As the old adage goes, “There are decades when nothing happens, and there are weeks when decades happen.” Over two years ago, a once-in-a-century pandemic came out of nowhere, reshaping everyday life. Confined to our homes, we suddenly had to explore new ways of connecting and entertaining ourselves—online. Consumers rapidly adopted new media channels with connected TV (CTV) at the forefront.
A Nielsen report found that CTV viewing dramatically increased by 81% year-over-year from 2019, reaching nearly 4 billion hours per week by early April 2020. Between 2011 and 2019, the annual increase in CTV usage barely shifted, but between September 2020 and 2021, the share of time spent on devices jumped from 26% to 32%, and it’s projected to reach 36% in 2022.
Currently, 83% of US households have a CTV device, with a total of 223 million projected US users in 2022. And 4 out of 5 households now have a connected TV in Europe, with viewers moving seamlessly between traditional and digital formats. So much so it is thought by PubMatic that 71% of audiences watch both linear and CTV content simultaneously. Attracted to the range of high-quality content easily accessible through CTV, many consumers are even becoming “cord-cutters,” canceling their traditional cable and satellite subscriptions. The number of cord-cutters in the US will grow to 103.3 million by 2025, from 77 million in 2021.
The CTV trend is here to stay, so advertisers need to know how to make the most of emerging opportunities in the changing TV landscape. It’s easy to get confused, and I often hear questions like:
- What is the difference between CTV and OTT?
- Does OTT include mobile apps?
- Is AppleTV an example of CTV or OTT? Or both?
We’re here to help, breaking down the basics to give you a crash course in CTV.
What is CTV?
A connected TV (CTV) is a device connected to (or embedded in) a television, used to stream digital video. CTVs can include smart TV platforms, streaming devices like Roku, Apple TV, Amazon Fire TV, and Chromecast, or video game consoles such as Xbox, PlayStation, and Nintendo.
In digital advertising, this new channel allows advertisers to insert their video ads in streamed digital video. With broadcast television becoming increasingly digital, advertisers can now tap into the power of digital, while also reaching their audiences watching more traditional television content.
What is OTT?
OTT stands for “over-the-top” and refers to content delivered over the internet via streaming services or apps. Netflix, Prime Video, HBO Max, Hulu, Apple TV, and Disney+ are all examples of OTT apps. OTT differs from CTV because the service can be consumed on any device with an internet connection versus a TV set connected to the internet. OTT video services can be viewed on CTV devices and other devices such as smartphones, desktops, or tablets. While CTV and OTT are often used interchangeably, CTV refers to the TV device that streams content, whereas OTT refers to the content streamed on a range of devices.
What is linear TV?
Linear TV, or traditional TV, is the 24/7 line-up of programming available to view as it airs. It is delivered to viewers free of charge over-the-air with a digital or terrestrial antenna, through pay-TV provider technology (set-top box, IPTV, satellite dish), and increasingly via CTV (e.g., Amazon Prime, YouTube TV, Hulu, fuboTV). Programs can be recorded with a DVR to watch later.
Linear TV maintains its place as an important influence in global media, especially when trying to reach older and often more affluent audiences. Most of consumers’ TV watching hours are still viewed through broadcast TV, and it remains the single largest advertising vehicle across all countries and industries. Certain content types are simply built for linear TV, such as live sports and news TV programs. But people also are increasingly favoring the experience of on-demand viewing, which enables them to pick and choose what they want to watch when they want to watch it.
When developing an effective advertising strategy, you shouldn’t be asking whether to focus on either CTV/OTT or linear TV. You should be looking for the right combination of both channels, based on where and how your audiences are spending their time. In the second part of our CTV blog series, we will delve into this topic, offering tips for expanding and diversifying your ad spending mix with omnichannel activation.
We’ve expanded our Quantcast Academy with a new module on connected TV. You can also check out our case study to find out how Jack’s Family Restaurants have increased their foot traffic twofold with CTV.