The Difference Between Traditional, Linear, Connected TV, OTT, and Advanced TV Advertising [infographic]

Since its inception in 1925, the role of television has been more or less the same — to inform viewers about important events and provide entertainment. The form of television has changed very dynamically over time. From the 1920s to the 1930s, mechanical television reigned supreme, but various technological breakthroughs over the years have initiated the development of today’s television.

In this article, we will focus on the differences between traditional, linear, connected TV (CTV), over-the-top OTT (OTT) services, and Advanced TV, as well as briefly review the history of television and look at how advertising has changed and adapted to the innovations in television.

Etymology Of The Television

The word television comes from the combination of Greek τῆλε (tele) — far, and Latin visio — sight. The name was coined by Constantin Perskyi, Professor of Electricity at the Artillery Academy of Saint Petersburg, in 1900. In his paper, which he presented at the 1st International Congress of Electricity in Paris, he referred to experiments of image transmission of Paul Nipkov, an inventor of the Nipkov disk, and Porfiry Bakhmetiev, the creator of image transmission over distance. And that’s how television appeared for the first time in public.

The Evolution of Television Technologies Over Time

Even though today’s televisions are packed with advanced technology, 200 years ago, broadcasting voice and image at a distance was just a fantasy. More than 100 years have passed since the discovery of selenium was used to build the first primitive television set in 1925 by John Logie Baird.

It was the same with TV advertising. Many years passed from the construction of the first television set to the display of the first TV advertisement by Bulova Co. in 1941.

Mechanical Television

Thanks to a system of discs with drilled holes (Nipkov discs, the master television patent) and radio waves, mechanical television emerged. Despite the rather low quality, resulting from primitive technology, the inventors managed to transmit moving images and sounds over long distances. The resolution ranged from around 30 lines to 120 lines. Mechanic television, which continued to be developed until the 1930s, was an important foundation for further experiments on electric television.

At this point in time, the TV advertising industry did not exist.

Electronic Television

The development of televisions as we know them today would not have been possible without the invention of the cathode ray tube (CRT), which is also known as a kinescope (1907). Initially, its service life was only 25-30 hours. However, in 1930, Allen B. DuMont Laboratories extended its service life to 1000 hours and thus popularized television sets.

Another turning point in the history of television was the 10-day show of completely electronic televisions in 1934, which used a live camera. This event was the introduction to regular broadcasting possibilities. Six years later in 1940, black and white televisions gained color.

It was at this point that TV advertising started to emerge. 

The first company to advertise in a TV commercial was Bulova in 1941. They displayed a simple 9-second-long spot with the company’s logo on top of a map of the US and included a voice-over saying “Americans run on Bulova time”.

Color Television

The 1940s brought further technological changes. Color images started to appear, but it took almost 20 years for color TVs to replace black and white televisions. Since the production of color TV sets was limited, it took a while for advertisers to invest money in TV advertising. 

It is worth noting that the culture of watching TV significantly differed from today’s standards. The shows were public and TV sets were mainly available in larger centers, not in private households as they are today.

Official announcement — New York’s first public demonstration of color television. Source: Wayback Machine

The situation changed dramatically in a matter of just fifteen years. The most important events in the 1950s were the following:

  • 1951: Advertisers spent $128 million on TV’s ads.
  • 1953: Commercial color televisions were launched.
  • 1955: Advertisers spent $1 billion on TV’s ads.

A decade later, advertisers wishing to display their ads on “The Big 3″ (CBS, ABC, and NBC) broadcasters had to pay $50,000 for a prime-time minute.

From Digital to Connected TV

From the 1970s, television slowly began to enter a new stage. Progress in image compression made it possible to improve the quality and provide faster transmission, which broadened the transmission bands and enabled the switch from an analog to a digital signal.

The 1990s, in particular, was an intensified period of transformation — households bought TV sets on a large scale, which for advertisers meant access to a wide audience.

There were also Internet advertisements (1994), the pay-per-rental business model (PPR; 1997), digital video recorders (DVR; 1999), which are considered both supplementary and competitive “products” of television.

Since 2000, Internet service providers (ISPs) have been moving their platforms to smart TVs.

