CTV vs OTT Advertising - A Comprehensive Comparison

What is CTV/OTT?

You may have noticed your audiences migrating from network television to digital platforms via internet-connected TVs and mobile devices. These days, consumers prefer visual storytelling. Meanwhile, advertisers must continue to leverage data to boost campaign efficiency. These combined market forces drive the popularity of Over-The-Top (OTT) and Connected TV (CTV) with brands and audiences alike.

While your advertising executive might use CTV and OTT interchangeably, referring to the delivery of advertisements over internet-connected devices, they are two different parts of the same ecosystem. Both OTT and CTV leverage data-driven precision to power digital advertising, which enables targeted campaign delivery and real-time KPI (key performance indicator) measurement. Unlike traditional TV, these platforms deliver a new level of flexibility by offering various ad formats and content lengths to mirror the diverse viewing preferences of their modern audience.

Key Features of OTT

OTT or "Over-The-Top Advertising" refers to the sponsored content, including video advertisements, that streaming services play before, after, or during any content you're watching on their platform. Think of them as commercials that bypass traditional cable or satellite TV services. Unlike traditional TV, OTT breaks down geographical barriers and gives users more freedom to access content on various devices, from smartphones to smart TVs.

OTT platforms also offer diverse content lengths, from short snippets to extensive series, adapting to varying audience preferences. In addition, OTT excels in interactive capabilities, fostering engagement and personalization, including options for skippable ads that give viewers control over their content consumption. OTT platforms include Netflix, Amazon Prime Video, Hulu, and many more. These streaming services provide even more control to audiences by allowing them to tailor the viewing experience to their schedules while ensuring a relevant ad experience.

Key Features of CTV

On the other hand, CTV, or "Connected Television," refers to television sets connected to the

Internet that access streaming services and apps. Examples of CTV providers include Amazon Fire Stick, Roku, and Apple TV. CTV is a subset of OTT, representing OTT content delivery on a television screen. CTV ads seamlessly integrate into long-form content, offering a similar experience to traditional television, but with ads tailored to the viewer’s specific interests based on recent web searches, purchasing habits, and more. Because CTV adheres to conventional TV lengths and has limited engagement features, it is best used for brand-building content that establishes an organization’s identity and reputation rather than driving conversions.

The big-screen experience is a standout feature, allowing advertisers to engage audiences on a cinematic scale. The user experience is marked by a 'lean-back' approach, offering a cohesive and uninterrupted content flow distinct from the fragmented nature of digital platforms. CTV's versatility, combining traditional TV impact with digital adaptability, makes it a compelling arena for marketers to deliver engaging content and connect with audiences on a larger scale.

OTT/CTV Advertising Strategies

Although OTT and CTV channels have different capabilities to consider when building campaigns, there is a significant strategic crossover that can allow your cannabis brand to engage audiences on a deep and meaningful level.

Targeted Content

The most successful Over-the-Top (OTT) and Connected TV (CTV) advertising campaigns prioritize content. Compelling content starts with a deep understanding of your audience through data.

By meticulously segmenting your audience based on demographics, interests, and behaviors, you can tailor campaigns to resonate with specific viewer groups. The relevant topics that drive your content creation strategy should align with trending themes or deliver value by addressing specific viewer needs. To illustrate this idea, imagine that your marketing goal is to increase the sales of a dispensary’s white-label brand. Using a programmatic platform like Demograph, that leverages age gating, you can separate government-verified 21+ audiences into three categories based on their purchase history; most likely to buy flower, extracts, or edibles. Now that you understand which products each segment prefers, you can serve more relevant ads that feature distinct product categories to legal audiences.

Retargeting

Even with the most strategic content, most of your audience will only convert into customers once they've seen your brand more than once. This Forbes article explains, “The Rule of 7 states that it takes an average of seven interactions with your brand before a prospect will decide to take action.” By engaging with your target customer and delivering relevant and engaging content in various places through myriad mediums, you earn brand recognition and begin to build trust. Through OTT remarketing, you can provide a consistent brand experience on different streaming platforms and build up a viewer's organic engagement as they transition between platforms.

Ad Sequencing

Ad sequencing is a storytelling strategy that delivers ads in a cohesive order over multiple touchpoints, maintaining viewer interest. For example, if you are launching a new product, you can sequence ads to introduce the product in one ad, highlight differentiating features in the next ad, and conclude with a compelling call to action ad. When narratives unfold gradually with sequential storytelling, you can keep viewers engaged over time and reduce ad fatigue.

