The terms linear and advanced television is frequently used these days, and you may be wondering what they mean. What role do VOD, OTT, and CTV play in all of this? We're here to help you decipher these abbreviations, as well as how they contribute to the present condition of television and how you can efficiently exploit the industry's most powerful media channel.

From OTT advertising to CTV advertising, this article explains everything you need to know.

What is OTT advertising? 

OTT (Over-The-Top) advertising refers to the delivery of ads through streaming media services provided over the Internet. These ads are shown on platforms such as Netflix, Hulu, and Disney+, bypassing traditional cable or satellite TV. An OTT service provider offers targeted advertising opportunities, reaching specific audiences based on data-driven insights. This method allows for more precise and personalized ad delivery, enhancing engagement and effectiveness.

What is connected TV (CTV)?

CTV (Connected Television) is a term that refers to a television that is connected to the internet.

A Connected TV (CTV) is a device that connects to — or is incorporated in — a television to allow for the streaming of video content. Xbox, PlayStation, Roku, Amazon Fire TV, Apple TV, and other CTVs are just a few examples.

How does connected TV advertising work?

CTV advertising is a private marketplace trade. Several stages of auctions are used in the programmatic digital ad ecosystem, with each level of the 'waterfall' having its own set of cost and accessibility conditions. The private marketplace inventory sale is merely one auction level above the open exchange, but it allows advertisers to access specific placements in a smaller auction with a greater win rate.

The private marketplace is invite-only and features several high-quality publishers. It also gives you access to inventory in specialized site parts, sub-sections, or unique formats that you wouldn't be able to find in an open auction. Display, video, audio, native, and connected TV are among the creative forms offered in a private marketplace.

Traditional TV advertising has been utilized for awareness campaigns by businesses since the channel allows them to reach highly engaged audiences. These advantages are available with connected TV, but it also allows for more precise targeting and inventory selection, resulting in a more efficient channel for reaching a larger market.

This premium auction is usually more expensive than usual and requires participants to pay a price floor or a high-priced minimum CPM—but worry not, the metrics that follow are frequently far more information of a successful campaign. Inventory availability and rates are subject to change.

The price of a connected tv

One thing to keep in mind when comparing connected TV to regular video advertising is that this premium ad space frequently requires participants to pay a price floor or a higher-priced minimum CPM. Although connected TV is sometimes 3–5 times more expensive than regular video placement, the CPCV for video assets is almost always lower.

CPMs for video range from $10 to $15, while CPMs for connected TV can reach $45 or more. While not the cheapest targeting strategy per unit (upwards of $65 versus $15), Connected TV is nearly certain to yield superior results in the form of lower-cost CPCVs.