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CTV and OTT in Advertising: The Difference and How to Leverage Them for Advertising Impact Explained

Streaming has changed how people consume media. With more households cutting the cord on traditional cable, Connected TV (CTV) and Over-the-Top (OTT) services have become the new way to reach audiences. But what do these terms mean, and how can advertisers make the most of them?

DW Creative is a Kansas City-based marketing agency that drives growth for clients by creating meaningful connections between their clients’ brands and the homeowners they serve. 

By reading this article, you will learn the definitions of CTV and OTT, how they work, and how businesses may use them for advertising.

Defining OTT and CTV


What is OTT?

OTT stands for “Over-the-Top,” or, more literally, “over the top of traditional cable. OTT content is delivered through an internet connection instead of through traditional cable or satellite TV services. 

OTT content is accessed through applications, giving viewers the flexibility to watch on their TVs, computers, tablets, or phones. If you’re using an application to view audio or visual content, you’re consuming OTT content. This includes applications like Youtube TV, Hulu, Netflix, and more. 

What is CTV?

CTV, or “Connected TV,” refers to any television that can connect to the internet to stream content. Many modern smart TVs contain built-in streaming apps, but even traditional TVs can become CTVs with devices like Roku, Amazon Fire Stick, or Apple TV.

As of 2023, 71% of households have a connected TV—a massive market for advertisers. Unlike other devices, CTV offers large-format, unskippable ads, making it an attractive option for marketers looking for guaranteed exposure.

What’s the Difference?

Essentially, OTT is the application used to stream media. CTV is the device that connects you to the internet and allows you to access OTT content. 


The Different Types of OTT Apps


Not all OTT platforms operate the same way. Here’s a breakdown of the main types of OTT applications you may encounter:

SVOD (Subscription Video on Demand)

  • Viewers pay a subscription fee for access.
  • Typically ad-free, but many are adding ad-supported tiers.
  • Examples: Netflix, Apple TV+, HBO Max, Prime Video

AVOD (Ad-Supported Video on Demand)

  • Free to watch but supported by ads.
  • Viewers can watch on their schedule as it is “on demand.”
  • Examples: Tubi, Pluto TV

TVOD (Transactional Video on Demand)

  • Pay-per-view or rental-based.

  • Viewers pay per movie or show.

  • Example: Renting a movie on Prime Video

FAST (Free Ad-Supported Television)

  • Free viewing but structured like traditional TV with scheduled programming (not on-demand).

  • Supported entirely by ads.
  • Examples: Roku Channel, Freevee, Tubi

vMVPD (Virtual Multichannel Video Programming Distributor)

  • Offers live and scheduled programming over the internet.
  • Similar to traditional cable but streamed via an app.
  • Examples: YouTube TV, Sling TV


Each of these categories presents different opportunities for advertisers. Knowing where your audience spends their time is key.

And infographic describing the different kinds of OTT applications


Why Advertise on OTT?


More people are streaming than ever before, and advertisers follow the audience. But what are the real advantages?

Pros of OTT Advertising

Massive Reach

Most households have some kind of CTV device and the OTT audience is steadily growing. Advertisers who ignore OTT and CTV ignore a growing pool of potential customers.

Better Targeting

OTT applications track users and interactions with greater detail than linear television. This allows advertisers to use audience data to place ads where they will be most effective.

Unskippable Ads

Unlike traditional digital ads, CTV and OTT ads often cannot be skipped (as an option), ensuring more views.

Challenges of OTT Advertising

Lack of Transparency

It can be difficult to know exactly where and when your ads are running.

Fragmentation

Each app tracks performance differently, making it hard to compare results.

There are services that will translate the different metrics into standardized ad performance data across platforms, but it can be very expensive to purchase. These programs sometimes cost tens to hundreds of thousands of dollars per year.

How to Advertise on CTV and OTT


With more and more users choosing to stream, CTV and OTT can be powerful tools for reaching a wide audience. But how do you purchase ad time? 

When it comes to buying ad space on streaming platforms, advertisers have three main options:

1. Direct-to-Platform

Direct-to-platform purchasing allows advertisers to work directly with a streaming service to place ads.

This method is best for brands with specific placement goals. For example, if you know your audience mainly uses Hulu, you would pursue advertising on the Hulu app rather than a less utilized application. 

While direct-to-platform may be pricier than other options, it gives you the most control over your ad.

2. Programmatic Advertising

Programmatic advertising uses automated systems to place ads across multiple platforms. This method gives advertisers a broader reach but less control over where ads appear.

Essentially, it may play your ad across multiple applications (which is good), but control over which applications it serves your ad is less transparent. When you purchase programmatic advertising, you don’t know if your ad plays on a popular or unpopular application or an application widely used by your chosen audience.

Here’s a possible scenario:

A luxury home remodeling company is running OTT ads to target affluent homeowners. They buy inventory through a programmatic DSP rather than directly from a premium platform like Hulu.

What Goes Wrong?

Because programmatic buys optimize for impressions and cost, the ads end up running:

  1. On low-quality, free ad-supported TV (FAST) apps like random gaming or trivia channels that don’t align with the brand’s premium image.

  2. During kids’ programming, where the audience has no interest in home remodeling (wasting ad spend).

  3. Next to controversial or inappropriate content, harming brand perception.

However, programmatic advertising is cost-effective for large-scale campaigns.

3. Private Marketplace (PMP)

PMP is a hybrid of direct and programmatic buying and provides a balance between reach and control.

How Local Advertisers Can Utilize OTT for Advertising


For small businesses, OTT advertising may seem overwhelming, but there are simple ways to track success:

  • Use UTM Codes: These help track web activity from streaming ads.

  • Use QR Codes: Viewers can scan them from TV ads for direct engagement.

  • 3rd Part Call Tracking:  Similar usage as linear TV tracking

  • Talk to a Marketer: Agencies can help navigate the complicated world of OTT

Next Steps for Advertising on OTT and CTV


OTT and CTV are not just trends—they are the future of media consumption. With most households having access to a connected TV, advertisers must learn how to leverage these tools effectively.

If you’re considering CTV and OTT advertising, keep these factors in mind:

  1. Consider Your Audience – Where do they spend their time? Are they on Hulu, YouTube TV, or Tubi?

  2. Examine Your Budget – Do you have the resources for direct platform buying, or is programmatic a better fit?

  3. Measure Your Results – Each app tracks data differently. How will you determine success?

  4. Protect Against Ad Fraud – Ensure your streaming partners use fraud protection services.  You want verification impressions are served to humans, not robots.

To make the most of your streaming ad budget, work with a marketer who understands this landscape and can ask the right questions. Whether you go direct, programmatic, or through a private marketplace, staying informed will help you reach your audience where they are watching.

If you’re looking for help creating marketing videos, schedule a fit call with our team to see how DW Creative can help.

If you’re not ready to make a commitment or want to learn more about purchasing media, we recommend the following articles: 

 

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