CTV vs. OTT: What’s the Difference and Why Does It Matter?

remote control pointing to a TV screen

As streaming TV continues to grow in popularity, more and more brands want in on the advertising benefits. But there’s a lot of confusion around terminology in this new channel, and it merits discussion. OTT and CTV, while related, are not the same. And if you’re planning to advertise with streaming services, you should know the difference.

What Is OTT?

OTT, otherwise known as “over the top,” refers to media that can be viewed on computers and mobile devices, in addition to on the TV screen. Everything changed when our favorite old-school shows began streaming over the internet in addition to broadcast, cable, or satellite. It was used in the early days to refer to streaming TV shows because mobile and desktop were being used to watch these shows in addition to, or “over the top” of, linear TV. Netflix, Hulu, and Disney+ are all OTT examples of services; you can watch all of their content on demand on any device.

What Is CTV?

A few years ago, TVs were connected via gaming consoles or set-top boxes, but now most TVs come with direct connections to the internet and have pre-installed apps for streaming services. Either of these scenarios represents what we refer to today as CTV, or “connected TV.” It’s essentially just a TV that’s connected to the internet. If you’re streaming content on your television, then you’re watching CTV.

Both CTV and OTT refer to streaming video, but one is limited to the TV, whereas the other refers to streaming video over just about any device with a screen. OTT covers all streaming content, no matter how or where you watch it. You don’t need a box, a subscription, or even a TV. CTV is limited to video streamed on a TV. So, ultimately, CTV is a subset of OTT.

Why Does It Matter?

When it comes to advertising via CTV or OTT, it’s important to understand the difference between the two. The easiest way to distinguish them is this: OTT is a delivery mechanism; CTV is the device on which the content is consumed. Here’s an example that might help clear up some of the confusion: As mentioned earlier, Hulu is an OTT service. You can watch it on your phone, tablet, or laptop – or you can watch it on your connected TV (CTV).

Why Advertise on OTT and CTV?

If you’ve been considering programmatic advertising within streaming content, keep reading. Obviously, OTT and CTV work together here. OTT services will provide the content, but if you’re looking to reach cord-cutters where they live, you’ll want to focus on CTV.

One of the key benefits of CTV advertising is that you’re reaching the growing number of cord-cutters. Today, just over half of U.S. households – about 56% – subscribe to a cable or satellite service. At the same time, 80% of households have at least one CTV device.

CTV gives advertisers the power to reach and engage streaming audiences while they’re leaning into their favorite pastime. Brands can use the same data-driven targeting to reach their audiences, but with the advantage of longer-format video ads on a huge screen. Even better, advertisers have access to metrics that traditional TV advertising simply can’t deliver, along with the ability to leverage dynamic creative and adjust on the fly.

While advertising on CTV offers more control and accountability than linear TV ads, it’s important to remember that it’s also very different from programmatic advertising on other screens. There’s no clicking, tapping, or swiping on a TV screen, so brand awareness and product awareness are excellent goals for your campaigns in this medium. If you do choose to focus on lower-funnel or direct response advertising, keep phone numbers and URLs simple, or consider experimenting with a QR code that viewers can quickly scan with their phones.

Of course, all OTT advertising is valuable – people watch shows on a broad range of devices. But CTV gives brands the opportunity to reach viewers who are really focused. TV is a lean-back environment. You may be able to reach the whole family sitting in their living room, and even spark a discussion that centers around your brand, product, or service. CTV delivers a unique opportunity that can’t be matched on other devices. It’s a powerful, additional touchpoint for any campaign.