How have CTV and OTT changed the digital advertising landscape


Advertising and digital advertisements have had to adapt to OTTs and the increasing use of CTV. All in all, the best strategy seems to be hybrid.

Reed Hastings has already predicted it; the creator and actual director of Netflix, stated five years ago that in 15 or 20 years, linear TV would no longer exist. Although there are still consumers of conventional television, we are already beginning to see some elements of the digital world within linear TV.

Similarly, the CTV and OTT concepts have become significant in the world of marketing and digital video in recent years; both are often used synonymously; however, they refer to different elements that we should identify.

Let us describe the impact and difference between CTV and OTT below, how streaming comes into play in all of this, and how digital advertising has been making its way towards linear TV.

Differences between CTV and OTT

CTV stands for connected TV and refers to the entire experience offered by a television set with Internet access, either by direct connection or via a console; It is usually used as a synonym for smart TV, although the latter refers to the device itself.

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OTT, meanwhile, stands for Over-The-Top and refers to all video that is delivered over the Internet, which includes both live streaming and playback of server-hosted content. A common synonym for OTT is simply digital video platforms, which can range from sites like YouTube to applications like Netflix, including the creation of company-branded OTTs to distribute their own content.

We can access OTT services via various platforms, such as desktop computers, mobile devices (tablets and smartphones), and smart TVs. Consequently, the concept of OTT includes that of CTV.

Finally, let us remember that linear TV refers to television that follows a certain schedule (such as conventional TV), while non-linear TV has to do with “on-demand” consumption.

How do OTTs and CTVs bring advertising to non-linear TV?

The great challenge of digital advertising in OTTs is to offer ads that are consistent with the audiences. Similarly, it is essential to establish a business model for distributing our content: An ad-free subscription model, like Amazon Prime Video, or monetization via in-stream ads, like pre-roll and mid-roll?

It can also be a hybrid model like the one YouTube has established by offering the ability to subscribe and remove ads. Hulu has done something similar, offering types of subscriptions with or without ads for different prices.

As noted in this scenario, OTTs have had to diversify to monetize in CTV. Thus, in countries like the United States, the trend is clear, where it is estimated that targeted ads will reach an investment of 3.3 billion dollars by the end of 2020, an increase of 30% over 2019. Also, 15% of advertisers include targeted ads for OTTs and CTVs within their advertising plans.

In this way, advertisers are beginning to prioritize indicators such as CPM (cost per thousand impressions) over data such as traditional GRP (gross rating points).

But what about the case of linear TV? Is television feasible or possible?

Programmatic advertising on linear TV

Several companies have been able to identify opportunities in linear TV advertising but using the same formats and advertising elements as non-linear TV. Movistar+ is an example of this particular case, using its traditional channel in Spain, #0.

Via channel # 0, offered by Movistar even in its most basic TV services, advertisers will be able to buy highly segmented advertising to their viewers. The specific profiles of households and their television behavior patterns are considered for this purpose, thus achieving a more efficient use of digital data and then deploying it as programmatic advertising on their conventional TV channel.

Consequently, it seems that the best strategies will always be to diversify the advertising channels and strategies, making ourselves known via various platforms, either digital or conventional, but always making use of the latest technologies.