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What is OTT and What Are You Missing If You Are Not Doing It?

OTT has been steadily increasing in popularity over the past few years. It communicates in a way that resonates with modern audiences by providing access to a consumer base that isn't tied to only a TV. OTT is highly accessible, allowing businesses to access a broader range of customers with little to no additional effort. In this post, we'll talk more about what OTT is and how it can benefit your brand.

An Overview of OTT  

OTT or over-the-top refers to programming streamed to viewers digitally. Essentially, the television, videos, or movies are delivered over the top of the cable box, circumventing the dependence on cable for accessing a broad range of programming. Similarly, CTV or connected TV refers to the device that is internet enabled for streaming content. CTV devices include smart TVs, gaming consoles, and connected OTT devices like Apple TV, Roku, Chromecast, or Amazon Fire Stick. 

For advertising, OTT ads function similarly to TV commercials, and often both mediums use the same content. OTT ads air on free, on-demand channels like Pluto TV and IMDB TV, where viewers can watch the content with the OTT ads instead of paying for a subscriptionOTT ads can also be found on multichannel video programming distributors like Sling TV, YouTube TV, and Hulu + Live TV, combining prerecorded content and live broadcasts for subscribers outside of traditional broadcasting outlets. It gives advertisers multiple avenues to reach their intended audiences on their preferred devices, whether at home or away. However, remember that not all OTT is equal. Often if it is running on Hulu + Live TV or YouTube TV, it is not targeted the same as the capabilities of free subscription TV, such as PlutoTV.   

OTT Gives You Access to New Audiences  

Younger audiences like Millennials and Gen Z tend to use OTT at high rates. OTT ads are an excellent way to access this demographic. Ninety-one percent of young people in the 18-29 age group who don't have cable or satellite say it is because they can access the content they want online. OTT ads tend to be shorter, making them more palatable for younger audiences who eschew traditional advertising. 

Since they are not skippable and it isn't easy to switch platforms to avoid ads, OTT ads have high engagement rates. OTT ads can also be highly targeted since they are online. Online mediums provide analytics that is valuable for audience insight. Those insights are particularly helpful with younger OTT viewers who expect relevant, personalized, and contextual content.  


Ad Impact Is Growing  

OTT ads are becoming increasingly prevalent, especially as more streaming services become available. Some interesting facts:

  • In 2019, the growth in local OTT advertising spend outpaced the overall digital advertising spend growth rate by almost 7x. 
  • BIA Advisory Services forecasts an increase in OTT local ad spending, jumping to $2.37 billion by 2025 from $1.18 billion in 2021.  
  • Also, according to BIA, 41% of respondents increased their CTV/OTV ad spending in the last year, representing the largest increase of any other digital video tactic. 

OTT ads can serve a wide variety of marketing goals with increasing targeting, measuring, and scaling capabilities. They are ideal for brands who want more engaging impressions with a reach that traditional channels no longer capture. They are also a cost-effective way for new or up-and-coming brands to get TV ad coverage for the first time without the high price of broadcast TV. OTT ads make sense: consumers are cutting the cord with more frequency, so to reach them, advertisers must follow.  

OTT ads fit into all stages of the sales funnel. They don't simply provide upper-funnel awareness but can serve multiple sales goals. Depending upon your objectives, OTT ads can expand reach, increase frequency, accommodate sponsorship or programmatic, and facilitate digital measurement. OTT video can build your brand while engaging your audience as they move through the sales funnel.  

Reach New Levels of Engagement With OTT 

OTT ads are becoming an essential part of the advertising mix. They allow you to reach the full scope of viewers, from cord-cutters to younger audiences who've never subscribed to cable or satellite. OTT ads can engage your viewers with more personalization. Since they can't be skipped and it is more challenging to change platforms to avoid them, they naturally get more engagement than broadcast TV ads that can be avoided by simply changing the channel. 

Don’t overlook the impact of OTT ads: they capture the viewers' interest with relevant content, then keep it as they usher them through the sales funnel. OTT provides a cost-effective way for businesses of all sizes to leverage an audience that was previously available to those with generous advertising budgets. However, understanding how to access these ads can be difficult for those without experience due to the sheer number of platforms and differing business models. Working with an experienced digital marketing partner can simplify, streamline, and expedite the process.


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Angela Todd

Written by Angela Todd

Angela Todd is a Digital Marketing Consultant for Federated Digital Solutions. She has over 20 years in both sales and marketing. With experience in both the newspaper and radio industry, Angela found her passion working in digital marketing for the past few years. It was digital marketing where Angela finally felt like she wasn’t just a consultant to her clients, but a true partner and extension of their marketing team. Bringing her clients, a return on their marketing is what gets her out of bed every day.

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