What Is OTT Advertising?

Since its invention, television has served as one of the most popular channels for advertising. According to Statista, companies in the United States spent about $60 billion on TV advertising in 2020. However, as people have increasingly shifted their TV viewing habits from cable to streaming services, this medium hasn’t provided the same reach as before. The answer? OTT advertising.

Over-the-top advertising (OTT) lets companies reach customers streaming television shows, movies, and other content directly via the internet. OTT can be used to advertise directly with streaming services or through connected devices.

‌Learn more about OTT advertising and how you can implement an OTT campaign for your company.

What Is OTT Advertising? 

‌Over-the-top advertising delivers ads via streaming videos that are shown directly to internet and streaming users. When you’re binge-watching your favorite series on Hulu and you are forced to watch ads in the middle of your show, that’s OTT advertising.

Along with Hulu, OTT ads run on popular streaming platforms including YouTube TV, Crackle, and streaming devices including Roku and Amazon’s Fire Stick. In most cases, these ads are shorter than traditional TV spots, and some platforms like YouTube allow users to skip an ad after a certain period of time.

OTT ads can reach users on multiple devices, including computers, mobile phones, gaming consoles, smart TVs, and any other device on which they access streaming services. There are many options available for OTT ads, but in general, they are high-quality ads with distinct branding and messaging.

‌Why Should Your Business Invest in OTT Advertising? 

‌With an increasing number of Americans switching from cable and traditional TV to streaming, OTT advertising is a natural shift in the industry. According to a Variety article, TV providers lost about 6 million subscribers in 2019. Many of your customers are likely making this transition, and OTT advertising can help you reach them.

OTT advertising also lets you hone in on a smaller audience than traditional TV advertising. As such, it is typically more affordable than traditional TV advertising. Buying ads to run on TV typically costs more for premium viewing times, including primetime and for highly-rated shows. This ad space can break a marketing budget for a smaller business. OTT advertising lets you reach viewers more affordably.

Advertising to customers via digital streaming services can also enhance your brand image. Since many viewers are shifting to online viewing on their schedule, companies who advertise on these platforms may be seen as more relevant than companies who simply rely on television ads for their products.

There is an abundance of streaming content on various platforms. As an advertiser, you are no longer limited to a set number of ad spots at certain times of the day. Your OTT ad can run through different streaming services whenever a user has logged into their streaming service and starts watching their favorite shows.

‌OTT is more customizable than traditional TV advertising. You can place your ad over a show whose audience fits in with your target customer or choose a newer platform that is popular with people in your target demographic. You can tweak your ads based on the shows they are airing with, tailoring the message to that particular audience rather than creating a generic ad for a specific channel and time slot.

Where Should You Display Your OTT Ads? 

‌Since OTT is still relatively new in advertising, there has not been a lot of research into its returns. But like other forms of advertising, you will likely receive the best return by reaching out to your target customers.

Before drafting your OTT ad strategy, make a detailed profile of your target customer. You’ve probably got this information on hand in your marketing plan to inform your other marketing strategies. Many OTT platforms let you choose targets by age, location, demographics, and other filters. Choose the filters that best fit in with your target market. You can use geographic filters to find viewers in your area or use interests and demographic filters to show your ads to people in your market.

One benefit of using OTT over traditional television advertising is the ability to target ads based on interests. You can choose from endless parameters, including fitness buffs, people interested in live music, sports fans, coffee drinkers, and many more.

OTT distribution methods vary depending on how content is delivered to the customer. You can choose to buy ad time directly with a streaming service like Hulu, or you can opt to partner with a large company that pushes out OTT content through various apps. Cable giant Xfinity now offers customers the ability to stream through multiple apps, which they can use through their cable box or as an additional service to their internet.

First, determine the number of impressions you want to achieve with your ads. If your customers live all over the country, choose a popular platform to generate a higher number of impressions. If your customer base tends to be smaller and more local, you can pay less because you won’t need the same number of impressions. In this case, you might choose to work with a smaller company or set a higher number of filters.

Hulu allows advertisers to run ads within a specified date range and with their desired filters. The company allows you to determine your own budget, but you have to spend a minimum of $500, which is more budget-friendly than a 30-second spot during a highly rated primetime show on a network.

If your company is already advertising on social media and on YouTube, use similar guidelines to direct your OTT ad strategy. Set a clear list of objectives for your ads, and do some research on ad prices and requirements for each platform. This will help you decide which platforms best match your goals and your advertising budget.

