Congratulations! You’ve decided that the best use for your marketing dollars is to run a television commercial. Whew! Hard decision made; now you can kick back and relax, right? Not quite; you still need to decide between linear, OTT, and addressable TV.
Yes, thanks to the of rise streaming services and advances in technology, there are now more types of television advertising than ever before. This is exciting news because it means you have more opportunities than ever to deliver the right message to the right person at the right time. However, understanding the differences can be difficult.
At St. Gregory, we’re well versed in all of the different types of television advertising—linear, OTT, and addressable. Let us walk you through the differences as well as some things to consider as you make your decision.
Linear TV is the “traditional” way of watching television—watching a scheduled program when it airs on its original channel. Linear TV is not streamed over the Internet. It is accessed through an antenna, cable box, or satellite dish.
Linear TV can allow businesses to reach very broad audiences and may be a great option if the goal is to raise awareness.
Linear TV can also be a great option if your target market is an older demographic or in a geographic area where high speed Internet is not widely available. (For example, for our clients in Montana, where Internet connections are significantly slower than the national average, linear TV is frequently a good fit for television advertising needs.)
OTT, which stands for “over the top,” means that the commercial content is broadcast over the Internet. A good example of this would be ads shown on Hulu.
According to Smart “One of the main benefits of OTT technology for advertising is the ability to reach young target audiences and media consumers. A recent Nielsen study shows a 40% growth of cord-cutters in television consumption over the past five years among 18-24-year-olds.”
CTV (Connected TV)
CTV is another acronym you may have encountered. It is actually a subset of OTT, and the two should not be used interchangeably.
OTT is a delivery mechanism whereas CTV refers to the device. CTV is an internet-connected device that someone uses to watch television or video content. This could be a smart TV, a gaming console, or an AppleTV, just to name a few.
For example, if you’re watching Hulu on your iPhone, you’re consuming OTT content. However, if you’re watching Netflix on your smart TV, you’re consuming OTT content using a CTV device.
Depending on the device in question, a CTV device may also be used to consume linear TV. For instance, on a smart TV someone can stream Internet content, such as Netflix shows, and watch cable or satellite programs, assuming they have a subscription.
Addressable TV gives companies the ability to target people or households rather than programs. This means that an automotive company can show an SUV commercial to a household with multiple children and a pickup truck commercial to single men.
How important is the ability to target demographics rather than programs? The following information from TransUnion illustrates the point well:
“Forty years ago, you could buy the attention of 80% of America’s female population by running a single ad across the three major networks. Today, you’d have to run the same ad 3 times a day on 100 channels to have the same impact.”
In addition to reaching specific demographics, addressable TV advertising can help companies deliver different messages to people in different phases of the sales funnel. In other words, that automotive company could deliver different commercials to different households with multiple children based on other criteria such as household income or other behaviors that may indicate how close they are to shopping for that new car.
Addressable TV is primarily delivered through set-top providers (think cable boxes) and VOD (video on demand) services. This should be considered when deciding whether or not addressable TV is the best fit since very young audiences may prefer OTT services.
When trying to decide which type of television advertising is right for your business, it’s important to consider both the demographic you’d like to reach as well as the geographic area your ads will be running in.
For example, in the Cincinnati DMA, our data shows that the cable penetration is 52.3%. The remaining 47.7% of households consist of satellite subscribers, OTT viewers, and then people that just have an antenna.
Tip: It’s difficult to get exact OTT numbers, especially by market, because many OTT providers either don’t release any data at all or only do so on a national basis.
However, this shows that in Cincinnati you could reach over half of all viewers by targeting cable programs on linear TV. If your goals is to reach a wide audience and raise brand awareness, linear TV could be a good fit.
Linear TV may also be the best bet if you’re trying to reach older audiences.
Alternatively, if you’re in an area where high speed Internet is readily available and the demographic you’d like to reach is comprised of younger individuals, OTT may be a much better fit.
You also must take into account availability. This is specifically important with addressable TV, which is relatively new. Since it is new, addressable TV is not available in all markets.
Television viewers have a lot of of options when it comes to what to watch and when to watch it. This has given advertisers new ways to reach audiences. While all of the variety can feel overwhelming at first, it’s actually a fantastic opportunity to tailor your message to different audiences.
If you need help deciding how best to reach your target audience and achieve your goals with television commercials, contact St. Gregory today. We have decades of experience with media strategy, planning, and buying.