Are you looking for an effective way to promote your brand or business to a large but well-targeted audience? If so, Over-the-Top (OTT) advertising might be the perfect choice to reach your desired customers. It provides more opportunities than traditional TV ads to connect with new and existing customers.
Over-the-top (OTT) advertising is all about reaching people where they’re already spending time—on streaming platforms like Netflix and YouTube. With more people watching content online, OTT ads allow brands to connect with viewers directly on their screens.
In this blog post, we’ll explore the amazing benefits of OTT advertising and why it’s a smart choice for brands today! Keep reading.
Key Points
- OTT advertising connects brands with audiences on popular streaming services like Netflix and YouTube, reaching viewers where they’re already engaged.
- OTT ads let brands reach specific groups by age, interests, location, and more, reducing wasted ad spend and increasing relevance.
- With data-driven targeting, OTT ads can be tailored to match viewer preferences, boosting engagement and creating a more enjoyable ad experience.
- OTT platforms offer tools to ensure ads appear in safe, brand-appropriate spaces, minimizing the risk of association with unsuitable content.
- OTT advertising supports the entire sales process, from awareness to conversion, with flexible ad types and cross-channel retargeting capabilities.
What is Over the Top (OTT) Advertising?
The other night, I was watching my favourite show, just relaxing. Suddenly, an ad popped up, and instead of skipping it, I actually watched. It was quick, enjoyable, and felt like it was made for me. By the end, I wanted to know more about the brand.
That’s when it hit me, this is what over-the-top (OTT) advertising can do. It reaches people where they’re genuinely engaged in a personal and enjoyable way. It made me see OTT as an innovative way for brands to connect, not just interrupt.
OTT (over-the-top) advertising is online advertising that reaches viewers through streaming services or internet-connected devices. Like other types of digital advertising, it allows advertisers to reach specific audience groups and provides detailed tracking and measurement.
The term “over-the-top” means that advertisers can bypass traditional TV networks, which usually control what’s broadcast. This approach gives media companies and advertisers more flexibility, letting them reach their audiences directly without set schedules or location limits.
Popular OTT platforms include Netflix, Hulu, and YouTube, where audiences are not only huge but also diverse. This flexibility is why OTT advertising is so appealing for brands—it reaches people directly where they spend their time.
Why OTT Advertising is Essential for Modern Brands
In today’s digital world, connecting with people where they’re already spending their time is key to a brand’s success. This is precisely what OTT advertising offers. Unlike traditional TV ads, OTT ads reach people through streaming platforms they already love, like Netflix and YouTube, making it a perfect match for the way modern audiences watch content.
With the ability to target viewers directly and measure results in real-time, OTT advertising has become essential for brands that want to stay competitive and engage with their audience more effectively.
Here are reasons you should consider investing:
#1. Precise targeting that reduces waste
One of the biggest strengths of OTT (over-the-top) advertising is that it allows you to reach specific audiences in many ways. Depending on the platform and your OTT buying strategy, you can target using the platform’s audience data or even by adding your customer data.
Most major OTT platforms let you target based on:
- Interests and behaviors
- Demographics
- Location
- Custom audiences (using data from your sources)
OTT audience targeting combines audience data with consumer data to reach people more effectively. If you use a cross-channel approach, you can target and retarget the same audience across different channels and devices.
For example, with the right OTT strategy, you could reach your audience on their TV screens and then retarget them across OTT, audio, display, and more—creating a connected, cross-channel experience that boosts your brand.
#2. Adapting to privacy changes in the industry
With significant changes coming to data privacy, the way advertisers target and measure their marketing is about to shift significantly. Many are now exploring new ways to spend their marketing budget on areas that will remain easy to target and measure.
In this new privacy-focused era, the TV screen is becoming a valuable tool for advertisers. Unlike other devices, TVs never used cookies or IDFA, so these changes don’t impact TV targeting similarly.
Data will continue to play a huge role. As this field evolves and cookies phase out, first-party data from publishers will become even more important, especially in programmatic advertising.
