In recent years, the lines between traditional and digital video consumption have blurred to the point of vanishing completely. This has left advertisers seeking the best ways to reach an increasingly fragmented audience. Some see this as an either-or choice between employing the huge audiences of traditional TV or harnessing the targeting precision and tracking capabilities of digital video – essentially shifting from a focus of where to serve ads to a focus on whom to serve ads.
Fortunately, the promise of audience-based targeting is on the horizon for traditional TV much as it currently is with digital video options. Until then though, it is expected that video streaming will continue to grow substantially and absorb a significant portion of ad dollars, especially as ad-supported options increase. Staying informed on the latest terminology will help advertisers keep up-to-speed and navigate this ever-changing space.
Here are some of the more salient terms and definitions that every advertiser should know:
Over-the-Top (OTT) – Video content that is delivered over an Internet connection through an app or connected video device
Connected TV (CTV) – A TV set that either has built-in Internet capabilities or is connected to the Internet via a streaming device
- Simply, CTV is merely a subset of OTT. Whereas OTT encompasses video delivered on virtually any device in or out of the home, CTV explicitly refers to content delivered to an in-home TV.
Ad-Supported Video-on-Demand (AVOD) – A free streaming service that gives users access to a variety of premium content in exchange for watching ads (think Pluto TV and Tubi).
Subscription Video-on-Demand (SVOD) – A subscription-based streaming service that gives users access to a wide range of premium, usually ad-free, video content for a monthly or annual fee (think Disney+ and Netflix).
Hybrid AVOD/SVOD: A streaming service that offers multiple subscription levels with commercial options (think Peacock and Hulu). There are typically up to 3 tiers for consumers:
- Paid – For a monthly fee, users can stream content commercial-free
- Limited Commercials – For a lower fee, users can stream content with limited ad breaks
- Ad-Supported – For free, users can watch certain content in exchange for a higher hourly ad load
Multichannel Video Programming Distributor (MVPD) – Provides pay TV services delivered either through cable TV, satellite or telco (think Comcast, Spectrum, and DirecTV).
Virtual Multichannel Video Programming Distributor (vMVPD) – Digital-only cable alternatives that offer access to both live and on demand premium video content for a subscription fee (think Sling TV, fuboTV and YouTube TV).
Long-Form Video – Video programming that is longer than 8-10 minutes (think TV show episodes and movies).
Short-Form Video – Video programming that is 8-10 minutes or less (think movie trailers, short clips, music videos).
Dynamic Ad Insertion (DAI): The process of inserting targeted ads into a content stream, allowing for different ads to be served to relevant households / audiences within the same ad break.
Pre-roll & Mid-roll – Ad breaks that occur either before the content begins or in the middle of the content airing, respectively.
The Covid-19 pandemic greatly accelerated the adoption rate of OTT services so much that the average number of streaming services per U.S. household is now up to four; whereas a year ago it was three. Until the inevitable consolidation starts happening, more and more services will be coming on-line. Increasingly, having a strong grasp of the terminology in this constantly evolving platform will take on greater importance.
