Aug 4, 2021 | News, Video

What is OTT/CTV Advertising and How Can It Help My Marketing Plan?

What is OTT and CTV advertising?

When considering the disruption technology has brought to the media business, many of us think first of the impact it has had on the legacy newspaper business. There’s no doubt that newspapers have had to adapt quickly to this disruption, but of equal impact has been that on linear television in the form of connected television and “over-the-top” advertising. It is often said that technological disruption creates more business opportunities than it undermines, it is certainly the case with the new abundance of advertising opportunities it has created for local business in the OTT space.

What is OTT advertising?

OTT (over-the-top) advertising is advertising delivered directly to viewers over the internet through streaming video services or devices, such as smart or connected TVs (CTV). The phrase “over-the-top” refers to the ability to now bypass traditional (linear) television distribution providers including broadcast and cable systems. OTT frees local advertisers from pre-planned broadcast schedules and geographic limitations.

Delivering your advertising message via OTT or streaming services offers many benefits not available with traditional broadcast and cable advertising. Preserving the emotional appeal and connection video is capable of providing, OTT advertising is much more versatile than traditional TV advertising. Where television advertising is typically limited to top-of-funnel branding applications, OTT offers full-funnel capabilities including the ability to engage customers through their purchase journey to conversion. OTT advertising offers targeting capabilities that eliminate waste; enhanced ad relevance toward increased customer engagement; measurability that enables full campaign optimization, and scale of reach. It’s all the best of television and digital advertising combined.

The Rise of OTT Consumption

And OTT video consumption is increasingly quickly. The chart below shows the average time spent with OTT video by U.S. consumers including a +52% increase between 2018 and 2021.

According to eMarketer, more than 51% of the U.S. population subscribed to an OTT video service in 2018. This is expected to top 58% by 2022. At the same time, traditional pay TV households declined from 99.6 million in 2015 to 86.5 million in 2019, a (-13%) decline.

As (OTT) television advertising becomes more performance-oriented and versatile, and more digital and data-driven, OTT advertising is growing quickly and becoming a more important component of the marketing plan of local business.

Predictably, where viewership consolidates, so does media spending. OTT advertising spending in 2020 was more than $990 million and expected to grow to $2.37 billion by 2025. More media spend is moving toward OTT because that’s where viewers are spending their time. The chart below shows the impressive growth of OTT as an advertising platform.


Where do OTT ads get seen?

Over-the-top advertisements can be delivered through connected devices including connected TVs, mobile devices, desktop computers, and gaming consoles. As well, through streaming services including Hulu, You Tube TV and Amazon Prime. These streaming services provide remarkable reach and targeting capabilities and reach a largely unduplicated audience with 40% of streaming audiences not reached by traditional TV advertising. Including addressable, behavioral, and demographic targeting options, advertising on streaming services is a powerful advertising option.

As households in your market continue to “cut the cord” and adopt streaming services as their primary television viewing choice, adding these platforms to your media mix becomes increasingly beneficial. As part of a comprehensive multimedia marketing plan, OTT can be used as an additional tool to promote your products and services to a specific audience. Through cross-marketing, you’ll optimize your brand presence and visibility across multiple channels, foster improved customer engagement, and drive customers to action.

The streaming video landscape can be complicated with high levels of fragmentation among devices and channels. The River Valley Media Group are experts in developing effective marketing campaigns, including video production and OTT distribution. We can help you to optimize your marketing spend with a custom and comprehensive marketing program with OTT advertising if applicable to your goals.

Every day we develop effective programs for our clients and can do likewise for you. Complete the form below or drop us a note to learn more.


Share Blog