What The Tech is CTV vs. OTT vs. vMVPD?

January 25, 2021
Blog

At long last, brands are now able to apply the precision of digital advertising to television, the premier brand marketing medium. Behold the glory that is ad tech.

But maneuvering this brave new world of television advertising requires learning a number of esoteric acronyms, such as CTV, OTT and the extra inscrutable vMVPD. (That’s enough alphabet soup to make FDR blush.)

For our first installment of What the Tech?, our new content series explaining ad tech buzzwords, we tackle the various acronyms involved in contemporary television advertising.

Let’s start at the beginning: What do these various acronyms mean?

A great place to start, indeed. Here we go:

  • OTT (“over-the-top television”): OTT is a catchall term for any kind of television consumption that happens via the internet instead of through traditional broadcast or cable distribution. That includes people watching TV on their phones, laptops, their gaming systems or on their television sets by way of a streaming device, such as Chromecast and Apple TV. Basically, if someone is using the internet to watch it, it’s OTT.
  • CTV (“connected television”): CTV is a subset of OTT, and it indicates consuming TV through TV sets that connect to the internet directly (so-called “smart TVs”) or by way of a streaming device (Apple TV, Chromecast, Roku, etc.).
  • vMVPD (“virtual multichannel video programming distributor”): This one is a bit tricky, not to mention a mouthful. vMVPDs are platforms that deliver live, linear television over the internet. Essentially, they’re delivering a classic linear viewing broadcast or cable experience, but with the internet as the delivery system. Two of the most prominent examples are YouTube TV and Hulu Live, both of which let you watch programs such as live sports. Other providers include Fubo and Sling.

Seems like there’s a lot of overlap

You’re darn tootin’. As with any emerging market, definitions are always evolving, and industry executives will often use these terms interchangeably. That’s especially true in markets, such as many in Asia, where most video content is consumed on mobile devices.

And that’s not even the end of it. Media peeps also use the term “advanced television,” as a shorthand to indicate all of the technologies used to watch TV over the internet. And that’s in addition to terms like “addressable television” and “programmatic television,” which we’ll get to later.

So yeah, there’s no shame in being confused.

What’s this have to do with advertising?

The advent of all these new TV-watching technologies has fundamentally changed the way people consume television. (It’s almost kind of a misnomer to call it “television,” but that’s a different semantic argument.) As these technologies become more ubiquitous, people watch less traditional broadcast and cable television, and more OTT content.

This transition poses both a challenge and an opportunity for brands. For decades, traditional TV was the most popular medium among consumers, and thus the most coveted marketing channel for brands. TV was viewed as the best way to conduct a large-scale brand marketing campaign, and buying airtime for a commercial was correspondingly expensive.

With consumers transitioning to OTT, brands need to adapt. Change is never easy, but advanced television opens up new targeting opportunities for brands. Because OTT content is delivered digitally, brands can tap into a bevy of data resources and target ads with a level of sophistication that is impossible to achieve with traditional TV.

Aha. So it’s a big deal.

Very. Not to be too… over the top about it, but the migration from traditional to OTT television is one of the most significant changes in modern media history.

Nice pun. And what about those other two terms you mentioned?

Right, those. Addressable TV is technology that allows brands to serve different ads to different audience segments who are all watching the same broadcast or cable program. Imagine two houses right next door to each other watching the same football game but seeing different commercials.

Programmatic TV, meanwhile, describes advertisers using digital technology to automate and enhance the process of buying ads on traditional TV with data. Traditional TV is huge, even despite the transition to OTT, and tends to be a little old school, with some of the advertising deals involving insertion orders, faxes and agreements struck during the “upfronts.” Programmatic TV lets a brand set up and execute a traditional TV campaign from a computer, with the same technology they might use for a display ad campaign online, leveraging data to understand ad performance and iterate campaigns in real-time.

The internet is not only changing how and where people watch TV, it’s changing the way commercials are transacted on old-fashioned TV, as well.

So there you go. Hopefully, with our help, you’ll be able to stride into your next campaign-planning meeting with confidence and discuss how you can deliver a winning OTT strategy by executing programmatic buys across multiple vMVPD and CTV platforms, with some programmatic TV thrown in for cross-channel targeting purposes (or something like that).