Addressable TV vs Over-The-Top (OTT): What’s the Difference?

by The MNTN Team

6 Min Read

With the TV advertising industry evolving in all sorts of ways, there’s never been a better time to retool your strategies. There are plenty of options out there, but two of the most popular include addressable TV and over-the-top (OTT) advertising.

In the following breakdown of addressable TV vs. OTT ads, we’ll cover the pros and cons of each approach — so you can decide which is the best fit for your business.

What Is Addressable TV?

Addressable TV refers to an advertising strategy through which you deliver bespoke content to audiences on traditional cable or satellite TV systems. The targeting criteria is based on several factors, including individual demographic traits, behaviors, and histories with your brand.

Altogether, addressable TV represents a personalized approach that can improve engagement and reach, all while ensuring that consumers are presented with content that is most relevant to them.

How Addressable TV Advertising Works

Traditionally, with linear TV, you’d have to purchase ad slots in a designated market area (DMA) and display identical content to everyone in that space. Now, under an addressable TV model, consumers in the same DMA can be targeted with different ads based on their preferences and needs. Leveraging a combination of consumer data and software, you can deliver tailored commercials to specific households or individuals.

When setting up a campaign, you’ll define specific targeting criteria and segment audiences based on desirable traits. The goal is to get your ads in front of people who are more likely to be interested in your products or services.

Advantages of Addressable TV Advertising

Addressable television marketing models offer several distinct advantages over traditional, linear TV advertising.

First and foremost, you can target your audiences based on unique traits and preferences — an impossible feat under the linear model. Through targeting, you can increase user engagement and improve responsiveness to your content.

Secondly, addressable TV promotes measurability. Instead of estimating reach and exposure, you can gather precise data on the efficacy and impact of your campaigns.

Furthermore, switching to the addressable model will provide you with more control and flexibility over your content. If something isn’t working as you want it to, you’ll be able to adjust things on the fly to improve its reach and impact. That kind of agility enables you to keep pace with rapidly changing consumer preferences and interests.

Disadvantages of Addressable TV Advertising

Addressable TV marketing isn’t without its downsides. The biggest complaint about the concept is that it can be difficult to scale. Whereas linear campaigns allow you to target entire regions, addressable models focus on more niche markets. As such, if you need to reach a mass audience, it may be best to consider other strategies.

Additionally, it’s still not quite as measurable as the more modern Connected TV advertising approach, which can reach viewers on streaming services as opposed to through cable and satellite systems.

What Is Over-the-Top (OTT)?

The term “over-the-top” refers to the delivery of video content over the internet, bypassing traditional distribution channels such as cable or satellite providers (not to be confused with Connected TV, which delivers OTT content specifically through internet-connected televisions).

OTT services — like Netflix, Hulu, and Amazon Prime Video — offer a wide range of on-demand content that can be accessed anytime, anywhere, on various devices. And it’s in large part thanks to the ubiquity of these services and their content that they have surpassed cable TV as the most popular means of watching televised content. In fact, 88% of U.S. adults are currently subscribed to at least one streaming service.

How OTT Advertising Works

OTT advertising allows you to reach audiences as they stream content on OTT platforms. You can leverage data to deliver ads to viewers based on factors such as past history with your brand, interests, viewing behavior, and demographics. In this way, OTT is actually similar to addressable TV advertising.

By partnering with streaming service providers or using CTV advertising platforms like MNTN Performance TV, you can access OTT inventory and deliver ads to viewers in between content streams. In doing so, you can connect with highly engaged audiences and measure the impact of every campaign with advanced analytics.

Related: OTT vs. CTV Advertising: What’s the Difference?

Advantages of OTT Advertising

Switching to an OTT advertising model connects you with a rapidly growing and highly engaged audience of streaming viewers. By connecting with consumers on their preferred platforms and devices, you can increase engagement and get your content in front of audiences in a more meaningful way.

Additionally, OTT advertising offers far more flexibility while also being easier to scale than addressable TV ads. You can target entire regions by tapping into premium ad inventory.

Perhaps most notably, OTT marketing offers more robust insights than addressable TV platforms. You can track a wide range of marketing metrics that impact the reach and efficacy of your campaigns.

Disadvantages of OTT Advertising

Though it is certainly true that OTT advertising is a fantastic way to showcase your brand and connect with consumers, there is one potential issue that can hold many marketers back: It’s an incredibly fragmented space.

The OTT landscape is broken up into more than a dozen different streaming options. And when you add commercial-free streaming services to the mix, the space becomes even more disjointed. All of that disparity can make it notably difficult to manage your OTT campaigns outside of creating and managing separate accounts for each streaming service.

Summary of Key Differences

With the above in mind, comparing OTT vs. addressable TV comes down to the following points:

Addressable TV advertising offers niche targeting opportunities and a fair amount of measurability on traditional cable TV or satellite TV systems.

OTT advertising, on the other hand, provides video marketing opportunities through streaming services. More importantly, with OTT, you can tie engagement to back-end actions like website visits, app downloads, or purchases, which helps you determine which campaigns are most impactful.

Performance TV Dominates Streaming Advertising

Despite the differences between addressable TV vs. OTT, MNTN Performance TV represents a solid convergence of the two. With MNTN, you’ll enjoy the prestige of linear television advertising models and the targeting capabilities of modern-day digital marketing.

The MNTN platform also offers access to premium CTV inventory, powerful reporting tools, and other resources designed to help you get the most out of every advertising dollar.

And if you need help crafting compelling content for your audience, we can handle that, too. Just turn to our Creative-as-a-Subscription™ service, which can connect you with video marketing creative experts to equip you with a steady stream of creative at no additional cost beyond what you’ll pay in media.

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Addressable TV vs. OTT: Final Thoughts

The bottom line of the OTT vs. addressable TV breakdown is that both models provide better measurability and customizability than traditional television advertising models, meaning they can both have a place in your marketing mix.

However, if you want to maximize the impact of these marketing strategies, it’s best to use a holistic platform like MNTN Performance TV. With MNTN, you can combine the advantages of both and create engaging campaigns that deliver real results.