The world has gone digital — and so has television, with the introduction of streaming services.

Ask any marketer, and they will tell you that more than 80% of consumers are now turning to streaming services instead of traditional TV stations.

The terms CTV and OTT now dominate the streaming landscape of TV advertising, and marketers absolutely must have a good understanding of the differences between them.

In this blog post, we’ll delve into the details of CTV vs OTT to provide you with the knowledge and skills you need to improve your advertising prowess.

Breaking It Down: What Are CTV and OTT?

Connected TV (CTV) as the name suggests, is television that connects to the internet. This smart TV draws the content directly from the internet, providing a combination of traditional TV and video-on-demand (VOD) services. Unlike OTT, CTV is constantly connected to the internet, and its content is controlled by the TV set owners.

Over-the-top (OTT), on the other hand, is a streaming service that delivers video content to viewers via the internet. With OTT, viewers can access content anytime, anywhere, without being tied down to cable or satellite providers.

OTT devices include game consoles, streaming sticks, and smart TVs that allow viewers to access third-party services such as Netflix, Hulu, Amazon, and Disney+.

OTT programming usually involves advertisement segments that are unique to the streaming platform. These advertisements have allowed advertisers to better target their audiences, in contrast to traditional TV advertising. Through the use of OTT, advertisers can easily identify their target audience based on geographical location, demographics, and interests.

The Key Differences Between CTV and OTT

Despite some similarities, CTV and OTT have different characteristics that are important to pay attention to.

While CTV is integrated into a TV set and usually connected to cable (but also has internet connectivity), OTT is a self-contained device that operates solely on the Internet. OTT services are typically used in place of traditional cable or satellite TV, while CTV users still often subscribe to these services (though they certainly don't have to).

CTV advertising is good for companies that sell high-value items such as real estate properties and cars, which require specific targeting and consideration by the buyer. The cost of advertising on CTV is usually higher because of its exclusive audience.

OTT, on the other hand, is more effective for businesses with a bigger and wider audience base that’s looking for a more cost-effective advertising solution.

That said, both can be used by marketers of all kinds — so it's important to be mindful of your audience and which methods might work best for your target demographic.

What Are the Advantages of CTV?

Connected TV advertising is growing rapidly, and its advantages for marketers are undeniable. First, it allows viewers to access traditional TV content with the addition of internet streaming.

CTV has also undeniably changed the way consumers watch their favorite programming. For instance, viewers can now stream movies and TV shows on demand rather than waiting for scheduled broadcasts.

CTV advertising also provides an immersive and large-screen experience, enabling advertisers to create interactive and visually appealing ads.

And finally, CTV offers a high level of targeting capabilities, making it possible to reach the right audience with specific demographics and interests.

What Are the Advantages of OTT?

Over-the-top advertising enables marketers to reach their audience through digital streaming services like Hulu, Netflix, and Amazon Prime. This type of advertising offers greater targeting flexibility and the added benefit of personalization, allowing you to alter your approach depending on individual user behavior.

OTT advertising provides a unique opportunity for marketers to avoid the risk of consumers skipping ads — since ad-skipping options are simply not available in most OTT streaming services.

As a result, advertisers can connect with their intended audience without the fear of being skipped.

Comparing the Cost of Advertising on Both Platforms

The cost of advertising on CTV varies depending on a few variables, including the ad format, targeting options, and location of the ad.

CTV advertising can range from $10-$50 per thousand impressions (CPM). However, if you are looking to target a specific audience, such as a local market, the cost may be higher due to the limited audience. Overall, CTV advertising remains an affordable option compared to traditional TV advertising — and provides better targeting options.

The cost of advertising on OTT platforms varies, again depending on the platform, ad format, and audience size.

Typically, the cost of advertising on OTT platforms is higher than on CTV due to the limited number of advertisements allowed.

On average, it's safe to assume that you will spend anywhere between $40-$60 CPM on OTT advertising. However, unlike CTV advertising, which provides targeting options, OTT advertising is not as targeted, so the cost may be a bit higher to reach a specific audience.

How to Choose Between CTV or OTT to Best Connect With Your Audience

Choosing between CTV and OTT advertising can be quite challenging, and it all depends on your brand’s objectives.

If you're looking for cost-effective advertising that provides targeted options, then CTV is the best option for you. However, if you are looking to reach a mass audience, with premium ads, then OTT advertising is the best option for your brand.

No matter what you decide, understanding the difference between CTV and OTT is essential for marketers who wish to get the best results from TV advertising.

With this knowledge, you can increase your profitability by leveraging the right advertising media - the right advertising media for whatever your unique goals might be, that is.

So go ahead - give it a shot! With CTV and/or OTV, you can turn every dollar spent into a higher ROI than you ever thought possible.