#3. More relevant ads and higher engagement
OTT (over-the-top) advertising increases engagement by showing ads that match each viewer’s interests through data analysis. It allows advertisers to target specific groups based on age, location, and interests, ensuring ads reach the right people. Interactive features and different ad styles make ads more engaging and encourage viewers to respond.
Showing ads during related content boosts engagement, and limits on how often ads appear help prevent viewers from getting tired of them. Detailed reports on ad performance help advertisers improve their campaigns for even better engagement.
#4. Improved brand safety measures
To keep a brand safe in OTT (Over-the-Top) advertising, it’s essential to use accurate targeting and real-time reporting. Contextual targeting and clear reporting are key. By using detailed data and categories, advertisers can set specific criteria for where their ads appear. This helps prevent ads from showing up on channels that don’t match the brand’s image, avoiding links to “fake” or inappropriate content.
#5. Support for targeted advertising strategies
Enhance ad campaigns with focused, complementary strategies like expanding reach, controlling frequency, targeting competitors, and reconnecting with past customers. OTT (Over-the-Top) video offers a flexible way to support a range of marketing and sales goals, with growing options for scaling, tracking, and targeted advertising.
Many sources only discuss OTT in terms of general awareness or treat it like traditional TV. However, OTT video can be used as a powerful, full-funnel channel that not only builds your brand but also engages and guides customers through every step of the sales process.
To understand OTT advertising, let’s learn about the OTT platforms. Experts often use terms like AVOD (Ad-Supported Video on Demand) and SVOD (Subscription Video on Demand), but there are more.
OTT Platforms & Distribution Channels
Remember, OTT channels deliver both ads and content directly to viewers. People can watch a wide variety of on-demand movies, shows, and original content on platforms like Netflix and Amazon Prime. These platforms also show targeted ads that are relevant to each viewer, using data to make ads more personalized. This approach meets today’s consumer preferences and moves away from traditional TV.
However, the streaming video world can be quite complex, with many different devices, channels, platforms, and providers involved.
Let’s explore these channels:
Subscription Video Streaming (SVOD)
Subscription video-on-demand (SVOD) services let viewers watch content after paying a subscription fee. Some SVOD services have no ads, but big platforms like Disney+ now offer a cheaper option with ads. Netflix, Hulu, and Amazon Prime Video are popular SVOD services.
Ad-Supported Video Streaming (AVOD)
AVOD streaming services let people watch for free, but ads play before, during, and after the content. Crackle, Tubi, and Vudu are some of the top AVOD services people use today.
Virtual Multichannel Video Programming Distributors (vMVPD)
vMVPDs are streaming services similar to traditional cable, offering a few live TV channels over the internet. For instance, YouTube TV lets viewers watch live sports on local channels, and Sling TV has over 100 national channels.
In this article, we won’t cover every platform, but we’ll take a quick look at some popular streaming services and devices you might know, including:
- Roku
- Hulu
- SlingTV
- Vimeo
- Tubi
- Amazon Fire
- Twitch
- Disney+
- ESPN+
- Peacock
- HBO Max
- Paramount+
- Pluto TV
- DirectTV Now
- Crackle
- Vudu
- Freewheel
Let’s explain some of these platforms:
Roku Advertising
Roku is both a streaming device and a platform, popular among people who have cut cable. In 2023, it had 71.6 million monthly active users in the U.S. Roku was one of the first to offer OTT (over-the-top) advertising, which reaches viewers directly on streaming platforms. Roku offers 15- and 30-second ads, interactive videos, and sponsorships.
Hulu Advertising
Hulu, with over 48.3 million subscribers in 2023, provides various ad options, including different targeting methods and ad formats. Brands can bid on ad spots and track their performance.
Sling TV Advertising
Launched in 2015, Sling TV was the first live TV streaming service, letting viewers watch cable-like channels on phones, tablets, and computers. As of 2023, it has about 2 million subscribers. Ads on Sling TV can’t be skipped or fast-forwarded, much like traditional TV, and brands are charged per impression. Sling also uses programmatic advertising, letting brands bid on ads in live, linear, or on-demand content.
Tubi TV Advertising
Tubi TV, a major free streaming service, has over 74 million monthly active users worldwide. Supported entirely by ads, it offers 15- and 30-second non-skippable ads. Tubi’s user base has grown quickly, doubling from 33 million in 2020 to over 74 million in 2023.