Connected TV (CTV) is the modern way of accessing broadcasting services. Thanks to Wi-Fi or Internet cables plugged into a TV set, streaming services can be watched with no limits in time. 

CTV also brought with it a new era of video services on demand. It enables providers to offer their users the experience they know from video-streaming services on the Internet, such as pausing, saving the exact moment where the user stopped watching a movie or a program and creating watchlists — a list of shows and movies the viewer would like to watch.

CTV is definitely gaining momentum and the last few years have been groundbreaking for video-streaming services such as Netflix and Hulu that have started to generate millions of dollars of revenue just from monthly subscription fees.

In 2022, CTV in the USA is estimated to be watched by approximately 204 million people. At the same time, cable TV has experienced the phenomena of cord-cutting, which has resulted in smaller audiences for cable TV providers.

Global television advertising revenue from 2015 to 2024 (in billion U.S. dollars). Source: Statista

Broadcast Systems

A TV’s broadcasting system is the key element that differentiates the various types of TVs and refers to the way the TV signal is sent over a distance, processed and received. There are four ways to distribute a signal and each of them uses a different piece of technology.

Terrestrial Television

The oldest broadcasting system is terrestrial television. It uses metal antennas plugged into TV sets to receive signals transmitted over the air by radio waves from a TV mast. Antennas are set on terrain elevations and roofs. London’s Alexandra Palace is the birthplace of the analog television — in 1936 the British Broadcasting Corporation (BBC) adapted the place into a television station and started broadcasting a regular program.

Alexandra Palace television station. ©Jack Rose, Wikimedia Commons, License cc-by-sa-3.0

Nowadays, the technology has switched from an analog to a digital signal, which enables the transmission of 4 to 16 times more TV programs thanks to image and sound compression in the MPEG-2 and MPEG-4 systems.

Great Britain was the first European country to launch digital terrestrial television. Since 2015, no country in Europe has broadcast its program via analog terrestrial television.

Cable Television

Where wireless coverage was limited, cable TV providers installed coaxial cables or optic cables. To receive cable television, you required a service drop (underground or overhead), a cable connection to a specific TV set, and a set-top box (cable converter box).

Initially, similarly to terrestrial television, the signal was analog. However, providers quickly switched to a better-quality digital signal, enabling the reception of high-definition channels (HDTV).

Satellite Television

Satellite television can be placed in areas where terrestrial and cable television cannot receive a signal. To transmit the signal, the satellite system uses communication satellites placed in orbit. To receive and decode it, you need an external satellite dish and a low-noise block downconverter (LNB). The so-called “direct to home” (DTH) or direct-broadcast satellite television (DBSTV) method is the most popular method of receiving a television signal over a satellite system.

Internet Television

The last television broadcasting system is Internet television or streaming television. In general, Internet television creates the possibility of receiving TV content via an Internet connection. Along with the digital signal, series, films, news programs, as well as advertisements are broadcast.

There are several terms related to Internet TV:

  • Connected TV (CTV)
  • Internet Protocol TV (IPTV) 
  • Peer-to-peer TV (P2PTV)
  • Hybrid Broadcast Broadband TV (HbbTV)

Content Delivery Models In Television

To access the content in television, the viewer can use various types of service provisions: linear, on-demand, recommendation or mixed. The models obviously differ, so let’s take a look at them.

Linear TV

Linear television works by broadcasting TV programs on specific channels in scheduled time slots. In other words, the viewer has to tune in at a certain time to watch the programs they want to watch. 

Here are some other points about Linear TV:

  • It’s a traditional content distribution system.
  • The viewer can record a given program on a DVR and watch it later.
  • The viewer has no power over the displayed content — i.e. they have to watch whatever is on at the time.

Advanced TV

Advanced TV refers to the various ways of streaming television content and includes addressable TV, connected TV, over-the-top, and video on demand. 

Advanced TV evolved from traditional linear TV delivery models, according to IAB. The main difference is how the ads are served. Advanced TV enables more accurate user targeting and thus is in opposition to the traditional broadcasting model where targeting is somewhat limited.

