Pros and Cons of Advertising on OTT, CTV, and Linear TV
Deciding where to put your television advertising dollars comes with a lot of questions and more options than ever before. These days, television can mean a lot of things. Streaming, cable, network, smart TV. So advertising on television even comes with a lot of options. Let’s take a look at OTT, CTV, and linear TV to understand more about what each platform means and the pros and cons of advertising on each one.
What is OTT?
OTT means “over the top” media. This is like your standard streaming services, think Netflix, Hulu, HBO Max, Apple+, Amazon Prime Video, and more. These days, streaming is one of the most popular and fast-growing platforms for media and advertising.
Pros to Advertising on OTT
Younger audiences are increasingly subscribing to streaming services, and it’s the fastest-growing television category. Recent statistics show that linear TV usage dropped nearly 25% in the past year for people between the ages of 18-34. That’s a big chunk of the market. Additionally, ad-supported services grew, showing that people are more likely to pay less for a subscription even if it means their shows are ad supported. A few minutes of their time in order to have a less expensive streaming service isn’t a bad tradeoff. Lastly, advertising on streaming services means a more tightly targeted demographic for your ad, and easier tracking for results as opposed to just knowing how many viewers saw the ad, like you would on traditional TV.
Cons to Advertising on OTT
If your target demographic leans towards senior audiences, they might not be the most tech savvy or up-to-date on streaming technology and connected entertainment. A lot of this technology is relatively new, so older audiences might be more prone to sticking with a cable subscription or be more likely to watch network television programming. A recent survey shows upwards of 60% of audiences 55 and older still use linear television as their primary platform.
What is CTV?
CTV means “connected TV.” This can include streaming (OTT) but also means smart TVs. This is a smaller category—think of an Apple TV, a Roku stick, or a Chromecast box. While OTT and CTV are not the same, CTV can be thought of as a subset of OTT. A connected TV can connect to the internet and can stream multimedia content. This platform allows ads to stream over multiple devices.
Pros to Advertising on CTV
Since ads are the primary source of revenue for streaming services, advertising on OTT or CTV is a great idea. Brands and organizations have the benefit of multiple people watching an account in the same household (or, let’s be real, sharing a password in multiple households). This also allows consumer tracking, whether we like it or not. Because CTVs share an IP address with other household devices, the ad-to-action pipeline is more streamlined and easy to track, allowing you to see your ROI in a simple way. CTV is also one of the highest quality programming, since CTV content is just a small percentage of streaming programming. This is naturally associated with a higher quality of content, helping make that elevated connection for viewers.
Cons to Advertising on CTV
Conversions are the trickiest part of advertising on CTV. Since most people are sitting down in their living room with their smart TV, they might be more likely to willingly sit through an ad, and it’s going to look nicer on the high-resolution device. However, CTV ads are not clickable. This means one more step between getting your ad onto the screen and actually attracting conversions. Offering follow-up incentives (reduced rates, referral perks, etc) as part of this ad package can be a good way to encourage follow-up even without a clickable ad.
What is Linear TV?
Linear TV refers to the classic television system where the viewer or subscriber watches a television program at a specific, scheduled time. This is like classic cable or satellite TV. This also includes networks. Basically anything where the viewer turns on the TV and watches whatever the heck happens to be playing.
Pros to Advertising on Linear TV
Advertising on linear TV allows you to target live events. While CTV and OTT mean people can stream shows at any time, many users appreciate linear TV for its broadcast of live events as they happen, from the Olympics, to the Super Bowl, to live news broadcasts. While linear TV is more broad than a targeted ad on a subscription streaming service, this does still allow you to narrow down your audience by carefully choosing the programming and time of day you run your ad. Each show, live event, or programming category comes with a specific demographic, and by targeting the demographic most likely to relate to your ad, you run a better chance of action from your ad.
Cons to Advertising on Linear TV
Linear TV doesn’t have the market share it once did, though it’s still the platform of choice for older audiences. Since frequency is important with ads, it can be more expensive to pay for consistent slots on linear television compared to streaming. It’s also challenging to make changes to your ad for these platforms, and you should expect the ad to run for an extended period of time. This is also a more difficult platform for specific targeting. Your audience might be wider, but there’s no guarantee you’ll hit your targeted demographic, and it can be harder to track results.
There you have it! There are pros and cons to all three programming platforms, and deciding which is best for your business depends on your goals, budget, and targeted audience.