What’s the Difference Between OTT Advertising and Addressable TV Advertising?

Amrita Hemdev
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By Amrita Hemdev
April 17, 2019
It's widely known that OTT and addressable TV are systems that deliver ads to consumers with the ability to show different ads to different households while they are watching the same program. So what exactly is the difference between the two? Dig in to find out.
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2019 is the year advertising and marketing professionals need to commit to digital.

Brands are shifting their focus from targeting programs to targeting audiences. As this accelerates, media agencies and advertisers must accept and embrace new advertising technology to reach the right audience.

 

What is OTT advertising?

OTT, or over-the-top, refers to the delivery of video content via the internet. With OTT, transmitted content bypasses a traditional broadcast signal or cable set-top box. OTT content can be accessed without the involvement of a television service provider via any device or app that is used to stream content to a TV or connected device.

OTT advertising is much like advertising on TV, but delivered through streaming media on OTT platforms. With OTT ad revenue set to increase from 45% to 60% over the next decade, ad tech pioneers, advertisers, media agencies, and early adopters of OTT advertising can reap its benefits in the near future.

OTT offers the power of digital advertising combined with an engaging, big screen user experience, without the use of a cable connection.

 

What is addressable TV?

Addressable TV is a method to deliver targeted advertising on digital TVs. Personalized advertisements can be delivered in real time based on the household composition, by means of a combination of audience analysis/clustering and delivery technologies.

Addressable TV content is delivered by multichannel video programming distributors (MVPDs) like Comcast and AT&T DIRECTV to pay TV, cable TV, satellite TV, and on-demand subscribers.

 

OTT advertising is different from addressable TV advertising.

OTT ads do not require a cable connection.

TV is changing. Pay TV is losing millions of subscribers a year as consumers cut the cord and adopt internet-based streaming services. Consumers today watch more TV than ever – the average household watches nearly eight hours a day – but they’re changing what they watch and how they watch it.

OTT content is content streamed via internet services on OTT devices. OTT does not require users to have a cable connection.

Ads on addressable TV are typically delivered at the individual household level, through cable, satellite, and IPTV delivery systems and set-top boxes.

 

The targeting abilities of OTT ads differ from addressable TV ads.

OTT offers Dynamic Ad Insertion (DAI) delivered instream via VAST (Video Ad Serving Template) ad tag delivery, in a full screen, largely viewable experience. DAI enables OTT advertisers to easily change ad creative in linear, live, and video on demand content. Addressable linear TV does not widely support dynamic ad delivery, though specific ads can be sent to specific (addressable) households for granular audience targeting.

Since OTT content is delivered over the internet to connected TVs with persistent IP addresses, advertisers can target and serve ads to specific households/subscribers with similar precision as digital video, resulting in greater relevance and ROI. Addressable TV leverages subscriber registration data and set-top box technologies to apply specific audience segments.

The common targeting parameters for OTT advertising include: device, demographics, content and category, location, etc., and advanced targeting can include purchase behavior or intent (available through the use of first- and third-party data). For addressable TV ads, the targeting options include household demographic data, as well as first- and third-party data combined with a content distributor’s subscriber data in an anonymized match.

 

OTT ads reach cord-cutting audiences.

The user behavior that cable TV providers fear most – cord-cutting – is projected to accelerate over the next five years. eMarketer estimates that by 2021, over 81 million U.S. consumers will have either cut their cords or never signed up for one in the first place, up 64% from 2018.

According to ZypMedia’s 2019 survey, 30% of U.S. adults are cord-cutters, who used to watch cable or satellite TV but now watch all content via streaming services, while even more (37%) are cord-shavers who watch both. Yet even cord-cutters are still receptive to commercials. More than half (52%) indicated that they don’t mind watching commercials and 47% of cord-shavers also agree.

As the cord-cutting audiences grow, so will the demand to reach them.

As the digital world continues to develop and evolve, diversifying your media strategy by adding OTT advertising will help you bring your best advertising game and extend your campaign reach beyond cable subscribers.


Reach cord-cutting audiences by including OTT in your advertising mix.

For media companies and local advertisers looking for an OTT advertising partner with the right expertise and technology that can serve ads to their audiences, ZypMedia delivers the full package. We can help you and your organization place OTT ads in front of OTT-streaming audiences while helping you drive sales and generate a positive ROI.

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Amrita Hemdev

Amrita is an inbound marketer. She studied marketing and project management at UC Berkeley and proceeded to work in a fast-paced, digital advertising tech startup, with a goal of increasing brand awareness. She is currently the Content Marketing Specialist at ZypMedia. Passionate about digital marketing and having five years of experience in this field, she also started her digital marketing and creative agency, Sociato, based in India.
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