A Marketer’s Complete Guide to Over-the-Top (OTT) Advertising in 2022

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The new normal is for content to be streamed via the internet. Advertisers must respond with strategic, well-thought-out ads as viewers move their viewing patterns to various online digital formats. This is the power of over-the-top (OTT) advertising.

What is Over-the-Top (OTT) Advertising?

If you’re unsure what OTT means, think of it as the method by which the majority of your audience consumes content. Whatever your sector or product, there’s a strong likelihood that most of your audience has watched live-streamed television. This indicates that they are OTT viewers, and you should consider using OTT advertising to reach them.

The term “over-the-top” (OTT) refers to the streaming content that we are all familiar with. As a result, OTT advertising refers to a company’s ad placements and ad strategy on those channels to send their marketing message.

The Basics: What is Over-the-Top Television?

Some people are unsure what the term “over-the-top” (OTT) means in the context of media advertising. OTT stands for ” over-the-top” because the video is delivered over the top of standard cable and satellite services. Traditionally, cable or satellite boxes were placed on or underneath the television. OTT (or streaming) content does not require a set-top box. As a result, this content extends “beyond” the standard cable box. 

OTT Ads / OTT Device Types

Any device that can transmit streaming content qualifies as an OTT device. You’re probably already familiar with some of these, but here are a few examples:

  • Smartphones, tablets, laptops, and desktops 
  • Smart televisions
  • TVs that use an external device to connect to the internet (i.e., Roku, Chromecast, Fire Stick, etc.).
  • Gaming consoles such as the Nintendo Switch, PlayStation 4, and Xbox One can be used to broadcast content to TVs
  • Blu-ray players with Wi-Fi

OTT Ad Spending Trends and Top Advertisers Report – United States

The success of OTT advertising depends on reaching people when they are watching content on these devices. Because modern audiences consume video material, major marketing businesses can no longer rely on 30-second TV advertising.

VOD services, such as Netflix, Amazon Prime, Hulu, and other apps that allow users to stream their favorite entertainment, are called that for a reason. VOD stands for video on demand, which means that viewers can watch whatever content they want, whenever they want it. As a result, over-the-top advertising must reach the viewer, but regular linear television advertisements do not.

Types of Over-the-Top (OTT) Ads

When it comes to OTT advertising, a marketer has three main alternatives:

Marketers communicate directly with an OTT content provider via Publisher Direct. This option allows you more control, but it’s also more expensive and only gives you a limited amount of exposure and reporting.

Platform Direct. Advertisements would be acquired directly from an OTT device’s provider, such as Roku or Fire TV.

Demand-side platforms (DSPs) use AI technology to optimize ad pricing and placement. Programmatic bidding allows for more cost-effective bidding and better targeting, allowing less control over campaigns.

CTV Digital Advertising Shows Unexpected Growth during the Covid-19 Pandemic

How Does Over-The-Top (OTT) Advertising Work?

Companies can buy over-the-top advertising through a guaranteed media buy or real-time programmatic bidding, just like traditional TV advertising. A guaranteed media buy gives the advertiser a set price and a set number of impressions based on the audience reach and frequency of the ads. These components of the advertising contract would be worked out ahead of time.

If an advertiser chooses to buy programmatically using a DSP, they will be able to browse ad placement and inventory options. Using a real-time bidding system for your OTT ad placements can provide you with the following benefits:

  • Competitive pricing
  • Targeting and analytics based on in-depth data
  • In-Depth Reporting
  • Real-time optimization

As part of an entire, holistic campaign approach, strategically utilizing these elements of OTT advertising can only enhance the success of other platforms such as display, native, and video advertising.

OTT Advertising’s Pros and Cons

There are other reasons to consider OTT advertising and some of the high-level capabilities stated above. Some of the more powerful instances are as follows:

While most viewers despise advertisements, they also hate wasting their money. Traditional cable or satellite providers tend to be more expensive than ad-supported streaming services. The “cord-cutting” phenomenon emerged as a result of this.

Viewers rarely skip OTT commercials (in many cases, there is no opportunity to fast forward through them). As a result, more people will see your message (ad pods are smaller in length), and your video advertising will be more successful. And, because your customers are aware that they are watching ad-supported content, they are unconcerned about being forced to watch your advertisements. It’s a small fee to pay to obtain free access to their favorite shows.

OTT Advertising’s Common Challenges and Solutions

Although OTT advertising is an excellent way to reach your target audience, no platform is flawless. You should be aware of the following OTT advertising disadvantages:

There is no “common language” for OTT advertising, making overall advertising campaigns more challenging to manage. There are numerous platforms available. 

While OTT advertisements are clickable and unskippable, this comes with advantages and disadvantages. Advertisers are restricted to using a specific ad format to comply with the provider’s requirements.

When strategizing and launching your campaigns, keep an eye out for these hazards. As a result, you’ll be able to get the most out of your OTT advertising while reducing the risks.

Advertisement on linear TV vs. OTT vs. CTV

In the realm of TV advertising, these three terms are frequently employed. The phrases are sometimes used interchangeably for OTT vs. CTV, although this can be confusing.

The content your audience watches on Netflix, Hulu, and Amazon Prime is known as over-the-top (OTT). The devices used to stream that programming are connected TV or CTV. Smart TVs, gaming consoles, and TVs with CTV devices such as Chromecast, Amazon Fire Stick, and Roku are examples. Traditional broadcast television, as well as its advertising possibilities, are referred to as linear television.

OTT and its Future

Blogs, articles, social media platforms, and e-commerce advertisements are examples of online content that aren’t going away anytime soon. On these platforms, there has also been a drive toward video. While these aren’t necessarily OTT channels, they demonstrate that the audience (and demand) for video content is increasing.

Despite technological advancements, marketers must still adhere to sound marketing principles. Your message must be displayed where your target audience resides for the most effective and efficient means of spending your marketing dollars.

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About Author

Barb has worked within the digital advertising and marketing space for over 20 years. Over the years, she found it difficult to find information on the simplest of subjects tied to the digital marketing space, so she decided to embark on a journey to create a space that others may appreciate.

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