Yocto is an entire operating system image from scratch from source and a Yocto software update should be over-the-air at this point. You can learn here how to create custom images using the Yocto Project. Yocto comes with the advantages of being light and streamlined as a distribution. Yocto is a source-based distribution which the user must build themselves and after you have gone through the installation steps, you get a bootable image that you can use on your board. Yocto has a big advantage: it is far more customizable than Ubuntu, but this also means that Yocto includes very little by default.
This is a companion discussion topic for the original entry at https://mender.io/blog/yocto-and-ota-software-updates