Best Practices in OTT Advertising

Of course, as with all advertising, it works best when you follow best practice guidelines. And, although OTT is still considered fairly new there are some best practices that you should follow.

‌1. Consider your ad length

‌A traditional television ad is either 15 seconds, 30 seconds, or 60 seconds long. In general, your OTT video ads should be shorter, no more than 30 seconds. Since some platforms give people the option to skip after the first 15 seconds, put the most important messages upfront, including your logo and a description of what you are selling.

‌2. Develop a consistent message

‌OTT can serve as an extension of your existing online marketing strategy. Many people access streaming services on mobile phones and other devices on which they also search the internet. If your ad runs on Roku before their favorite show, they may be more likely to remember your brand when a sponsored post pops up on Instagram. Pay close attention to messaging and branding in your OTT ads.

‌3. Do your own testing

‌Like other digital advertising, you should tailor your OTT ads and test them out on various platforms. If you’re already tracking statistics, including click rates, website traffic, conversion rates, and the time spent on your website, see if you notice any differences after running your OTT ads.

Start with a few smaller ads to see how they impact your key metrics. After a few months, you may start to see trends. You might notice that one platform or target filter results in more traffic to your website. You can use these insights to tailor your OTT ads in the future and achieve better results.

4. Stay informed of environmental factors that impact viewing

‌Certain factors drive people to consume video content at a higher rate than normal, including a closely contested election or a championship berth by your local sports team. In these instances, you may be able to reach a broader range of people with local OTT targets. Or you may find yourself up against more competition from other businesses in the area.

When you’re creating OTT ads during these periods, tailor them to the event, or try advertising on additional platforms to reach a wider range of people.

5. Format your ad correctly

‌Like your website, your OTT ads should be responsive on all devices. Some people will access them on a typical TV screen, while others like to watch on smartphones and other devices. Your ad should not cut off on a smaller screen. It should be formatted to look the same regardless of the display method. If you’re shooting your ad on a phone, shoot in landscape mode. This way, your ad can stretch across a TV or computer screen, and it can display properly when a phone is flipped to landscape mode.

When researching ad guidelines for different OTT platforms, check the file format required for your final video. Some OTT platforms like Smart TVs don’t support all types of video. In general, most platforms are compatible with the MP4 format, so produce your ad this way unless otherwise specified.

6. Know your target market

‌One benefit of targeting OTT ads is that you can get your ad directly in front of people in your target demographic instead of making a generic ad and hoping it stands out. But you want to make an ad that resonates with your target market. Knowing the psychographics of your audience helps you create ads that resonate with them.

‌Communicating the benefits of your product to your target audience is a smart practice across all of your advertising channels. Knowing your audience helps you determine which benefits of your product or service are most important to them. If you’re not sure, try a few different versions of your ad and run them at different times so you can track your ad metrics and determine which one is the most successful.

‌7. Tailor your ad to the platform

‌Along with streaming platforms, you can also buy OTT ads that run on certain apps that allow people to watch videos. Major sports leagues all offer apps on which people can watch highlights from their favorite teams. Apps like Vogue Runway, which is run by the popular fashion magazine, let users watch videos of fashion shows, celebrity interviews, and more.

‌These platforms also present opportunities for OTT ads. If you advertise on the NHL app, create content related to your brand that would resonate with someone who likes hockey. If you’re advertising on the app of an entertainment channel, include some royalty-free pop culture references in your ad.

Tailoring your ad to the platform on which you’re advertising is a good way to connect to viewers who are already interested in that type of content.

8. Make a variety of ads

‌If you regularly binge watch TV on streaming platforms, you are familiar with their tendency to run the same ads throughout a show or a series. Viewers of the show might get annoyed by the monotony after they’ve seen your ad numerous times. Switch up your ads to avoid leaving the audience with a negative image of your brand.

Getting Started

‌Now that you are familiar with OTT advertising concepts, you can start building your strategy. The best place to start is by setting your desired goals and developing a profile of your target market. You can use this information to choose the best platforms for your ads.

Once you have a strategy in mind, use your current or previous television ad campaigns to generate ideas. Set your budget and research different OTT platforms to determine the best use of your marketing budget.

‌Staying current on advertising trends, including OTT, not only builds your brand image as a relevant product or service provider but also lets you reach the millions of people who have already made the shift away from cable TV. Start building your strategy today and find your next customers directly in their living rooms.