Under the advanced television name, we have the following terms:

  • OTT (over-the-top) video: Video-streaming providers, such Netflix, Hulu and Disney, serve content to viewers via the Internet. 
  • Connected TV (CTV): Similarly to OTT, video providers utilize an Internet connection to distribute their content. The difference between CTV and OTT is that CTV is about the devices and OTT is about the services.
  • Addressable TV: Advertisers can display different ads to various audience segments even if they watch the same TV program. Addressable TV is applicable to IPTV and set-top boxes in live, playback, and VOD modes.

Over-The-Top (OTT)

Video-streaming platforms that have access to the Internet and are connected to the TV set form the over-the-top (OTT) model. The traditional way of receiving a signal was through radio waves, a cable, or satellite, while OTT refers to transmitting “over the top” of existing infrastructure, e.g. the Internet.

For a viewer to access OTT services, they need a smart TV, smartphone, tablet, computer, game console, or streaming device like AppleTV and Roku. Advertising on OTT is similar to advertising on linear TV, with the difference being the delivery model — ads are served through streaming services.

Connected TV (CTV)

As we said before, for the OTT model to work, you require devices connected to the Internet. These devices come under the term connected TV (CTV). Examples of CTV are smart TVs, game consoles, and streaming devices. However, according to the IAB Tech Lab, the term CTV does not include laptops, smartphones, and tablets because they are multifunctional devices and not closely correlated with television.

OTT vs CTV

The difference between OTT and CTV is fairly simple. OTT refers to the content being delivered and CTV refers to the device that the content is being displayed on.

Content Discovery Platform

Modern television uses tools to personalize content for viewers, with content discovery platforms (CDPs) changing the way we use televisions. The user experience has changed dramatically compared to linear TV. The user interacts with the content (pauses, plays from the beginning, turns it on when they want to), evaluates it, saves it to lists, and even — in selected productions — can control the course of a movie or an interactive game script.

Content discovery platforms mainly work with the OTT model, but can also work with linear TV. Thanks to the metadata, i.e. pieces of information about viewers’ preferences, content discovery platforms can find movies and TV programs that have a good chance to appeal to the viewer.

There are companies such as RedBee and TV Genius (acquired by RedBee) that offer CDPs platforms but OTT service providers can expand their own algorithms to include this functionality as well. 

See how Netflix delivers its recommendations to users:

HbbTV

Hybrid Broadcast Broadband TV (HbbTV) combines traditional television with a broadband Internet connection. It provides additional services and information that viewers can access while watching regular broadcast TV. For example, if the viewer watches a soccer match, a HbbTV overlay can show statistics from the game.

This kind of extension is available through smart TVs (via the remote control), but also via CTVs (e.g. game consoles) and OTT streaming devices.

Peer-To-Peer TV (P2PTV)

P2PTV is an application that aims to redistribute video streams (usually TV channels from around the world) in real-time inside P2P networks. P2PTV streams can be shared and watched by anyone on the network.

Internet Protocol TV (IPTV)

Internet Protocol television (IPTV or streaming media) streams the source media continuously in real time. IPTV is utilized by not only streaming television but also subscriber-based telecommunication networks, as well as corporate and private networks. IPTV offers live television, catch-up TV, start-over TV, and video on demand (VOD).

Multichannel video programming distributors (MVPD) provide several television channels that typically come with a subscription and a cable television. However, in recent years the distributors have been experiencing a phenomenon of cord-cutting, meaning viewers are canceling pay subscriptions and opting for cheaper or free equivalents available via OTT. Cord-cutters are exceptionally sensitive to price changes and tend to drop their subscriptions if the price rises.

There are some additional phrases related to cord-cutting:

  • Cord-nevers —  people who either didn’t own a traditional television or grew up with OTT streaming services and don’t see the reason to pay for broadcast television.
  • Cord-shaving — the situation where rises in traditional TV subscription fees cause viewers to switch to a cheaper package of channels and then complement them with services available through the Internet (e.g. streaming services).

In the MVPD and cord-cutting landscape, there is a need to describe the term Virtual Multichannel Video Programming Distributor (vMVPD) and their skinny bundles.

