Move over traditional TV commercials: There’s a new player in town.
Over-the-top (OTT) ads are a new form of advertising shown to consumers streaming their favorite shows and movies through smart TVs and other devices connected to the internet. While the content of an OTT ad is similar to that of the conventional commercial, the medium offers exclusive benefits that long-established TV advertising cannot.
The Difference Between OTT and Connected TV
Sometimes, people interchange the terms “OTT” and “connected TV (CTV)” when referring to these new names in advertising, but the two do differ. OTT, in particular, refers to the video content placed on streaming services, whereas CTV refers to the devices used to view OTT content, such as smart TVs, gaming devices, Roku, and the Amazon Fire Stick.
When you view OTT ads, you’re using a CTV device that connects to the internet. However, you’re also logged into a streaming service, like Hulu, Disney+, Amazon Prime, or Netflix. Companies purchase ad space with streaming services to share their OTT videos and commercials.
Benefits of OTT Ads
Think of OTT ads like social media or Google Ad campaigns. Both allow you to reach highly-targeted audiences, which is very difficult to do through traditional television commercials. You can’t choose who sees your ad when you buy ad space on a major network or local station, as it will play to anyone tuned into the program, but with OTT ads, it’s much easier to target your audience.
Here are a few more of the significant advantages of OTT ads:
Maximize Your ROI
Spending thousands to advertise to consumers with no interest in your services and products is a major disadvantage to traditional commercial advertising, but with OTT ads, you’ll see more bang for your buck with the ability to carefully select your audience.
You can do so based on demographics such as estimated income, age, location, and interests, and if you already track your audience through other channels, like social media, emails, and your website, you can use your list to retarget individuals who previously shopped with you or engaged with your company in some other way.
By selecting the audience that sees your ads, you’re more likely to see results in conversions. Your existing audience wants to learn more about your company’s products and services; people who are unfamiliar are simply far less likely to convert.
Improve Audience Engagement
People watching a cable news broadcast tend to switch the channel once the commercials come on or use that time to grab a snack. They don’t idly sit by, intent on seeing the subsequent three to five commercials that appear before their program comes back on the air.
To understand how OTT ads work, think of a YouTube ad that appears while watching your favorite channel. Usually, the ad is less than thirty seconds, and directly afterward, the content continues. OTT ads function in essentially the same way. One short ad plays, and the TV show or movie continues right after.
OTT ads are also (usually) unskippable, meaning the viewer can’t simply click a fast-forward button to bypass the ad. Instead, they must watch it if they want to see the next part of their program.
Unskippable, singular ads help increase consumer engagement. Their 15 or 30-second length is too short for a quick break, so most viewers simply sit through them. Companies who make the most of their viewer’s time with quality, appealing commercials are more likely to see further engagement from their audience in sales and website clicks.
The Market for OTT Ads Is Growing
One of the newest connected TV trends is coming from Netflix. Until late 2022, there were no ad-supported plans on the platform, but now, consumers who don’t mind a few ads while watching their favorite shows can benefit from the company’s inexpensive ad-supported plan for $6.99 monthly. Marketers expect Netflix to be a significant player in the OTT advertising arena in the coming months.
Aside from Netflix, several other prominent streaming services support ads, including Hulu, Disney+, HBO Max, Peacock, and Paramount. Companies have many options, and those who learn how to maximize the benefits of their OTT ads are likely to see returns in the form of higher revenue.
With OTT Ads, It’s Possible to Reach More Customers
OTT advertising is a growing market. More consumers are moving away from traditional cable TV plans and embracing streaming services for their benefits, like access to their favorite shows whenever they want, at a lower cost. If you’re not yet incorporating OTT ads into your marketing plan, it’s time to start! You’ll likely see higher levels of engagement and a healthy ROI from your investment.
