Types of Advanced TV
Anyone trying to navigate the Advanced TV space has felt the confusion—is there a difference between over-the-top (OTT) and Connected TV (CTV)? What is the benefit to Addressable TV over CTV? What on earth is an MVPD? Why are there so many acronyms?! Fear not! Centro is here to help navigate this rapidly expanding and increasingly confusing landscape.
The first piece of this puzzle is Advanced TV—this umbrella term encompasses each of the targeted TV types: Connected TV, OTT, Addressable TV, and Programmatic TV. Advanced TV is also typically the term people use to talk about the targeted TV landscape overall. With that down, we can tackle the definitions and differences for each type of Advanced TV. See? You’re already getting it!
- Connected TV is simply a television that is connected to the internet and facilitates the delivery of streaming video content. This could be either a Samsung Smart TV, Apple TV, Roku, or even a Playstation or Xbox. CTV is the most accessible Advanced TV option in the programmatic space, allowing advertisers the ability to layer on targeting and frequency the same way you would for other programmatic executions (display or mobile campaigns). Centro has put together additional resources on the CTV landscape including these FAQs on the CTV space, if you would like to dig deeper.
- OTT, or ‘over-the-top,’ is any app or website that provides streaming video content over the internet and bypasses traditional distribution (cable networks). Good examples are HBOMax, Hulu, Netflix and YouTube. OTT can be used interchangeably with CTV—the main difference being that OTT envelops content running across CTV; web browsers, mobile phones, etc., while CTV only refers to Smart TVs and streaming devices attached to TVs.
- Addressable TV is much closer to traditional Linear TV. Whereas OTT bypasses the traditional distribution options (i.e. set-top boxes and cable networks), Addressable TV only runs through these sources. Addressable TV differs from Linear TV, however, because it uses programmatic technology and audience segmentation to serve ads at a household level. This layer of targeting allows two neighbors watching the same programming to be served two different ads based on what is relevant to them.
- Programmatic TV and data-driven linear are one and the same. Data-driven linear is slowly becoming a more common name, as it more accurately describes this type of TV—using programmatic buying technology (data-driven) to purchase linear TV inventory. Unlike the other Advanced TV offerings differentiated by their targeting, Programmatic TV stands out because of how measurable and defined in reach and frequency it is compared to traditional TV. EMarketer estimates that programmatic TV ad spend will reach 4.73 billion in 2020, nearly tripling the 2018 spend total.
Some other terms often thrown around in the advanced TV space are MVPDs, vMVPDs, SVOD, and AVOD. Think of these as different sources of inventory for the types of Advanced TV. Review more detail on each of these services, below:
- Multichannel video programming distributors (MVPDs) are service providers that deliver programming over cable, satellite, or wireline/wireless networks. Examples of MVPDs are Comcast, Cox, and Direct TV. Simply put, these are distribution sources for live and on-demand TV across multiple channels. Addressable TV, Data-Driven Linear, and traditional TV tap into these inventory sources, while CTV/OTT bypass these traditional distribution sources.
- Virtual multichannel video programming distributor (vMPVD) is a service that delivers live and on-demand television via the internet without using satellite or cable. These are internet only subscriptions such as Sling, Youtube TV, and Hulu Live. You may also hear this referred to as linear OTT. “Linear” is the key difference between a vMPVD and OTT or subscription video on demand (SVOD), as the content of a vMPVD is live television, while OTT and SVOD (Hulu, Prime Video) cater to cord-cutters. Virtual MVPD use is still small, but growing rapidly with streaming up 58% YoY from 2017-2018.
- Ad-Supported Video on Demand (AVOD) is a service that brings free access to content and is supported by ads rather than subscription fees (Crackle and Hulu).
- Subscription Video on Demand (SVOD) is when users pay a monthly fee in exchange for access to a streaming library of movies, TV shows, and other content. This is the only service that is not an inventory source for advanced TV, as it is made up of paid subscriptions vs. being ad-supported.
The Advanced TV landscape is complex, but hopefully this guide helped clarify some of its intricacies. Buyers can access and discover CTV/OTT inventory through the private marketplaces and open exchange in Basis. Centro teams can also advise and execute buys across data-driven linear and addressable TV—learn more about Centro’s Connected TV offering here.