Connected TV (CTV) is one of the hottest channels available for advertising, with ad spending projected to reach $19 billion by the end of this year. However, in today’s fragmented TV landscape, plenty of confusion remains around what is CTV (and what is not).
We’re here to help. Read on to learn what separates CTV from linear TV and OTT, and gain a deeper understanding of all the acronyms surrounding this exciting channel.
What Is CTV (and What Isn’t)?
Linear TV is the traditional broadcast form of television while CTV refers specifically to video content streamed over the Internet and watched on a television set. Many consumers don’t discern between the two mediums, but their differences are clear to most marketers.
The key to understanding, “What is CTV?” lies in understanding the more subtle differences between CTV and OTT. Short for “over the top,” OTT refers to video content streamed over the Internet and consumed on any device. The two terms are often used interchangeably, which is incorrect and very confusing.
All CTV is OTT, but not all OTT is CTV.
The common denominator is the device. CTV is viewed on the TV set, the largest screen in the household. Because computers, smartphones, and tablets have their own screens, they are inherently not CTV. In other words, OTT is the “what” (content) while CTV is the “where” (device).
CTV devices include:
- Smart TVs. These TV sets are connected to the Internet and preloaded with an operating system, programs, and apps. Smart TVs don’t require any other equipment, though they can connect to other devices.
- Streaming devices. A streaming device plugs into a TV set and connects to the Internet. Streaming devices are also preloaded with apps, enabling a regular TV to act as a smart TV. Examples include Roku, Fire TV Stick, and Chromecast.
- Gaming consoles. Nintendo Switch, Xbox, and PlayStation devices aren’t just for playing video games. They also work as streaming devices connected to the TV set.
- Set-top boxes. Like a cable box, set-top boxes receive and decode broadcasts, enabling viewers to use their analog TV sets to stream digital content from specific providers. Examples include DirecTV receivers and SysMaster’s Tornado.
Advertising on CTV: An Alphabet Soup of Acronyms
To have a strong sense of what is CTV and CTV advertising, it’s important to understand the alphabet soup of acronyms for the several subcategories of OTT services:
- Ad-supported video-on-demand (AVOD): AVOD platforms allow users to view content for free or at a reduced cost in exchange for watching advertisements. YouTube and Crackle are some of the most well-known free examples. Other platforms — Hulu, Peacock, and Paramount+ to name a few — have AVOD offerings as well.
- Subscription video-on-demand (SVOD): Some streaming services are premium subscription-based, which means users pay a monthly flat rate to view content without advertisements. Examples include Netflix, Disney+, and HBO Max. But it’s important to note that these platforms will begin to include ad-supported tiers, joining the likes of Hulu, Peacock, and Paramount+ in offering SVOD services for a higher fee.
- Transactional video-on-demand (TVOD): Unlike AVOD and SVOD, TVOD works on a pay-per-view basis. Without subscriptions, viewers consume content a la carte on platforms such as iTunes or for non-Prime members, Amazon.
- Free Ad-Supported Streaming TV (FAST): FAST apps deliver linear TV viewing experience through connected devices. Where AVOD is one-to-one on-demand viewing, FAST content streams live to many people. Think Samsung TV+ or Fox’s Tubi.
- Virtual multichannel video programming distributor (vMVPD): CTV is to OTT as FAST is to vMVPD. Similar to FAST channels, vMVPDs are hubs of linear TV content. The main difference is, there is a fee attached not dissimilar to cable TV vs. broadcast TV.
To learn more about the basics and benefits of CTV advertising for pharma, download Seeing TV Differently: A CTV 101 Guide for Pharma Marketers.