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What Is CTV Advertising?
CTV, OTT, and Streaming TV: What the Terms Mean
- Connected TV (CTV): the device. A television connected to the internet, either a smart TV or a TV with a streaming device attached (Roku, Fire TV, Apple TV, a game console). CTV advertising means ads shown on that screen.
- Over-the-top (OTT): the delivery. Video content streamed over the internet instead of through a cable or satellite box. OTT includes viewing on phones, tablets, and laptops as well as TVs. Most people use CTV and OTT interchangeably; strictly, CTV is the TV-screen slice of OTT.
- Streaming TV advertising: the everyday phrase for both. If a salesperson says streaming TV, they usually mean CTV.
- Linear TV: traditional broadcast and cable, where programs air on a schedule and ads are bought by program, network, and time of day.
- AVOD and FAST: ad-supported video on demand (Hulu with ads, Peacock Premium) and free ad-supported streaming TV (Tubi, Pluto TV, The Roku Channel, Samsung TV Plus). Both carry CTV ads; FAST channels look and feel like cable channels but are free and streamed.
- Addressable: the ability to show different ads to different households watching the same content. This is the core difference between CTV and linear.
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How Does CTV Advertising Work?
The ad is a normal TV commercial
The inventory is bought like other digital products, not like cable or broadcast
The targeting is by household
The results are measured like other digital products, too
CTV Advertising vs. Cable and Broadcast
- What you buy: Linear buys programs, networks, and time slots. CTV buys impressions delivered to households.
- Targeting: Linear targets by the audience a program tends to attract. CTV targets the household itself, by geography, demographics, interests, and behavior.
- Geography: Linear covers the whole station footprint or cable zone. CTV can be narrowed to the household, zip codes or expanded to the country.
- Minimum budget: Linear schedules on a major station in a mid-size market usually require a sizable monthly commitment. CTV campaigns can start smaller and scale.
- Skippability: Neither, in most cases. Both are full-screen, sound-on, and typically not skippable.
- Measurement: Linear reports ratings estimates. CTV reports delivered impressions, completions, frequency, and downstream website and store visits.
- Reach: Linear still reaches the audience that watches live news, sports, and cable, which skews older. CTV reaches the growing share of households that have cut or trimmed cable, which skews younger and includes most families.
- Best use: Linear for mass reach, live events, and the over-55 audience. CTV for precise geography, defined audiences, and measurable response. Many campaigns use both.
Where Do CTV Ads Actually Appear?
Who Should Use CTV Advertising?
Local and regional businesses
CTV is the first form of television advertising that a single-location business can buy with confidence, because it can be limited to the zip codes the business actually serves and it reports what happened afterward. A dental practice, an HVAC company, a car dealer, a hospital service line, or a regional bank can run a real TV commercial to the households within their trade area and nowhere else. Campaigns can be targeted to a whole television market, to a few counties, to a handful of zip codes, or even the household level.
Businesses with a defined customer
If the customer is a homeowner, a parent, a business owner, a recent mover, or someone who has already visited the website, CTV can be aimed at that household rather than at a program that household might be watching. That precision is what makes CTV useful for B2B advertisers and for categories, such as healthcare, where advertising rules limit what other channels can do.
National and multi-market brands
For brands that already buy television, CTV extends the same creative to the households linear no longer reaches, with market-by-market control over budget and message. For brands that have never bought TV, it is the way in without a broadcast-scale commitment.
How Much Does CTV Advertising Cost?
CTV is priced by the thousand impressions, the same way most digital video is priced, and the rate depends on where the ads run, how narrowly the audience is targeted, and how much competition there is for those households at that time of year. Premium services with the newest shows cost more than free ad-supported channels. A campaign aimed at a few zip codes and a specific kind of household costs more per impression than a broad one, and wastes far less. Rates rise in the fourth quarter and around elections.
In practice, the questions that decide the budget are how many households you need to reach, how many times each one should see the ad, and how long the campaign runs. A campaign can be sized to a single-location business or to a region, and the right number comes out of those three questions rather than off a rate card. If you want to see what a campaign for your area would look like, that is what a discovery call is for.
How Do You Know If CTV Advertising Is Working?
Every CTV campaign reports the basics: impressions delivered, video completion rate, how many households were reached, and how often each one saw the ad. The more useful measures come from matching. Because the TV shares an internet connection with the household’s other devices, the campaign can report how many households that saw the ad later visited the website, filled out a form, or called, and, with location data, how many showed up at a store or office. Brand lift studies and matched-market tests answer the bigger question of whether the campaign moved awareness or sales, and they are worth running once a campaign is large enough to support them.
What CTV cannot do is tell you that a specific person bought because of a specific ad. It reports at the household level, with a margin of error, and it should be read alongside search, website, and sales data rather than in isolation.
Common CTV Advertising Mistakes
Running a web video as a TV commercial
Targeting too broadly
Judging it on clicks
Buying it in isolation
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Frequently Asked Questions About CTV Advertising
Answer:
Almost. OTT is any video streamed over the internet, on any device. CTV is OTT viewed on a television screen. In practice most advertisers and vendors use the terms interchangeably, and when someone says OTT advertising they usually mean CTV.
Answer:
In most placements, no. CTV ads run in the ad breaks of the show, full screen with sound on, and completion rates are typically above 90 percent. YouTube on a TV is the main exception, where some formats can be skipped after a few seconds.
Answer:
Yes. Because CTV is bought by the impression and can be limited to the zip codes a business serves, a campaign can be sized to a single location. It is the first form of television advertising that has been practical for most small businesses.
Answer:
Yes. A campaign can be limited to a television market, a set of counties, or individual zip codes, and can exclude areas the business does not serve.
Answer:
YouTube on a TV screen is a form of CTV, and it is one of the largest. The difference is inventory and format: a broader CTV campaign runs inside full-length shows and movies across many streaming services, mostly unskippable, while YouTube runs around creator and short-form content with some skippable formats. Many campaigns use both.
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