A Definitive Guide to CTV/OTT Ads

What’s the Difference Between CTV vs. OTT?

CTV stands for “Connected TV,” as in being “connected” to the internet. While today’s Smart TVs include internet connectivity and the ability to stream content via apps, Connected TV also includes Roku, Amazon Fire Stick, Apple TV, and PlayStation devices that allow for internet connectivity on TVs. 

OTT stands for “over the top” to refer to the content that can be streamed over the internet from devices such as Connected TVs, smartphones, and tablets. For example, your favorite shows on Hulu, Amazon Prime Video, Disney Plus, etc. are all examples of OTT content. 

Additionally, you may have also seen or heard of AVOD and SVOD. AVOD is an acronym for “ad based video on demand," while SVOD means “subscription video on demand.” 

The key difference here is that users are able to watch AVOD content for free in exchange for watching ads (like free YouTube content), whereas SVOD users pay a subscription fee to watch content in addition to also watching ads (such as Hulu’s subscription video package including ads for a lower subscription fee). 

How do CTV Ads Work? 

CTV ads work similarly to other online video ads. Thanks to digital marketing’s ability to target specific audiences, CTV ads have the benefit of being able to reach your desired audience at the right time and place. 

By reaching your audience across their favorite online video content, your business can leave a lasting impression. To ensure you’re making the most of your digital advertising budget, CTV/OTT ads can target and retarget users by device, time of day/week, location, demographics, behavior, and more according to your business goals. 

These ads are measured by metrics such as:

• Impressions: The number of people who received your ad.

• Video completion rate (VCR):  The percentage of people who watched your ad to completion. 

• View through visits: The percentage of people who watched your ad and later completed an action on your website (measured via pixel implementation).

• Conversions/engagement: The percentage of people who engaged with your ad and/or became customers. This can be measured by implementing a pixel to track viewer actions.

CTV/OTT Ad Types 

There are three main ad types within Connected TV, which include: 

• In-stream video ads: Unskippable ads ranging from 15-30 seconds. These ads can play either before or during OTT programs. In-stream ads are quick and budget friendly ways to create or repurpose your business’ existing broadcast ads for Connected TV.

• Interactive Pre-Roll ads: These ads are similar to in-stream ads, but also give viewers the option to click through to a landing page for your business. For instance, if you own an auto dealership, this ad could direct viewers to a landing page where they could schedule an appointment to view a promoted vehicle in person. 

• Home Screen ads: These ads are located at the home screen. They most often feature an image or short video, and typically include a call to action for viewers, such as a “learn more” button. 

Why Should You Use CTV Ads? 

A November 2020 poll from the Interactive Advertising Bureau (IAB) found that 60% of U.S. advertisers planned to shift ad dollars from linear TV to either CTV or OTT in 2021. 

Why exactly are businesses and marketers alike betting on CTV marketing? Let’s take a look below!

What are the Benefits of Using CTV/OTT Ads?

Precise Targeting 





As we mentioned earlier, CTV/OTT ads can target and retarget users according to specific criteria that aligns with your marketing and business goals. With the ability to target by device, time of day/week, location, demographics, behavior, and more, you can ensure that you’re honing in on the exact consumers you want to reach. 

This is not only helpful for targeting users once, but also for retargeting them. For instance, if a user has shown interest in your business or businesses similar to yours, you can make sure you reach them again to stay top of mind and increase their likelihood of choosing your business.

Reach Growing Hispanic Audiences 

U.S. Hispanics are avid tech users -- in almost every instance, Hispanics over-index when it comes to ownership of tech devices. Two-thirds of Hispanics own an enabled Smart TV, making them 25% more likely than the total US population to own one. That being said, if you’re running CTV ads, reaching Hispanic audiences is a must! 

Given that Latino audiences over-index when it comes to Smart TV ownership, it comes as no surprise that this group’s video streaming penetration is above-average compared to the general U.S. population. Nielsen reports that in 2020, roughly 78% of Hispanic households have at least one video streaming service, compared to 74% of total US households.

