TV or Not TV? An Advertising Guide to Linear, Addressable, CTV and OTT

You've probably heard a lot of acronyms and buzzwords when it comes to the TV landscape. Addressable TV, linear TV, CTV and OTT are some of the most common ones, but what do they actually mean and how do they differ?

Let’s break down the basics and help you understand how they fit into the evolving world of TV advertising.

Linear TV

Linear TV is the traditional way of watching TV, where you tune in to a broadcast channel at a scheduled time and watch whatever is on. Linear TV is also known as live TV, cable TV or satellite TV. Linear TV has historically been the dominant form of TV consumption, especially for live events, news and sports. When it comes to advertising, linear has a few features to note:

• Less fine-tuned personalization: Linear TV offers the same content and ads to everyone, regardless of their preferences, interests or behaviors. This can, however, be refined by aligning ads with channel content (e.g. gardening ads are likely going to be well-received on a home and garden channel.)

• Lack of flexibility: Linear TV requires an audience to watch at a fixed time and place, and limits consumers’ ability to skip, pause or rewind. For some advertisers, this can be a benefit. Many consumers have their mobile devices out as ads are playing, and so catering ad formats to a “second screen” customer journey via QR codes or other interactive elements could be a novel way to capitalize on this.

• Broader measurement: Linear TV relies on ratings and surveys to estimate the reach and impact of ads, which is less granular and accurate than some other technologies.

Addressable TV

Addressable TV is a form of linear TV that allows advertisers to better target and deliver different ads to different households or devices within the same program or network.

Addressable TV uses data from set-top boxes, smart TVs or other sources to segment the audience based on various criteria, such as demographics, location, behavior or purchase history.

Addressable TV offers some advantages over linear for advertising, such as:

• More relevance: Addressable TV enables advertisers to show the right ads to the right people, increasing the chances of engagement and conversion.

• More efficiency: Addressable TV reduces the cost of showing irrelevant ads to uninterested viewers, improving ROI.

• More accountability: Addressable TV provides more granular and accurate data on the delivery and performance of ads, enabling better optimization and attribution.

CTV

CTV stands for connected TV, which refers to any device that can stream video content from the internet to a TV screen, such as smart TVs, gaming consoles, streaming sticks or boxes.

CTV allows viewers to access a variety of content from different sources, such as subscription-based services, ad-supported platforms, or apps. For advertisers, CTV offers some distinct benefits:

• More choice: CTV gives viewers more control and flexibility over what, when and how they watch, enhancing their viewing experience and satisfaction.

• Higher quality: CTV delivers high-quality video content, often in HD or 4K resolution, with minimal buffering or interruptions, enhancing the visual and audio quality.

• More interactivity: CTV enables viewers to interact with the content and ads, such as by clicking, searching, sharing or commenting, enhancing the engagement and feedback.

OTT

Arguably the most talked-about today is OTT. OTT stands for over-the-top, which refers to any content that is delivered over the internet, bypassing (“over the top” of) traditional cable or satellite providers. OTT can be accessed on various devices, such as CTV, smartphones, tablets or laptops.

OTT can be either subscription-based (such as the original forms of Netflix, Hulu or Disney+) or ad-supported (such as YouTube, Pluto TV or Tubi).

OTT has introduced some new features to TV consumption and advertising, such as:

• More diversity: OTT provides a wide range of content from different genres, languages, cultures and perspectives, catering to diverse and niche audiences and tastes.

• More innovation: OTT enables content creators and distributors to experiment with new formats, styles, stories and models, challenging the conventions and boundaries of TV and of advertising.

• More personalization: OTT uses data and algorithms to recommend and customize the content and ads for each user, based on their preferences, history and behavior.

The TV landscape is not as simple as it used to be - but it’s also more exciting and dynamic than ever. The advertising world has more options and opportunities to reach and engage its target audience, as well as more challenges and complexities to navigate and manage.

The key is to understand the strengths and weaknesses of each term and how they complement or compete with each other, and to adopt a holistic and strategic approach to win at a TV advertising strategy.