Also, different ads can be streamed on these platforms. Let’s find out.
Types of OTT Ads
When people hear about OTT ads, they often think of video ads. But there are several kinds to consider:
1. In-Video Ads: These are the most common OTT ads and interrupt the show or video. They come in three main types:
- Pre-Roll Ads: Play before the main video starts.
- Mid-Roll Ads: Appear during the video.
- Post-Roll Ads: Show up after the main video ends.
2. Banner Ads: These ads appear at the top or bottom of the screen while people watch a video.
3. Overlay Ads: Similar to banner ads, these pop up at the top or bottom of the screen but only temporarily rather than staying there.
4. Companion Ads: These ads appear on the side of the screen, either to the left or right of the video.
5. Shopping Ads: These ads allow viewers to shop for items shown in the video. For example, Walmart teamed up with NBCUniversal and Roku so people could buy products seen on certain shows.
Are you ready to take your brand to the next level with OTT advertising but don’t know where to start? Don’t worry; we’ve got you covered! Here’s a simple OTT Advertising Campaign Planning Template to guide you through every step of creating a successful campaign.
Download, fill it out, and get your campaign running smoothly!
Whether you’re defining your audience, picking the best platforms, or tracking your results, this template makes the process easy and organized.
Best Practices for OTT Video Ads
OTT ads are video ads made for a more advanced audience. OTT viewers expect high-quality ad experiences. Here are some tips to remember when creating and running your OTT ads.
- Make sure your video works on all devices.
OTT ads can appear on different devices, such as TVs, tablets, and phones. Don’t assume your ad will only be seen on a big screen. Use the best sizes so that your main message and call to action are clear on any screen.
- Keep non-skippable ads short.
Even if you want your ad to feel high-quality, avoid making it too long. OTT viewers prefer quick content, so keep non-skippable ads short and direct—ideally between 15 to 30 seconds.
- Use dynamic creative to make your ads relevant and personal.
Your videos should match where and when your audience sees them. This could mean adjusting for the day of the week, time of day, location, weather, and audience behaviors. Combining these factors can help make your OTT content more appealing and personalized.
Now let’s learn how you can measure the output of your OTT adverts.
Tracking Your OTT Ad Spending: Key Metrics & How to Measure
If you’re running OTT ads, keeping track of the right numbers is key to knowing if your campaign is working. That’s where this simple OTT Advertising Metrics Checklist comes in! It breaks down the most important things to measure, like how many people see your ad, how engaging it is, and whether it’s bringing in results.
You can use this checklist to stay on top of your ad performance and make smarter decisions for better results.
Now, here are the key metrics (KPIs) explained:
#1. Ad Impressions
This metric shows how many times an ad is displayed to viewers. Each time an ad appears on a screen, it counts as one impression. Impressions help advertisers see how visible their ads are and estimate the size of their potential audience.
#2. Reach
Reach measures the total number of unique people or households who see a particular ad campaign within a set time. It helps advertisers understand how widely their ads are being seen.
#3. Frequency
Frequency tracks the average number of times a person or household sees the same ad within a given period. This helps advertisers determine whether people are seeing their ad too often or too little.
#4. Gross Rating Point (GRP):
GRP measures the overall impact of an ad campaign. It’s calculated by multiplying the percentage of the target audience reached by the number of times they saw the ad. This helps advertisers understand the reach and frequency of their campaign within the entire potential audience.
#5. Cost per Point (CPP)
CPP shows the cost of reaching 1% of the target audience. It’s calculated by dividing the total campaign cost by the GRP. This metric helps advertisers see how cost-effective their spending is in reaching their audience.
#6. Target Rating Point (TRP)
TRP is like GRP but focuses specifically on the target audience the campaign aims to reach. It measures the percentage of the target audience reached and how often they see the ad. TRP helps advertisers judge how well their ad connects with their intended audience.
#7. Video Completion Rate (VCR)
VCR shows how often viewers watch your whole ad. For OTT ads, VCR is usually high (between 90% and 100%) because these ads are often non-skippable and always visible on the screen.
