How OTT Advertising Can Grow Your Business

In today’s digital age, businesses are constantly seeking innovative ways to reach their target audience. One method that’s gaining significant traction is O-T-T (Over-The-Top) advertising. Let’s dive into how this powerful tool can help grow your business.

What Is O-T-T Advertising?

OTT advertising refers to promotional content delivered directly to viewers via streaming video services or devices, bypassing traditional cable, broadcast, and satellite television platforms. This includes ads shown on streaming services like Netflix, Hulu, Amazon Prime Video, and other streaming platforms that deliver content directly over the internet. According to WebFX, “With OTT advertising, you can promote your products and services to your target audience who watches content over the Internet instead of satellite or cable TV.”

The term “Over-The-Top” comes from the ability of these services to go “over” the traditional media distribution channels and “bypass TV providers. OTT services don’t need to worry about things like a broadcast schedule or geographic limitations. Viewers can access their content at any time of the day or night,” emphasizes this Forbes article. OTT advertising is part of a larger shift in media consumption, where viewers are moving away from traditional TV and towards on-demand, internet-delivered content.

How Does O-T-T Advertising Work?

OTT advertising works by inserting targeted ads into streaming content. Unlike traditional TV advertising, OTT platforms can use data about viewers’ preferences, behaviors, and demographics to deliver highly targeted ads. This means your ads are more likely to reach the right audience at the right time.

Here’s a more detailed look at the process:

1. Ad Inventory: Streaming platforms, such as Netflix, Hulu, and Peacock, offer ad space within their content, similar to commercial breaks in traditional TV.
2. Data Collection: OTT platforms collect data on viewers’ watching habits, preferences, and often demographic information. You or your agency can review this information to ensure you place ads where your target audience is watching.
3. Targeting: Advertisers use this data to target specific audience segments. One benefit of O-T-T is that you can get ultra-specific with your target audience, which isn’t possible with Broadcast TV advertising.
4. Ad Serving: When a viewer watches content, the OTT platform’s ad server determines which ad to show based on the viewer’s profile and your targeting criteria.
5. Delivery: The ad is then seamlessly inserted into the content stream.
6. Measurement: The platform tracks various metrics about the ad’s performance.

Unlike traditional TV advertising, OTT platforms can use data about viewers’ preferences, behaviors, and demographics to deliver highly targeted ads. This means your ads are more likely to reach the right audience at the right time, increasing the efficiency of your ad spend.

Nail Down Your Target Audience

One of the biggest benefits and advantages of OTT advertising is its precise targeting capabilities. You can target viewers based on a wide range of factors, including:

• Demographics: Age, gender, income level, education, occupation
• Geographic location: Country, state, city, or even zip code
• Viewing habits: Types of shows watched, time of day, frequency of viewing
• Device types: Smart TVs, mobile devices, gaming consoles, etc.
• Purchase history: What goods and services the viewer purchased
• Interests and behaviors: Based on viewing history and other online activities
• Life events: Recently moved, got married, had a child, etc.

Defining and understanding your target audience can help your business create more effective and relevant campaigns that resonate with potential customers. This level of targeting allows for much more efficient ad spend than traditional broadcast advertising.

To nail down your target audience:

1. Analyze your current customer base
2. Conduct market research
3. Create detailed buyer personas
4. Use A/B testing to refine your audience segments

Remember, the more specific you can be with your targeting, the more effective your OTT advertising campaigns will be.

Get In Front of a New Audience

OTT advertising allows you to reach cord-cutters and cord-nevers – people who don’t subscribe to traditional cable or satellite TV services. This growing segment of the population is often younger and more tech-savvy, representing a valuable market for many businesses.

According to a Pew Research Study in 2017, “About six-in-ten of those ages 18 to 29 (61%) say the primary way they watch television now is with streaming services on the internet, compared with 31% who say they mostly watch via a cable or satellite subscription.” 

A more recent Pew Research Study, conducted in 2021, states, “The share of Americans who say they watch television via cable or satellite has plunged from 76% in 2015 to 56% [in 2021]… Some 71% of those who do not use cable or satellite services say it’s because they can access the content they want online, while 69% say the cost of cable and satellite services is too high..” These statistics show a huge opportunity for businesses to reach audiences through O-T-T, as these audiences are increasingly difficult to target through traditional advertising channels.

Moreover, OTT advertising can help you:

• Reach viewers during prime time without the high costs associated with traditional TV advertising
• Target niche audiences that traditional media might underserve
• Engage with viewers who are more receptive to advertising, as they often choose ad-supported content to save money

By leveraging OTT advertising, you can expand your reach and introduce your brand to entirely new segments of potential customers.

Get Personal

Personalization is key in modern advertising, and OTT excels in this area. With access to viewer data, you can create and implement personalized ad experiences that resonate with your audience on a deeper level.