Benefits of OTT/CTV Advertising

• Advanced Targeting Capabilities:

Advanced targeting capabilities enable marketers to pinpoint specific audience segments based on demographics, behavior, or real-time data. This precision ensures that ads are delivered to the most relevant viewers, optimizing the overall performance of advertising campaigns.

• Comprehensive Analytics and Reporting:

Platforms offering advertising services provide comprehensive analytics and reporting tools with deep insights into campaign metrics, audience engagement, and conversion rates for a comprehensive understanding of a campaign's effectiveness.

• Real-Time Optimization:

The data-driven approach enables real-time optimization of advertising strategies. Marketers can adjust their strategies in response to changing trends or behavior.

• Integration with Data Sources:

Streaming platforms facilitate advertising integration with first-party and third-party data sources, enhancing overall targeting capabilities.

Challenges of OTT/CTV Advertising

• Ad Fatigue:

Balancing ad frequency is crucial to prevent viewer fatigue, which happens when viewers are overwhelmed by seeing the same or similar ads too often. Learn more about Ad fatigue from Hubspot.

• Measurement Inconsistencies:

When using different CTV and OTT platforms, advertisers may find it difficult to standardize metrics across the various platforms.

• Fragmented Audiences:

When an audience is spread across several streaming services, this poses challenges for advertisers to navigate the fragmented landscape.

• Ad Format and Length Considerations:

Striking the right chord with viewers in a limited time can be challenging. Varied ad formats, including skippable options, cater to viewer preferences. Advertisers must tailor formats and lengths to resonate with the audience.

• Device Compatibility:

Ensuring compatibility with different devices and screen sizes adds a layer of complexity to advertising strategies.

• Privacy Considerations:

Rising privacy concerns and regulations necessitate transparent practices to maintain viewer trust and ensure compliance in regulated industries like cannabis and CBD.

When facing these challenges, the right partner will be a guiding force, adeptly navigating the intricate landscape of OTT/CTV. They’ll have experience in resolving complexities and transforming obstacles into opportunities for seamless, effective digital advertising.

OTT & CTV Advertising Best Practices

Like any other advertising tool, CTV and OTT serve as dynamic mediums to captivate audiences in the digital era. To maximize their effectiveness, advertisers need to navigate diverse scales and ratios, explore interactive options, and leverage the power of data analytics for thorough testing and strategic optimization.

Formatting and Scale

Because OTT has a wide range of ad options, creating compelling content requires appropriate formatting for each medium. Optimize your visuals for living room televisions to align with a cinematic CTV experience.

Then, consider the versatility in content sizes, ratios, and CTAs when designing your OTT placements. Otherwise, audiences will notice that your ads feel out of place in the specific environment where they are serving.

Data Analysis

Analytics and measurement are vital. To refine and optimize your advertising strategy on streaming platforms, you’ll need access to data. Cross-device measurement is crucial for understanding viewer behavior across their various entertainment devices.

Use data insights to understand viewers' engagement with their CTV and mobile device content. This in-depth understanding informs better strategic decisions and optimizations, which we discuss on our webinar, Unlocking Competitive Advantage Through Data Analytics and Customer Data Enrichment.

Testing

Implement A/B testing to understand what resonates best with your audience. Test different ad formats, messaging, and creative elements to identify the most effective combinations. For instance, if you are advertising on a new streaming service, test ad copy variations to determine which messaging drives higher engagement with the demographic segments who are drawn to this new service.

Ad Frequency

Delivery practices ensure your ads achieve maximum impact without overwhelming viewers. We’ll say it again: Managing ad frequency is critical to prevent viewer fatigue. Adjust pacing based on viewer behavior patterns to maintain optimal engagement. For example, if promoting a weekly event, pace your ads to coincide with the days leading up to the event for heightened awareness.

Ready to Get Started with OTT/ CTV Advertising?

From its inception to the current landscape of Connected TV and Over-The-Top, video advertising has evolved into a transformative force, captivating audiences with engaging content. The dynamic interplay between CTV's immersive, big-screen appeal and OTT's adaptable, interactive nature showcases the evolving nature of audience engagement.

Advertisers must navigate these platforms adeptly and with precision to drive audience engagement—from precise targeting to deepened analytics and more nuanced delivery strategies. This comprehensive comparison emphasizes the significance of CTV and OTT in modern digital marketing, as it embraces user-centric, data-driven storytelling on versatile and impactful platforms. Curious to see Demograph in action? We’ll show you how to get started. Schedule your free demo here.