#8. Cost per Completed View (CPCV)
CPCV measures how much you pay when a viewer watches the entire video ad. This metric helps advertisers see how well their video ad campaigns are doing in terms of viewer engagement.
#9. Cost per Acquisition (CPA)
CPA tracks the cost of getting someone to take a specific action, such as making a purchase, visiting a website, downloading an app, or even coming to a physical store.
#10. Return on Ad Spend (ROAS)
ROAS is a measurement used to determine the success of an ad campaign and its profitability. It is calculated by dividing the ad’s earnings by the total amount spent on it.
Since most OTT (Over-the-Top) ads, like those on streaming services, aren’t clickable, tracking ROAS for these ads can be tricky. Often, a third-party company, like Nielsen or Oracle, is needed to help track the ads’ impact. They do this by following device IDs and tracking both online and offline actions, like when someone visits a physical store.
Challenges of OTT Advertising
Of course, no advertising medium is perfect. OTT does come with its challenges. The platform is split into many parts and has different business models, making navigating difficult. This makes it challenging for brands trying to expand their reach to TV screens.
Here are the major challenges of OTT Advertising:
#1. Transparency
Most brands access OTT (over-the-top) inventory by going through a reseller or aggregator, but this often limits transparency. Many brands find it challenging to know if their ads are reaching top channels or lower-viewership segments. Working with an OTT agency, however, provides brands with more control and clear visibility, giving them direct access to data through first-party partnerships with OTT publishers. This approach offers full insight into spending and allows for precise optimization to improve performance.
#2. Measurement
Tracking the impact of OTT ads can be challenging since they are delivered through television, unlike other digital channels where clicks or store visits are easier to track. For full insight into the results of your OTT campaigns, a third party may be needed to capture both online and offline effects. Through partnerships and specialized technology, an OTT agency can measure post-exposure digital actions (like website visits and purchases) and offline results (like store visits). Whether you want to track online sales, in-store foot traffic, or brand impact, the question isn’t whether OTT works but rather how it works best for you.
#3. Media Planning & Targeting
Simply buying OTT media is not enough; it’s also essential to understand how OTT fits into your overall marketing strategy and how it influences your audience. This requires a well-planned approach guided by experts. The strength of a well-executed OTT program lies in a cross-channel strategy that aligns data across all platforms. This unified approach delivers a seamless audience experience across different screens and supports retargeting to keep your brand top of mind and drive conversions.
Conclusion: Embrace the Power of OTT
OTT is changing the industry in a big way. With more people moving away from traditional TV, more are turning to streaming apps and ad-supported OTT services like Hulu, Sling, and Pluto. By adding OTT to your media plan, you can reach new audiences in fresh ways — getting ahead of competitors who aren’t using this strategy yet.
As OTT viewership continues to grow, brands will have more opportunities to use OTT video to boost their sales and marketing goals. So, if you want to stay competitive, OTT could be the key to reaching your audience better.
Frequently Asked Questions
What is over the top in advertising?
Over-the-top (OTT) advertising is a way to show video ads to people through streaming services or devices on the internet. It’s also called streaming TV advertising. With OTT, advertisers can reach more people by bypassing traditional cable and broadcast TV.
Why is it called over-the-top advertising?
Over-the-top (OTT) technology streams content directly over the Internet to devices like phones or smart TVs instead of through traditional TV providers. In mobile marketing, OTT usually focuses on video content streamed this way.
Why advertise on OTT?
Reaching Your Audience: With OTT advertising, you can target your ads to specific groups. You can choose who sees your ads based on their interests, behaviours, or basic details like age and location.
Why is OTT the best?
You decide how to watch it. Unlike traditional media, which needs special boxes or radios, OTT lets you watch on your laptop, tablet, phone, smart TV, and more. You also choose the time. Traditional media follows a set schedule, but with OTT, you can stream whenever you want, and in any order you like.
Is Netflix considered OTT?
OTT, or over-the-top, refers to any streaming service that lets you watch movies and TV shows directly through the internet. Popular OTT services include Netflix, Amazon Prime Video, and Hulu.
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