The terms linear and advanced TV are thrown around a lot these days, and you may be wondering: What’s the difference? And how do VOD, OTT, and CTV factor into things? We’re here to help you understand these acronyms, and more importantly, how they contribute to the current state of television, and how you can effectively leverage the impact of the industry’s largest media channel.
What Is Linear TV?
Linear/ Live TV is the traditional means of watching TV, in which a viewer watches a TV program on the channel it’s presented on at its scheduled time.
For example, if you watch “Blue Bloods” on CBS at 10pm ET on Friday when it premieres, that is considered a linear TV viewing experience.
What Is On-Demand TV?
You are probably familiar with on-demand TV, but here’s how it comes into play. On-demand is also known as non-linear TV, and refers to viewers selecting and watching content whenever they wish.
For example, if you watch “Blue Bloods” on your cable’s video on-demand (VOD) — or you DVR the “Blue Bloods” Friday night episode and watch it later — that is considered on-demand. If you watch “Blue Bloods” season one from several years ago on Hulu, that is also on-demand.
What Is Advanced TV?
Advanced TV is essentially all non-traditional TV. It’s the umbrella term encompassing OTT/ connected TV and addressable TV.
Connected TV, or CTV, refers to any TV that can be connected to the internet and access content beyond what is available via the normal offering from a cable provider. It also refers to devices that use a television as a display and can connect to the internet to access content. A smart TV is a television set with integrated internet — regular televisions can also be made “smart” through set-top boxes that enable advanced functions.
OTT is the term used for the delivery of TV and film content via the internet, without requiring users to subscribe to a traditional cable or satellite pay-TV service like a Comcast or Time Warner Cable. OTT leverages apps to stream video content to a TV using both on-demand and linear/live content. Examples of OTT devices are Apple TV, Roku, and Amazon Fire TV.
Subscription Video On-Demand Services
SVoD refers to services that give users unlimited access to a wide range of programs for a monthly flat rate. Examples include Hulu, Netflix, Amazon Prime Video, Sling TV, and YouTube Red.
What Is Addressable TV?
Addressable TV allows advertisers to purchase audiences, using household level profiling and segmentation to deliver different TV ads tailored to different households watching the same program. The software sits inside the DVR (set top box), allowing the network provider to serve custom ads to the households. Network providers include Comcast, Dish, DirecTV/ AT&T, Cablevision, and Verizon.
The Current State of Television Advertising
Now that you know what these various TV terms mean, you’re probably wondering how they all affect and contribute to the state of television advertising today. The pandemic accelerated the rise of streaming, condensing years of evolution into just a few months. While connected TV advertising makes up only a small portion of overall TV advertising, it is projected to grow significantly in the coming years as audiences continue to adopt digital streaming as their primary method of watching TV.
According to an article from Business Insider, advertisers will spend $19.9 billion upfront in the 2021-2022 TV season, an increase of 7.6% over the previous cycle. CTV surpassed all pre-pandemic projections and is now one of the most rapidly growing markets. This year, CTV ad spend will increase by 48% to over $13B, $6.7B of which will be bought programmatically.
Linear TV, on the other hand, decreased in importance to advertisers last year, “as cord-cutting accelerated and more programmatic CTV inventory became available than ever before.” As traditional linear TV viewing drops, marketers are increasingly turning to CTV: among US marketers with digital video in their media budgets, 60% said they were shifting ad dollars from linear TV to CTV and OTT this year. According to Tal Chalozin, CTO and co-founder of Innovid, “the mass migration of viewership from linear TV to streaming has created significant tailwinds for the [CTV] ad tech ecosystem which is now expanding into the public markets.”
As ad spend continues to increase, advertisers need to align with the market trends and reallocate budgets to the most effective channels to prove ROI and increase return on ad spend. Targeting the right audiences and measuring the impact of connected TV advertising through attribution will be critical for success. To learn more about how to best target audiences and measure OTT/CTV advertising, please reach out to Cuebiq to schedule a meeting.