Streaming services like YouTube TV, which provides channels from ABC, CBS, Fox, and others, as well as fuboTV with offerings from National Geographic, TNT, and CNBC, are examples of vMVPD. The distributors offer a smaller number of channels for a monthly subscription fee, typically half the price of the regular cable TV subscription.

TV Advertising

As we mentioned earlier, the first company to show their TV ad was Bulova on July 1st, 1941 on WNBT station. In 1946, the first nationwide spot with Ford’s cars was broadcast on American television.

Initially, in Europe, television was supposed to be an advertising-free medium, but the production and broadcasting of television programs required large funds to operate, which is why television stations began selling airtime to advertisers.

The first TV ads were pretty static. Back then, the text was more important than the image, as such a spot could be played multiple times. In the 1960s, the ads started to feature jokes, references to politics, diseases, and many other topics. Advertisers began to perceive audiences as specific social groups. 

Twenty years later, music television emerged and was able to reach young people. In the 90s, research on target groups appeared and media houses were established. From the 2000s, advertisers began to communicate more directly with their clients and talk about all possible topics, even those considered taboo. 

We can now see that companies are using new technologies to create, run and manage TV ads, and therefore, new advertising formats have emerged.

Linear TV Advertising

Linear TV advertising means displaying ads via a schedule through satellite and cable TV. The consumer has no control over the ads they see and can’t skip them. The ads are delivered to viewers without any user-level targeting methods.

According to Nielsen, in Q1 2018, weekly linear TV viewing reached 88% of the adult U.S. population. One year later, IBC365 reported that the impact of commercial TV ads fell by 4.4% in 2019 and could fall as much as 21% by 2025.

Linear TV viewing. Source: Nielsen, The evolution of linear tv advertising.

Even though these predictions are bad, there are businesses, such as Adelphic, that still combine linear TV advertising with programmatic buying, thereby introducing programmatic linear TV (PLTV) to media buyers. The solution allows advertisers to add some limited targeting methods to their advertising campaigns.

Advanced TV Advertising

Advanced TV advertising aims to reach a defined audience (e.g., new parents). It often includes age and gender qualifiers and can be utilized across addressable, programmatic, and audience-based advertising campaigns.

OTT and CTV Advertising

OTT advertising refers to displaying ads on streaming services and CTV advertising refers to delivering ad content to consumers via smart TVs, game consoles, and streaming service devices.

The majority of CTV and OTT ads are bought and sold via direct deals and private marketplace (PMP) deals because they are considered limited and premium inventory.

Client-side ad insertion (CSAI) and server-side ad insertion (SSAI) are two main methods to serve OTT and CTV ads:

  • Client-side ad insertion (CSAI): With this method, the ad is preloaded into the video player of the OTT device or service, or an ad request is sent out to a third-party ad server from the video player.
  • Server-side ad insertion (SSAI): SSAI stitches the ad slots into the video content. Ads are then selected upon the request of the various AdTech platforms and displayed to the viewers at the right moment.

HbbTV Advertising

Advertising in Hybrid Broadcast Broadband TV (HbbTV) means delivering ad content via special applications accessed with two things: The Internet and a TV remote control.

Each HbbTV application has its URL. To connect with the website and serve ad content, the viewer typically hits the red button on their remote control when they see a red dot in the corner of their TV screen.

Summary

The combination of technological advancements and changing consumer needs lead to new forms of television. Traditional television has almost become a thing of the past and has been replaced with advanced TV, such as OTT, connected TV, addressable TV, and addressable VOD.

As new kinds of TV emerge, viewers have more options to choose from and consume TV content the way they actually want. They can omit the content they are not keen on, play movies whenever they want, and get relevant and targeted advertisements to make smarter choices.

Thanks to the companies that are pushing the boundaries, utilizing new technologies, and ultimately creating new forms of TV we — the TV consumers — can enjoy new experiences.

The post The Difference Between Traditional, Linear, Connected TV, OTT, and Advanced TV Advertising [infographic] appeared first on Clearcode | Custom AdTech and MarTech Development.

This article was originally published on https://clearcode.cc

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.