The pandemic without a doubt accelerated the amount of time people were spending on streaming services -- and this rings especially true for Latinos. Seven in 10 reported that they have increased the amount of time spent watching movies or shows using a streaming service, compared to only 55% of non-Hispanics who reported doing the same. 

If you aren’t already using Hispanic digital marketing to grow your business, the time is now. Thanks to advanced targeting, you can also specify language preferences for maximum resonance and impact within the Latino community.

Learn more by checking out our post about the benefits of using online streaming ads to connect with influential Latino audiences, and  get our free eBook to find out more about the best ways to reach them. 



Cost-Effective

Another reason CTV marketing has become a favorite in recent years is thanks to its cost-effectiveness. Traditional TV ads can be pricey, and they don’t necessarily guarantee that your business will reach its target audience. 

For example, your business might run an ad across TV programming that might align with your specific product or service, in hopes that viewers of that program would be inclined to learn more about your business. However, thanks to CTV’s targeting abilities, your business can get much more specific and guarantee that you reach the right audiences who are more likely to engage. 

Additionally, viewers tend to tune in to OTT content for new releases and other exciting program updates, where group viewing is common. This means that your CTV ads are more likely to get in front of more viewers at once -- which can lower your overall cost per impression. 

Live Metrics 

CTV marketing can allow you to view your metrics and optimize accordingly in real-time, unlike traditional TV ads that adopt a “set it and forget it” approach. 

Thanks to metrics such as conversions, impressions, video completion rates, and more, CTV marketing allows marketers to gauge their ad’s live performance and optimize -- which can provide better campaign results and have the added bonus of maximizing the campaign’s overall return on investment. 

Speaking of metrics, view first hand examples of digital marketing done right by checking out our client success stories here.

Engaged Audiences 

Ads on Connected TV often air during peak programming, since viewers often turn to their Connected TVs during new show releases, season finales, live major sporting events, concert live streams, and more. 

Placements during these moments can get your business in front of highly engaged audiences to make a lasting impact and have a higher chance of conversions. 

Smart TV viewers, especially across prime programming, also have more of a say in how they interact with the ads they receive thanks to the option to choose the ads they watch. This can result in higher engagement, better brand trust, and overall more positive ad experiences -- making it a win-win situation for everyone involved. 



More Ad Type Options

CTV/OTT ads give your business more options when it comes to the ads you show consumers, which can more closely align with your business goals. 

Want to raise awareness for your products or services? In-stream ads are a quick and effective way to do so. Looking to drive more engagement and conversions? Interactive pre-roll ads could be your best bet. 

While traditional TV commercials have their benefits too, CTV marketing gives you the ability to get specific with your ads and target audience to supercharge your immediate business goals with creative and engaging ad formats. 



What is the Future of CTV? 

eMarketer forecasts that CTV’s future is bright -- estimating that U.S. CTV ad spending will reach $18.29 billion by 2024, more than double the amount spent in 2020.

While CTV advertising got a major boost as consumers tuned in during the pandemic, traditional TV upfront spending was down between 15% and 20%  according to Variety. This happened due to unpredictable sports programming, prolonged production shutdowns, and uncertainty about traditional TV spending amid the pandemic. 

Aside from ad spending, consumers are also getting more comfortable with CTV. In 2021, it’s estimated that U.S. adults will watch an average of 140 minutes of digital video per day, up from 133 minutes in 2020. 

Plus, by the end of 2022, U.S. adults are projected to watch digital video for an average of 145 minutes per day! 



How to Get Started With Digital Marketing 

Want to get started with CTV/OTT ads or learn more about how you can grow your business with digital marketing? Feel free to contact one of our expert digital marketing consultants or find a location near you.

Not sure how to choose the best digital marketing agency for your business? We’ve got you covered with our guide.

No question is too big or small -- contact us anytime, we’d love to hear from you!