The OTT Glossary: Digital TV Decoded
The global streaming video market was worth nearly $60B last year — and is expected to keep growing 20%+ per year until 2030 (wow!).
But while digital TV’s growth is impossible to ignore, advertising on it can be confusing (thanks to endless acronyms, lots of technical nuance, and many potential solutions).
To help you get started, we put together this OTT glossary that covers the basics of OTT advertising terminology.
It’s the perfect resource if you’re just dipping your toes into the world of programmatic television.
What’s the difference between OTT and CTV?
Let’s start with one of the most frequently asked questions in digital TV.
Over the top (OTT) is premium video content watched via the internet, like a streaming platform. Audiences love OTT because it usually saves them money (it doesn’t require a cable or satellite subscription). While OTT is most commonly associated with a TV, it can also include content on other streaming devices — like your mobile device, tablet, or computer.
Connected television (CTV) is a device that delivers content to a TV via the internet. Examples of CTV devices include smart TVs, Xbox and other gaming consoles, Chromecast, Roku and more.
What does this mean when you’re sitting down for your next binge session?
Say you’re using an Amazon Firestick to watch Survivor on the CBS App. You’re watching OTT content (Survivor) on a CTV device (Firestick). But say you’re watching on your phone. In that case, you’re just watching OTT, because you aren’t watching on a connected TV.
To sum it up, OTT is a type of CTV content. CTV is one of the many devices used to distribute OTT content.
But at the end of the day, these terms are mostly used interchangeably.
Related content: CTV vs OTT: What’s the difference?
What are cord-cutters, shavers, and nevers?
Cord-cutters, cord-shavers, and cord-nevers are buzzy words in the streaming media industry today.
Cord-cutters are people who cancel their traditional cable subscriptions in favor of streaming services. This group continues to gain ground against traditional cable subscriptions — research shows that traditional pay TV penetration in the US will slip below 50% of TV households by 2026.
Cord-shavers are people who downgrade — but don’t completely cancel — their cable subscriptions in favor of streaming services.
Cord-nevers are people who have never signed up for cable. Today, nearly 40% of consumers without cable subscriptions are cord-nevers.
These groups used to skew younger, but they’re beginning to shift.
In fact, 30% of cable TV subscribers between 35 and 54 years old intend to cut their cords in 2021, up 18% YoY. And 20% of subscribers over 55 years old intend to do the same, up 12% YoY.
What is AVOD? How about SVOD and TVOD?
There’s a group of VODs that might also be causing you some confusion.
VOD stands for video on demand and refers to video content you can watch whenever you want with the push of a button. VOD can be streaming content, DVRs, or even the content you watch on an airplane.
The main distinction between VOD and OTT is OTT content must be delivered over the internet, while some VOD content is still delivered via cable or satellite.
Within VOD, there are three subgroups: SVOD, AVOD, and TVOD.
Subscription video on demand (SVOD) refers to services that allow you to watch ad-free content by paying a flat rate per month. Platforms like Netflix, HBO Max, and Disney+ are examples of SVOD services (although HBO Max now offers an ad-supported tier, and Netflix recently announced the same).
Ad-supported video on demand (AVOD) refers to services that allow you to watch free content with ads. YouTube and Tubi are players in the AVOD space.
FAST stands for free ad-supported streaming TV service and refers to the same ad-supported services as AVOD.
Transactional video on demand (TVOD) is a video delivery service that charges for each piece of VOD content. In other words, the customer pays a separate fee for each TV show or movie they watch. Examples of TVOD include video content purchased via streaming services like Amazon Prime Video and the Google Play store, as well as VOD rentals offered through cable providers.
While not a VOD term, it’s also worth explaining OLV.
Online video (OLV) refers to any video content in the online space. It usually appears before a video starts (pre-roll), but it’s increasingly appearing mid-roll as well. Marketers frequently run campaigns using both OLV and OTT video inventory to maximize reach and retarget consumers across media types.
What is incremental reach and incrementality?
There’s little point in OTT advertising if you’re not looking to reach more of the right people — and you must be able to measure performance against this goal.
That’s where incremental reach and incrementality come in.
Incremental reach refers to how many people your campaign reached via a particular channel — that you would not have otherwise engaged with. This concept is critical for digital TV because it removes duplication between linear and OTT impressions, showing you how many people you reach on each medium separately.
Many advertisers look at incremental reach to understand how a specific channel impacted a campaign’s performance.
Incrementality is the attribution-focused metric of incremental reach. Incrementality answers the question: “How many attributed sales would have happened whether an impression was served or not?”
You can partner with an attribution provider to run an incrementality test on your OTT campaign and understand the true conversion power of your ad spend.
Need more than an OTT glossary?
If you still have questions about the digital TV advertising space, you’re not alone. In fact, to address some of the most common questions we receive in the world of programmatic video, we put together an online course exclusively for clients.
The course provides a deep dive into the world of programmatic digital TV — from how TV has evolved over time to how brands advertise in the growing space.
If you have any questions on how to access the course or questions in general, feel free to reach out to our MadHive team directly or email hi@madhive.com.
