Linear TV Advertising vs. OTT (Over-the-Top): Pros, Cons, and Differences Explained
TV advertising has developed over the years thanks to internet and technology. Today ads are no longer limited to a particular time or channel as traditional linear tv programming once ruled. Now many types of ads, linear and non-linear, take place throughout the tv advertising space. In this guide we provide an overview explaining the differences, benefits, and advantages between Linear TV and OTT advertising.
Linear TV and OTT
For decades, television was a simple concept — at least as far as the viewer was concerned. Network programming schedules (the only schedules) were linear. Shows started at a specific time, on a specific day, and on a specific network. This was television for over 60 years, and linear television is still a prominent form of television today.
Linear television was, and still is, television programming that occurs at a predetermined time on a specific channel — though the word “channel” has taken on new meaning in recent years. To explain, we need to discuss Over-the-Top (OTT) television. OTT is television that is consumed over the internet.
Naturally, OTT has become more popular with the rise and reach of high-speed internet. Consumers now have access to television programming through multiple devices and streaming options.
OTT & Connected TV (CTV)
Many of these options are considered Connected Televisions (CTVs). CTVs are televisions that use external devices or internal hardware to stream OTT content. Some OTT content options are linear and serve as a replacement for traditional cable/satellite based linear television. YouTube TV is a subscription-based OTT solution which can be viewed via CTV, and is centered around linear programming.
An emerging form of linear television is free, ad-supported television (FAST). FAST programming is scheduled and not available on demand, as are the ads used to support FAST channels.
Types of OTT Channels
Other OTT providers like Netflix use a Video-on-Demand (VOD) model where the viewer is in control of the viewing schedule. These VOD providers can be advertising-based (AVOD), subscription-based (SVOD), or a combination of the two to generate revenue.
Types of Linear and Non-Linear TV Channels
To further complicate the television landscape, some OTT providers who primarily provide VOD are now starting to incorporate linear programming. Examples of this include HBO Max mirroring its traditional linear television channel and releasing House of the Dragon as weekly episodes and Amazon Prime’s Thursday Night Football. Confused? It’s a lot to take in. Let’s recap.
- Linear television (traditional): an estimated 106M people sitting around the television in 1983 to watch the M*A*S*H series finale
- Linear television (modern): millions tuning in on Wednesday nights to watch ABC’s LOST and having millions more avoiding the water cooler the next day because they hadn’t watched it, but rather had stored it on their limited capacity digital video recorder (DVR) for later viewing
- Linear television (OTT): millions watching Lamar Jackson and the Baltimore Ravens defeat Tom Brady and the Tampa Bay Buccaneers on Amazon Prime Thursday Night Football
- Linear television (FAST): nostalgia-seekers binging episodes of Degrassi on Pluto TV’s Degrassi channel
- Non-linear OTT (SVOD): Disney+ dropping much anticipated new episodes of Bluey to the delight of children and parents around the world — consumed voraciously without ads
- Non-linear OTT (AVOD): followers watching ad-supported content from video entrepreneurs on YouTube or TikTok or watchings shows and movies on-demand through free platforms such as Tubi
- Non-linear (AVOD+SVOD): watching episodes from the latest season of Atlanta on Hulu with limited advertising despite a subscription fee.
Linear TV Advertising & OTT Advertising
Why is it important to know the various types of television? In a word… revenue. Video production and distribution are not usually a free public service and very few content producers have billions of dollars at their disposal. Most video content producers and platforms need a revenue stream to keep the cameras rolling. For the rest of this article, we’ll focus on advertising-based television rather than subscription-based television.
Traditional linear television advertising is done through media buys of standard lengths on network, cable, and satellite channels. Prices are dependent on viewership forecasts and max out in the millions of dollars for national placements in the Super Bowl broadcast. This can work for broad brand awareness and products in demand across many different demographics.
Some “targeting” can be done by selecting channels or shows that have a predictable viewership within a desired demographic. For example, it might make sense to advertise a product or service tailored to women aged 50 and over during reruns of The Golden Girls on CMT rather than during a Saturday night college football game on ESPN… though there are certainly exceptions in every audience.
Challenges of Linear TV Advertising
Targeting in linear non-OTT programming only goes as far as demographics and is further complicated by the DVR. Viewers watching a program via digital recording have the ability to simply fast forward through commercials. This can even spill over into live events as viewers can simply hit pause to grab a snack, run to the restroom, etc. and then skip ahead through the ads.
If advertisers are willing to deal with limited targeting and skipability, they are still faced with declining audiences (see above list of television types) and extremely limited analytics and tracking. Traditional linear programming can share post-mortem figures, but they are contained to high-level viewership totals broken down into demographics — and those are only an extrapolation of real data. In short, it can be difficult to determine if traditional linear advertising is delivering a strong return on ad spend (ROAS).
Traditional Linear TV vs OTT (CTV)
Despite growing viewership, OTT can still face an audience size disadvantage compared to top-viewed, traditional television programs, but that’s where the advantages to advertising on traditional linear television stop. OTT relies on the internet and the internet opens up a world of possibilities in television advertising. First and foremost, ad-based streaming services can force ad viewing before the viewer advances in the program — either by inserting ads into VOD content or into more traditional, unskippable “commercial break” placement in FAST channels.
OTT advertising can’t stop viewers from looking away, but it can ensure they aren’t simply skipping ahead. There are also new and innovative ways to overlay ad/logo placements on the video content to create ad impressions while the viewer is enjoying their content.
Advantages of OTT Advertising
The advantages of OTT advertising continue thanks to enhanced data available through streaming platforms and evolving technology. Advertisers now have more ability to both target ad placements and attribute success back to the ad — allowing OTT television to be a digital performance channel. Performance TV relies on viewers’ online identifiers like IP address, device ID, etc. to profile, target, and attribute views to future conversions.
In traditional linear television, commercials might pique interest, but there is no scalable, accurate way to tie the impression to a conversion. OTT advertising makes it possible to connect the dots between an OTT ad view and other digital channel activity through common online identifiers. The ability to target audiences, personalize experiences, and analyze performance provide OTT video producers more control and clarity over advertising — allowing them to make decisions that will sustain their programming.
What does all of this mean? It means that video entrepreneurs have a sustainable path forward that rivals what used to only be available to mass media companies. Solutions like TVU Channel provide video content producers light-weight, highly secure, cloud-based solutions to launch a FAST channel that can be easily populated with live or pre-produced video content and advertising. Not only is the content management solution simple to use, but the OTT nature of the channel allows for the advertising advantages discussed above and easy channel monetization.
Additionally, TVU Channel Plus has advertising support to fill out a programming schedule with relevant, performance-based ads to create a risk-free revenue stream. The barriers to entry into television are greatly reduced with TVU Channel — empowering video content creators to reach new, wider audiences and create a sustainable business model.