You Ought to be Advertising on OTT

The Advertising Power Behind Over-The-Top Media


Calling all binge watchers! Yes, YOU with the tired, red eyes and half-melted pint of ice cream! We’ve all seen that “Are you still watching?” screen a few too many times. There’s those nights when you just can’t wait until tomorrow to finish a season of Breaking Bad. Maybe you missed the last few weeks of The Bachelorette, and now that the kids are in bed you can finally catch up on one… or three episodes.

No matter what your show is, you probably fall into one of three cohorts: Cord Cutters, Cord Shavers, and Cord Nevers. And every day, more people ditch the cord, favoring “OTT” to consume their favorite television shows and streaming content.

What are you doing to get your brand in front of those watchful eyes?


So what does OTT stand for, anyways? OTT is simply an acronym for the phrase “Over-The-Top”, as in you’re consuming TV content over and above the traditional mediums of analog, coaxial cable, or satellite. To sum up the official definition from the Interactive Advertising Bureau, it is any device that can connect to a TV, or functionality within the TV, that delivers internet-based video content (think Roku, Amazon Fire Stick, Apple TV, Xbox, or your Smart TV). These devices are the means to access Netflix, Hulu, and other streaming channels.

Within the overarching term of OTT, there is CTV, or Connected TV. Put plainly, it is a TV model that connects to the internet to stream digital content. CTV is simply a category of devices that live within the OTT universe.

So why is OTT so important for your advertising strategy?

Who’s down with OTT?

Every decade brings new disruptions to traditional industries. Uber stalled the taxi industry. Amazon is primed to close of more brick and mortars than ever. And now,  according to eMarketer, OTT is trending toward 181.5 million individuals subscribing to a video streaming service in 2019. This is largely due to the growing queue of award-winning exclusive content, live broadcast access, and the ability to cut cost.

As mentioned, these OTT users fall into three buckets:

  1. Cord-Cutters: These users cancel or waive cable and satellite television subscriptions in favor of internet-based services. Time, money, and exclusive content are all factors in why someone cancels their TV subscription. They are frequently adopting emerging technology as the world shifts from traditional mediums.
  2. Cord-Shavers: These users are in transition and are slowly reducing their traditional TV package. They are concerned about losing the content they love that hasn’t perfectly translated to a streaming service yet. They love their live news, sports, and scheduled programming, but are looking for ways to cut costs. This group is more likely to consume content from channels that provide services for free or at a reduced cost in exchange for in-stream ad spots.
  3. Cord-Nevers: These users are likely to be the Gen Z’ers, born with smartphones in their hands, who are highly unlikely to purchase a broadcast TV subscription in the future. Gen Z consumes most of their content through their mobile devices and even though they may not stream as frequently on an OTT device, they can still be targeted through the OTT apps they use (Hulu, Netflix, and other iOS and Android Streaming Apps).

As the OTT adoption continues to trend upward, it’s exciting to know that you can target these households with more granular targeting and smaller minimums than traditional TV buys.

OTT is trending toward 181.5 million individuals subscribing to a video streaming service in 2019.

Reaching People

Data is king, and audience targeting is where OTT stakes its claim for the TV throne. All the artificial intelligence, deterministic data, and other ostentatious technical buzzwords is what makes it so valuable to advertisers. The value all lies within the platforms and ad tech that allow you to access OTT inventory.

Accessing OTT inventory is achieved programmatically and through other ad exchanges. Targeting layers like device ID, age, household income, interests, behavior, purchase history, and geotargeting (even down to a household address) can be applied. Match all these layers to the programs and channels your audience frequents, and that coveted one-to-one brand experience becomes more attainable.

Do you want to target a soccer mom that’s been searching for fast, effective household cleaners to keep up with her kids’ messes? You can reach her. Are you a small credit union with goals to establish a localized footprint? Encourage in-market and new homebuyers to finance through your services. Do you own an auto repair shop, with an extensive mailer list? You can target your list to reach those individual households! OTT is an effective way to extend the targeting from other digital media buys and build your brand awareness.

Like traditional TV buys, ad waste is still possible. You can’t stop people from turning down the volume or taking a bathroom break. The risk is reduced with OTT’s targeting as compared to the buying broad audience impressions with traditional TV. Along with advanced targeting, content providers like Hulu are taking ad engagement a step further with interactive ads. Comparable to Pandora’s offering, a user can watch an ad or perform an action to gain access to ad-free content for a limited time. While traditional TV is limited to video, OTT continues to expand ad placement types with sponsored channel takeovers, display ads, interactive ads, and more.

For advertisers, the value gap continues to widen as traditional TV minimums historically require large budgets. In 2016, the average cost of a 30 second spot on national broadcast was around $123,000. You can approach a much more targeted video ad campaign at equivalent CPMs (typically $20-$30), with minimums around $10,000.

If you are planning a digital video campaign, OTT is worth your consideration due to its affordable entry level, its effective audience targeting, and its growth in users. As traditional media continues to see a decline in consumers, advertisers should always stay ahead of the curve through reaching target audiences on mediums with high engagement. Missing out on this opportunity may prove more disappointing than Season Eight of Game of Thrones.

Luckily, Defero can help – get in touch today to see how we can assist you with your paid media needs and more specifically how OTT may fit into your marketing mix.

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