OTT vs. CTV vs. Digital Video Ads Explained

There’s often confusion about the categories of OTT vs. CTV vs. video advertising. In one sense, they are the same because they use video as the advertising medium. However, there are specific differences, and knowing these can help you better position the opportunity to advertisers. The opportunity is enormous with OTT and CTV consumption growing and more people spending time engaging with video across devices.

OTT vs. CTV vs. Video Advertising Defined

In the digital video ecosystem, there are three tactics you can offer to your advertisers. While they are all video, they have differences.

OTT (Over-the-Top)

Hulu, Netflix, Apple TV+, Disney+, Roku Channel OTT refers to streaming services that deliver content over the internet. It gets its name because the service delivers “over the top” of another platform, which in this instance is the internet service provider. OTT services can be video- or audio-based. Popular examples include Hulu, Netflix, Apple TV+ and Disney+. OTT ad-supported services allow advertisers to target by household demographics, state, designated market area (DMA) and ZIP code.

Within OTT, there are different models. One is SVOD (subscription video on demand). In most cases, like with Netflix or Apple TV+, viewers pay a premium, and there’s no ad content. Some have less expensive subscriptions or hybrid options, like Hulu and Roku Channel.

plutotv and tubi The second category is AVOD (advertising-based video on demand). Viewing is free to consumers but has advertising similar to traditional TV. Examples include Pluto TV and Tubi.

Two types of ad setups are possible for OTT: client-side and server-side. For client-side, the ads load before a video. The server-side setup integrates ads into the frames of the media, which means they’re not blockable.

CTV (Connected TV)

CTV Examples CTV is a type of OTT that services video on internet-connected TVs, using premium, professionally produced content. Those can be smart TVs, which have built-in internet access. It also includes TVs connected to devices like Roku, Fire TV Stick or a PlayStation. Targeting is possible by state, DMA or ZIP code. It doesn’t allow for household targeting.

Video Advertising

Video ads are short 15- to 30-second ads that play on websites and in apps. They are viewable on desktops, tablets and mobile devices. You can target audiences by:

Behaviors and interests
Geography (ZIP codes and range in miles)
Age cells
Gender
Education
Parenting
Household annual income

YouTube TrueView

Another segment of video advertising is the YouTube TrueView model. It’s a cost-per-view (CPV) tactic. Advertisers only get charged for completed views, as defined by the platform. It’s a different option than traditional cost-per-impression (CPM) video ads.

The targeting capabilities of YouTube TrueView align with Google ad options, as it’s the parent company. They include geographic and demographic attributes and behaviors and interests.

OTT vs. CTV vs. Video Advertising: The Differences

OTT is really the method of video delivery, and CTV, a subset of OTT, is a type of device you view the video on. That’s the true difference here — the small screen vs. the big screen.

OTT and CTV advertising have some targeting potential, but video advertising offers more. Understanding the goals and target audience of your advertiser will help determine if these targeting variations are relevant to them.

The engagement of audiences is different for each type. For example, those viewing OTT or CTV ads usually cannot skip them. Video ads may also have this feature, but not always.

The Advantages of Each Type of Advertising

There will be certain times when you’ll recommend one over the other. Many factors will influence this, including advertiser goals, budget and resources. Here are the advantages of each to share with your customers.

OTT Advantages

It reaches more engaged audiences since they can’t skip ads, so completion rates are high.
Ads are servable across multiple devices.
Viewers can click a button directly in the ad to learn more.
Data-driven targeting capabilities help advertisers reach their desired audience.
It can reach viewers who are “cord-cutters” and don’t subscribe to traditional media.
Sequential messaging is possible, allowing advertisers to tell a story through a series of ads.
Campaigns are trackable and measurable.

CTV Advantages

It shares the same advantages as OTT except for the multi-device options and interactivity.
High-quality content on the big screen can drive brand recognition and equity.
It’s less expensive than traditional broadcast TV ads.

Video Advertising Advantages

It offers the most ways to target, which could appeal to advertisers with a well-defined buyer persona.
The ads can play in apps, which is an additional channel.

YouTube TrueView Advantages

Advertisers only pay when someone watches the video.
There are many targeting options to get the message in front of the right audience.
Users who watch most of the video are doing so by choice, as they could skip them. This could indicate a higher level of engagement.

When to Use OTT and CTV

In recommending these tactics to your advertisers, here are reasons to push OTT and CTV:

Content is high-quality.
Driving brand awareness is a specific goal.
Their budget allows for premium advertising.
Videos tell the story better than static images.
Advertisers want big-screen exposure but want it in a more targeted way compared to traditional TV ads (CTV only).

When to Use Video Advertising

Advertisers have defined targeting criteria.
The ad goal is to drive traffic to a website.
Ad budgets won’t cover OTT or CTV.

When to Use YouTube TrueView

Customers have a very defined target audience.
Advertisers want to test out video ads and find it more valuable to pay for views than impressions.
For content, most of these will be awareness campaigns.

Get More Tips to Sell More Video

The opportunity to boost your sales with video is exploding! However, you may still have questions and concerns. We cover them all in our on-demand webinar Video Explosion! How to Sell More in 2021. Watch it today to refine your sales pitch.