Here are some ways to leverage personalization in OTT advertising:

1. Customized ad content: Create different versions of your ad to appeal to different audience segments. For example, a car manufacturer might show ads featuring SUVs to families and sports cars to younger viewers.
2. Dynamic ad insertion: This technology allows you to change the ad shown based on who’s watching, even if they’re streaming the same content.
3. Interactive ads: Engage viewers directly with interactive elements. For instance, a viewer could use their remote to explore different product features or even make a purchase directly through the ad.
4. Sequential storytelling: Tell a story across multiple ad exposures, each building on the previous one based on the viewer’s engagement.
5. Contextual relevance: Show ads that are relevant to the content being watched. For example, advertising cooking products during a cooking show.

Personalized ads tend to perform better, leading to higher engagement and conversion rates. According to a study by Innovid, personalized video ads drive a higher click-through rate than non-personalized ads. “When compared to standard pre-roll, interactive CTV video formats, inclusive of choice- and non-choice-based ads, also generate more than 600% lift in engagement,” Innovid states.

Measure, Measure, Measure

One of the most powerful aspects of OTT advertising is its measurability. Unlike traditional TV advertising, OTT platforms provide detailed analytics on your ad performance. According to Amazon, “Streaming TV measurement is more comprehensive, and advertisers can leverage audience insights to understand the audiences their campaigns reach. Some useful metrics to measure campaigns are brand reach, brand lift, and offline lift.” The accessibility of these metrics allows for data-driven decision-making, allowing you to optimize your campaigns continuously.

Key metrics you can track include:

1. View-through rates: The percentage of viewers who watched your entire ad.
2. Completion rates: Similar to view-through rates, but can also show at what point viewers stop watching.
3. Click-through rates: For interactive ads, this shows how many viewers engaged with your ad.
4. Conversion rates: Track how many viewers took a desired action after seeing your ad.
5. Frequency: How often a unique viewer sees your ad.
6. Reach: The number of unique users or viewers who saw your ad.
7. Brand lift: Measurement of the increase in brand awareness or favorability after ad exposure.
8. Audience insights: Detailed breakdowns of who is watching and engaging with your ads.

To make the most of these metrics:

• Set clear KPIs (Key Performance Indicators) before launching your campaign
• Use A/B testing to compare different ad creatives or targeting strategies
• Review your analytics often and adjust your strategy based on the results
• Compare your OTT advertising performance with other marketing channels

This data allows you to refine your strategy, optimize your ad spend, and demonstrate clear ROI to stakeholders.

Expand Your Reach, Rinse, & Repeat

As you gather data and refine your OTT advertising strategy, you can expand your reach. This might involve:

1. Testing different ad formats (e.g., pre-roll, mid-roll, interactive)
2. Expanding to new streaming platforms
3. Adjusting your targeting parameters
4. Creating new ad content based on performance data

The key is to continually analyze your results, learn from them, and iterate on your strategy. This process of continuous improvement can help you steadily grow your business through OTT advertising.

Remember, the OTT landscape is constantly evolving, with new platforms, technologies, and viewer behaviors emerging regularly. It is important to stay updated on industry trends and be ready to adapt your strategy as the market changes.

Understanding the Limitations of OTT Advertising

While OTT advertising offers numerous benefits, it’s important to be aware of its limitations to develop a well-rounded marketing strategy:

1. Ad Blockers and Skip Features: Some viewers use ad-blocking software or quickly skip through ads when possible, potentially reducing your ad’s visibility.
2. Platform Fragmentation: The OTT landscape is fragmented across numerous platforms and devices, meaning there are many different streaming platforms and SmartTVs out there. This can make it challenging to achieve broad reach without managing multiple campaigns across different platforms. In addition, “OTT advertising is still a very fragmented territory, lacking industry-wide standards and guidelines,” Clearcode states.
3. Ad Fatigue: With highly targeted ads, there’s a risk of showing the same ad to a viewer too frequently, leading to ad fatigue and potential negative sentiment.
4. Content Restrictions: Some premium OTT services don’t allow third-party advertising, limiting your reach on these platforms.
5. Privacy Concerns: As OTT advertising relies heavily on user data, evolving privacy regulations and increasing consumer awareness about data usage could impact targeting capabilities in the future.
6. Ad Length Restrictions: Some platforms have strict ad length requirements, which limit your creative options or require you to produce different versions of your ads.

To mitigate these limitations:

• Diversify your advertising strategy across multiple channels
• Create engaging, high-quality ads that viewers are less likely to skip
• Stay informed about privacy regulations and adjust your data usage accordingly
• Monitor frequency caps to prevent ad fatigue
• Invest in robust analytics tools to improve cross-device measurement

By understanding these limitations and planning accordingly, you can maximize the effectiveness of your OTT advertising campaigns while minimizing potential drawbacks.

Wrapping Up

In conclusion, OTT advertising offers a powerful way to reach and engage your target audience in the digital age. You can create highly effective advertising campaigns that drive business growth by leveraging OTT’s targeting capabilities, personalization options, and robust analytics. As streaming services dominate today’s media landscape, OTT advertising is poised to become an increasingly important tool for businesses of all sizes.