If you’ve worked in the media industry for even a second, then chances are either you have had difficulties understanding the differences between OTT and CTV at some point or know someone who still does. To address this issue, we’ve written this short article to talk about general definitions and differences between over-the-top video and connected TV. The article can be used as reference for future briefs and conversations we know you will have with your clients or internal teams.

OTT vs. CTV – Which one am I talking about?
Frequently, you may find these two terms being used interchangeably despite them not meaning the same thing. To avoid any awkwardness, here’s the tea:

OTT, short for over-the-top video content, is an umbrella term used to encompass all digital video content delivered across any device, whether it is desktop, mobile or any other. It covers all digital native video outlets, such as YouTube, streaming services, smart TV apps or set-top boxes.

CTV, short for connected TV, is any video streamed directly into a television, using either external hardware, such as set-top boxes or video game consoles, or software proper to the devices, such as the operative systems of smart TVs, that allow the TVs to connect directly to the internet and run video streaming apps.

As you can see, there are similarities in the use of the terms since both terms are considered to be part of the same conversation. But if you look a bit closer, then you’ll find key differences that will make you change directions and find different use cases for each, especially when building media strategies.

• The nature of connected TV is considered to be similar to linear TV because it’s part of a specific state in the users’ content-consumption journey where the subject dedicates their attention to a device where the sole purpose is to broadcast content.
• Opposed to this situation, OTT also involves other devices, such as laptop PCs or smartphones, where video content reproduction is part of a multi-app experience where several other processes are being run in parallel. For instance, smartphone users will see notifications from other apps and shift their attention to other content before going back to video engagement.
• Connected TV, at least in its current state, is a media channel designed to be focused on content consumption, which means there are very restricted capabilities of redirecting users’ attention to other media environments – no ad skippability, no clicks, just video content for the user to focus on. Some strategists find ways to go around that rule by adding on-screen QR Codes in the video. There are other companies, like Roku, that have rich media-like CTA cards added, but it’s mostly no-traffic redirection.
• For OTT, you’ll find a plethora of ways to redirect traffic from devices. Many of the OTT-specific partners, such as YouTube or Hulu, have specific products that are designed to add value to video by generating dynamic click cards that can redirect to different landing pages, depending on content or audience targeting.

Some data to support your interest in CTV/OTT
OTT market adoption, especially for connected TV, has been growing exponentially. According to eMarketer, TV streaming advertising in the U.S. has grown over 70% in the last five years to over $16B. Programmatic spend represents 50% of that spend.

For devices, according to IMARC, the North America smart TV market size reached $58.9B in 2022, and estimates show they will further grow an additional 15% in the next five years. There’s an estimated total of 190 million smart TV active devices currently in the U.S., a number that’s growing at a yearly 8% rate.

In comparison to linear TV, eMarketer also mentions that the number of U.S. users watching ad-supported video-on-demand (AVOD) surpassed 140 million in 2022, up 8.6% YoY. In the meantime, according to Statista, linear TV has 123 million viewers, a decrease of close to 10% in the last five years. This change does not mean the reach of linear TV is decreasing, since an estimated 67% of Americans enjoy a combination of cable TV and streaming apps and an estimated 75% penetration rate of linear TV occurs in the A35+ demographic.

All of this data is just the tip of the iceberg. Stay tuned for the next article where we’ll cover the current TV landscape and the current challenges of CTV advertising.