What is OTT Advertising?

You’re familiar with Netflix and YouTube. And you might know someone with a smart TV or a Roku.

But you probably don’t know what OTT advertising is, right?

OTT stands for over-the-top.

Quick history lesson

Back when TV was really a giant box standing in a living room, they used to have cable boxes that sat on top of the TV called set-top boxes.

Nowadays, however, streaming services use the internet and bypass (or go over) these now outdated devices, hence over-the-top.

OTT advertising is buying media on channels like:

  • YouTube TV
  • Amazon Fire TV
  • Hulu
  • Samsung Ads, and
  • other streaming services

Why are we talking about OTT advertising?

Because it has many benefits, and it’s accessible to smaller players too.

Here are the basics of what you should know:

Ad-supported OTT services are on the rise

In 2020, the growth rate for ad-supported streaming services almost doubled the growth rate for ad-free streaming services.

People do not like it when ads interrupt a video, but they still like to save money and ads are sometimes more tolerable than having another subscription to pay each month.

Better targeting

With traditional cable TV advertising, you can only target by designated market area.

With OTT advertising, you can break your targeting down into:

  • Zipcodes (much like with PPC geotargeting)
  • Devices
  • Demographics
  • Behaviors
OTT advertising works without third-party cookies

This smells fresh like lavender for marketers. And here’s how it is possible:

– Targeting is contextual

You target categories of TV/video content rather than individuals. Obviously, it won’t be as granular as Facebook Ads pre-iOS14. But…

– You’re using first-party data without having access to it

Streaming subscription services gather a sufficient amount of first-party data from users.

– Viewers can’t skip OTT ads, which means they have a higher completion rate.

– If you deliver OTT ads programmatically, you’re able to view performance analytics. You’ll know what’s working and what’s not.

Given all the previous characteristics, OTT advertising can be a cost-efficient channel to maximize your overall ROAS.

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