What is the difference between CTV and OTT advertising?

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Last updated: April 8, 2026

Quick Answer: CTV (Connected TV) advertising targets internet-connected television devices like smart TVs and streaming boxes, while OTT (Over-The-Top) advertising delivers content via internet streaming services across all devices. CTV is a subset of OTT focused specifically on television screens, whereas OTT includes mobile, desktop, and tablet viewing. The global CTV advertising market is projected to reach $31.1 billion by 2027, growing from $8.1 billion in 2020, while OTT advertising spending in the U.S. alone surpassed $40 billion in 2023.

Key Facts

CTV advertising targets internet-connected television devices like smart TVs, gaming consoles, and streaming devices
OTT advertising delivers content via internet streaming services across all devices including mobile, desktop, and tablets
The global CTV advertising market is projected to reach $31.1 billion by 2027
U.S. OTT advertising spending surpassed $40 billion in 2023
CTV represents approximately 40% of total OTT advertising revenue

Overview

Connected TV (CTV) and Over-The-Top (OTT) advertising represent the evolution of television marketing in the digital age, emerging as internet connectivity transformed media consumption. CTV advertising specifically targets television sets connected to the internet through devices like smart TVs (Samsung, LG), streaming boxes (Roku, Apple TV), and gaming consoles (PlayStation, Xbox). OTT advertising encompasses a broader category of streaming content delivered directly over the internet, bypassing traditional cable or broadcast providers. The distinction became significant around 2015-2017 as streaming services like Netflix, Hulu, and Amazon Prime Video gained mainstream adoption, creating new advertising opportunities. CTV advertising grew particularly rapidly during the COVID-19 pandemic, with viewership increasing by 81% in 2020 as consumers shifted to streaming entertainment. The technology enables precise targeting based on user data, unlike traditional linear TV advertising that relies on demographic estimates.

How It Works

CTV advertising operates through programmatic platforms that serve ads to internet-connected television devices, using data from streaming services, device manufacturers, and third-party providers to target specific audiences. Advertisers can purchase inventory through private marketplaces, programmatic guaranteed deals, or open auctions, with ads typically inserted during streaming content as pre-roll, mid-roll, or post-roll placements. OTT advertising works similarly but extends across all internet-connected devices, allowing campaigns to reach viewers on smartphones, tablets, computers, and televisions through a unified strategy. Both utilize advanced targeting capabilities including demographic data, viewing habits, purchase history, and geographic location, with measurement through impressions, completion rates, and attribution modeling. The technical infrastructure involves ad servers, demand-side platforms (DSPs), and supply-side platforms (SSPs) that facilitate real-time bidding and ad delivery, with standards evolving through organizations like the Interactive Advertising Bureau (IAB).

Why It Matters

CTV and OTT advertising matter because they represent the future of television marketing, addressing the decline of traditional linear TV viewership and enabling precise audience targeting with measurable results. For advertisers, these channels offer superior return on investment through reduced waste, better engagement metrics, and the ability to reach cord-cutters and younger demographics who predominantly consume streaming content. The shift has transformed media planning, with major brands allocating increasing portions of their television budgets to CTV/OTT—some companies now devote over 30% of their video advertising spend to these channels. This evolution also impacts content creation and distribution, as streaming services develop ad-supported tiers and original programming funded by advertising revenue, creating new business models in the entertainment industry.