For the average business owner, navigating and understanding the world of OTT (over the top) and Connected TV (CTV) can be overwhelming to say the least.
Every media company and digital marketing agency you come into contact with seems to be declaring that what they sell is the best. As a business owner, you want to make sure that you’re able to navigate the most effective strategy for your business.
Let’s start by covering some basic information that you should know, and then we’ll share some questions you should be asking your OTT marketing rep.
WHAT YOU SHOULD KNOW
WHAT IS OTT?
OTT refers to streaming video content that is served to viewers over the top of the traditional closed television system. With OTT, users don’t need to subscribe or pay a cable or satellite company to watch video content since the content is served via the internet. Anytime you are streaming video, it can fall under the OTT umbrella.
WHAT IS CTV?
CTV is a television that has access to an internet connection and can load or stream digital content. This can be a Smart TV with apps pre-loaded or a TV using a device such as an Amazon Firestick or Roku. This is also part of the OTT umbrella. When a marketer is talking about CTV advertising, they are referring to OTT ads delivered on a CTV. OTT ads can also be delivered on mobile devices, computers, gaming consoles — essentially, any device that connects to the internet to stream video.
For the sake of simplicity, we will refer to OTT advertising for the remainder of this blog.
WHY IS OTT/CTV AN IMPORTANT PART OF MY DIGITAL MARKETING STRATEGY?
Paid TV viewship peaked in 2013. Since then, consumers have been flocking to CTVs and OTT services like Netflix and Hulu. Many consumers have become cord cutters by cancelling their cable or satellite TV services, and others are cord-nevers, which means they’ve never paid for TV services.
In 2024, the number of cord-cutters and cord-nevers is expected to reach 138.1 million in the U.S. and finally surpass cable subscribers, which is expected to drop to 129.3 million, according to Insider Intelligence.
Advertisers are following suit. Insider Intelligence also predicts that OTT video ad spending will be near $10 billion by the end of this year.
Not only is there an ever-growing audience for OTT content, there are other benefits of OTT advertising. With broadcast and cable TV, advertisers can choose channels and time slots for their ad to play, but there’s no way to accurately track how many people saw the ad.
OTT allows advertisers to use demographic and behavioral targeting to ensure their ads are delivered to people who are most likely to be interested in their products or services. Since these ads aren’t skippable, we can track exactly how many devices the ad was delivered on and know that someone watched it. We can also layer in additional tactics, like addressable geofencing, to better capture a business’s target audience.
QUESTIONS TO ASK YOUR MARKETING REP
Now, let’s share a few questions that you should ask your OTT marketing rep.
WHAT STREAMING PLATFORM OR APP WILL MY VIDEO PUBLISH ON?
The world of streaming video is wide, and there are a lot of different platforms that an OTT ad can be delivered on, each with their own targeting capabilities.
For example, cable and satellite companies will deliver your OTT ad to users who are streaming their cable content online. Most of these companies also have contracted deals with Hulu Live or YouTube TV, so your commercial could be running on these streaming platforms to make up for the cable or satellite company that has a smaller streaming audience. While this is all video streaming and technically OTT, the targeting capabilities on these platforms are nearly nonexistent.
There are more targeting capabilities on AVOD (advertising video on demand) or FAST (free ad-supported streaming TV) publishers such as Pluto TV and Tubi. More than half of Americans prefer AVOD and FAST video streaming services over SVOD (subscription video on demand) services that cost more to avoid ads, according to Deloitte’s 2022 Digital Media Trends survey.
Some marketing reps may dance around this answer or say the ads are targeted, but the full targeting functionality is not there. The best way to know how targeted your OTT/CTV ad will be is price. The higher the cost, the more targeted.
WHAT IS THE TYPICAL COST OF OTT ADVERTISING?
The cost of OTT advertising can vary, and the key difference in price is the targeting capabilities. OTT ads with a CPM of $20-$30 or less is most likely a run of site inventory placement on a cable or satellite streaming platform or a platform like YouTube TV.
Programmatic OTT buys with detailed targeting capabilities are closer to a CPM of $36-50.
HOW OFTEN SHOULD I RUN AN OTT CAMPAIGN?
This really depends on your goal.
If you are running a campaign for a specific event, you want a long enough campaign to have the right amount of frequency for the consumer. A 90-day campaign can be enough time for a specific message.
If your goal is to maintain top-of-mind presence regularly, having ads running on an ongoing basis is a great strategy. Keep in mind that you will want to change out the creative every 30 to 90 days to stay fresh. This strategy can bring a high return on investment and keep your product or services top of mind.
DOES IT MATTER HOW MANY IMPRESSIONS I BUY?
Yes, it does, but it depends on your goal. OTT advertising is unskippable, which can help reduce the need for high impressions, but you still want to make sure your ads are delivering at a good frequency.
Consider your goal, your message, and how large your target audience is. That can help you determine how many impressions you need. And, of course, once your campaign is running for a month, you can check your frequency and increase or reduce impressions as needed.
At Federated Digital Solutions, we typically recommend a minimum of 75,000 to 100,000 impressions per month for a 30-day campaign.
OTT and CTV advertising can be a challenging digital marketing product to understand because there is so much to it. That’s why it’s important to make sure your marketing partner is educated about the subject and selling a credible strategy that will help your business. Otherwise, you could end up spending lots of money on marketing that doesn’t give you a return on investment.
If you have more questions about OTT, Federated Digital Solutions is here to help you. Contact us to get started.
Shannon Allen is the Chief Revenue Officer for Federated Digital Solutions. She has over 25 years of experience in sales and marketing and over 15 years more specifically working in the digital world. Her passion for digital marketing is what drives her to find the best digital solutions for clients as well as for FDS. Shannon believes that true marketing starts after the sale with strategic campaigns and detailed reporting to help all FDS clients with an ROI, so they see the value in digital marketing.