Television has gone digital, with more consumers “cutting the cord” and forgoing expensive cable packages in favor of select streaming services and on-demand viewing. In the marketing world, this means advertising options have expanded beyond traditional TV buys, into more targeted, more attributable, and ultimately more accessible digital options.
But when is it best to explore this channel as a growing B2C or B2B technology company? In a recent article, we recommended Audio as the first alternative channel to test after establishing your online measurable performance marketing channels (SEM, Paid Social and other digital channels) and building a reliable and accountable foundation for new customer/lead acquisition. Now with the more measurable, targeted and accessible TV advertising options we’re about to cover, testing OTT/CTV video advertising is often the next best channel to test.
Linear TV, CTV and OTT Explained
“Linear TV” is the traditional TV many of us grew up with. Viewers watch scheduled programming at the time it is broadcast over the air, typically through satellite and cable subscriptions—although it can be recorded via DVR or other methods. While the number of paid US TV subscriptions has dropped by 2.7 million in the last few years1, linear TV audiences still make up the largest TV viewing segment. However, this segment will continue to shrink and evolve as more viewing options are becoming available and consumers are moving away from traditional cable and satellite subscriptions—into the new “cord cutters” segment.
“Cord cutters” are simply defined as a person who cancels or forgoes a cable television subscription in favor of an alternative internet-based or wireless service. OTT (“over the top”) and CTV (“connected TV”) together make up this growing “cord cutter” segment. While these two terms are often used interchangeably, when it comes to buying advertising, it is helpful to know the difference between them. OTT (“over the top”) refers to the delivery of TV content through the internet, aka streaming content, via services like Hulu, Netflix, Disney+. CTV refers to internet-connected TVs and devices (like a smart TV, hardware plugin, or gaming console). OTT content can in fact be viewed via CTV, for example streaming Hulu (OTT) through Google Chromecast or Xbox (CTV). OTT is definitely mainstream as 52% of all US adults over 18 use at least one OTT service.
Linear TV is typically bought through Upfronts, where media agencies and buyers purchase or reserve network media directly for upcoming TV seasons, often at a lower price. More recently Newfronts have been offered—the digital version of Upfronts—in which media agencies and buyers can purchase or reserve media for upcoming digital programming with OTT providers like Hulu or Disney+, as well as traditional TV networks on their digital or on-demand channels.
Linear TV can also be bought programmatically, but inventory is relatively low. OTT/CTV however has a higher percentage of inventory available through programmatic buying. Right now about 60% of CTV is being sold programmatically according to eMarketer. In fact, Amazon Fire TV, Roku, and Samsung accounted for over 65% of programmatic CTV impressions in 2019. The rest of CTV is sold through Newfronts (mentioned above), or held by networks or service providers and guaranteed for more traditional direct buys.
While programmatic buying can seem like the most economical, easy to execute, and easiest to directly attribute to sales, one complaint around programmatic TV, in general, is the limited visibility into where your ads are actually being shown. The tracking is very different across programmatic TV buying and cookie-based CTV ads as well. Each CTV service has its own system, and OTT content is viewed across multiple devices, which can make tracking difficult.
When it comes to media assets, OTT advertising typically consists of pre-roll ads and other video advertising that is shown to users while watching content, typically in the form of commercials during shows. But because CTV is tied to a device, it not only includes pre-roll and other video advertising shown while a consumer watches content using that device, but also includes advertising placed alongside other apps and shown on the device itself.
So, while CTV and OTT are often used interchangeably, a smart and experienced TV expert or partner will be able to help you decipher and take advantage of the difference.
Executing Your Campaigns
One of the key elements to running a successful OTT/CTV and programmatic TV campaign is access to inventory, and actively managing the ads through that inventory across every platform and every type of content. We recommend working with an agency to execute your TV advertising. While most agencies do not develop creative in-house, they all will have a short list of vetted creative producers they work closely with to create winning creative together. There are three agencies that dominate the TV buying space right now, they all buy across CTV/OTT and Linear, and can provide full service support:
- Tatari: Relies heavily on data, analytics, and predictive intelligence to inform media buying strategy.
- Media Design Group: Specialized in DRTV, clients typically range from Seed to Series C, but they service some big names as well.
- Bliss Point Media: Uses machine learning and algorithmic media buying as their pillars, to establish, optimize, and scale TV and streaming video campaigns.
For those looking to test into TV advertising on a budget—or who are already running TV campaigns but looking for ways to lower their average CAC—we recommend looking into remnant TV media buying companies with access to both linear TV and CTV/OTT inventory. One such agency we recommend is Last Minute Media Deals. Agencies like this, with access to relatively last-minute TV (linear and CTV/OTT) inventory, can secure deep discounts off standard rates—even up to 80% off.
Launching TV can be both costly and confusing. Understanding your options and working with a knowledgeable partner is typically the most cost-effective and efficient way our clients approach TV advertising. Our article on determining the best way to source resources and talent to manage new channels can also help.
For introductions to any of the agencies we have recommended, or if you are looking for additional resources or insights on which marketing channels you should be adding to your arsenal, and how to do it, check out our other articles below or contact us at firstname.lastname@example.org.
- Source: Fast Company
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