What is OTT Advertising? And Why It’s Worth Your Ad Spend

CMC Advertising June 26, 2024
Content Marketing Digital Media Media Strategy
What is OTT Advertising And Why It's Worth Your Ad Spend

OTT, or “over-the-top,” refers to video content delivered via the internet, bypassing traditional cable or satellite TV. Think Netflix, Hulu, and other streaming platforms.

OTT advertising simply means running ads within these streaming platforms. Your ads might play before the show, between episodes, or even on your viewers’ home screens as they browse for something new to watch.

Before we go into how the basics of OTT ads, let’s talk about who cord cutters are.

Who are Cord Cutters?

Cord cutters are people who’ve figuratively cut the cord to their cable boxes in favor of streaming apps. They now exclusively watch movies and shows online.

What is OTT Advertising And Why It's Worth Your Ad Spend 2

The typical cord-cutter persona is:

  • Tech-savvy: Comfortable using various apps and gadgets.
  • Budget-conscious: Seeking out the best value for their entertainment dollar.
  • On-demand enthusiasts: They want to watch what they want, when they want, without being tied to a schedule.
  • Variety seekers: They enjoy diverse content and aren’t limited to specific channels or genres.
  • Ad-averse: They’re more likely to skip or ignore traditional ads.

This is not a fad: according to Forbes, 99% of U.S. households pay for at least one streaming service, and most have multiple subscriptions.

In terms of advertising, you can’t reach these people via traditional ads anymore. But that doesn’t mean they’re immune to ads altogether. That’s where OTT advertising comes in.

4 Major Benefits of OTT Advertising

  1. Laser-Focused Targeting

Forget the days of generic TV ads blasting your message to an uninterested audience. OTT advertising lets you target with laser precision.

Want to reach millennial moms in Los Angeles who love cooking shows? Done. How about tech-savvy Gen Zers in New York City who binge-watch anime? No problem. With OTT, your ads appear only in front of those who are most likely to become customers.

  1. Real Results, Real Data

Unlike the guesswork of traditional advertising, OTT platforms provide detailed analytics.

You’ll know exactly how many people saw your ad on Hulu during “The Handmaid’s Tale” last night (impressions), how many finished watching it (completion rate), and even how many clicked through to your website after seeing your ad during a “Stranger Things” binge.

This real-time data empowers you to measure the success of each campaign, understand which ads resonate, and optimize your strategy for maximum ROI.

  1. Budget-Versatile

OTT advertising often costs a fraction of what you’d spend on traditional TV spots, making it an attractive option for businesses of all sizes.

You can choose from various pricing models, like cost-per-thousand impressions (CPM) or cost-per-click (CPC), giving you flexibility and control over your budget.

Plus, since you’re targeting a more relevant audience, you’re less likely to waste money on viewers who aren’t interested in your product or service.

  1. Interactive & Engaging

OTT ads aren’t just passive commercials. They can be interactive, offering viewers the option to click, learn more, or even purchase directly from their device.

Imagine a fitness company running an ad during a yoga class on a streaming platform – viewers could click to sign up for a free trial right then and there.  Peloton, for example, has successfully leveraged this interactive element to drive engagement and sales.

How Does OTT Ad Placement Work?

OTT ad placement is a multi-faceted process that involves various players and technologies to ensure your ads reach the right audience at the right time. Here’s a simplified overview:

  • Content Providers Open the Doors

Streaming platforms like Netflix, Hulu, or Peacock decide to offer ad space within their content. They might sell it directly or work with third-party platforms to manage the process.

  • Advertisers Join the Party

Companies of all sizes, maybe even yours, see the potential of reaching a massive audience on these platforms. They start bidding on ad slots, vying for the chance to get their message in front of your eyes.

  • The Targeting Game Begins

Streaming platforms know a lot about you — your age, gender, interests, and even what shows you like to watch. Advertisers use this data to target specific groups of people. If you’re a fan of cooking shows, don’t be surprised to see ads for kitchen gadgets or meal delivery services.

  • Your Ad Takes the Stage

When the time comes, your selected ad gets played. Maybe it’s a quick video before your show starts, a catchy jingle during a pause, or a sponsored recommendation on the homepage.

  • The Data Tells the Story

Advertisers track who sees their ads, how long they watch, and if they click on anything. This data helps them improve their targeting and messaging, making sure you only see ads that are relevant to you.

It can be quite complex, especially with so many options available for OTT ads.

Learn More About OTT Advertising

OTT advertising isn’t just a fancy buzzword; it’s a real opportunity to connect with your audience in a meaningful way, right where they’re spending their time. When done right, it can be a game-changer for your brand’s reach and visibility.

But let’s be real — it’s not as simple as throwing together a quick video and uploading it to Netflix. There’s a whole lot of strategy, data analysis, and technical know-how involved.

That’s where partnering with a digital marketing agency who knows the ropes can make all the difference. At CMC Advertising, we have a strong network of partners, from creatives to media buyers, who specialize in OTT ads.

If you have more questions about how to get started with OTT advertising, we’d love to help. Call 619-337-8088 or send us a message to book your free consultation  — a member of the CMC Advertising team will be with you ASAP!

Leave a Comment