first half of a successful CTV/OTT campaign. As mentioned above, CTV advertising has its limitations as the ads are non-clickable on a TV screen. Therefore retargeting, an omnichannel approach and successful followup is by far the best way to maximize both CTV and OTT advertising campaigns and empower the actionability of the rest of OTT with the premium quality of CTV.

A few blended strategy best practices include the followings:

  • CTV/OTT + Retargeting Combination: Made possible with our Encore Omnichannel technology, you can immediately follow-up with a likely prospect who has viewed a CTV ad in full with banner and/or scroll ads and move them through the funnel with powerful sequential messaging.
  • CTV/OTT + Paid Search Combination: sponsored content and keywords increase your visibility among viewers who have already displayed an interest in your service/product. Paid search campaigns often serve as the final push that moves a viewer from the awareness to consideration.
  • CTV/OTT + Programmatic Display Combination: Viewing the same ad, or seeing the same brand across different mediums will make a brand much more memorable

The Future of CTV/OTT Advertising

With ad spending budgets displaying a clear trend of moving from traditional platforms to streaming TV and other smart devices, the future of CTV/OTT advertising shines with positivity and growth.

According to the 2020 U.S. Digital Video Advertising Spend Report issued by the IAB, digital video advertising remains relatively stable and is driven by CTV advertising. According to the report, the “average CTV spend for the year is expected to reach $16MM per advertiser (+8% y/y)” and “more than half of buyers are shifting dollars from Broadcast (53%) and Cable TV (52%) advertising towards CTV.” This shows that CTV/OTT advertising will continue to gain traction and become a critical component of any brand’s overall advertising strategy. In the next five years, CTV/OTT advertising will continue to grow as it responds to the user’s growing demand for personalization, hyper-targeting, and interactive advertising.

The Bottom Line

In conclusion, the main difference between CTV vs. OTT advertising strategy is that CTV interacts with significantly more premium inventory whereas OTT can capture a much larger crowd. Meanwhile, CTV ads are non-clickable and therefore require retargeting to make them actionable and drive direct-conversion whereas the rest of OTT needs a heavier hand with ad verification and inventory management to ensure brand security. So, are you ready to utilize CTV/OTT advertising — one of the most resilient and fastest-growing advertising methods to bring your brand’s advertising to the next level? Our team at Strategus are experts on CTV & OTT advertising and we are your guide to success. Contact us to get in touch with our experts before you execute your next CTV/OTT ad campaign.

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