Advertisers are expected to spend over $189 billion in OTT advertising this year — taking advantage of targeting, measurement, and attribution capabilities that rival digital advertising.
Basically, everyone wants in once they’re in the know. Not familiar with what OTT is in advertising? We’ve got you covered!
Over-the-top (OTT) advertising refers to video ads delivered through streaming services while viewers watch movies, TV shows, or other content. These ads can appear on a connected TV (CTV), but OTT also includes video ads shown on other devices like smartphones, tablets, computers, and gaming consoles.
Despite its growing popularity, some advertisers are still unsure how to effectively buy OTT ads. Here’s how you can explain it to them in a few simple steps.
Before you spend even one dollar, it’s important to identify your goals for your OTT campaign. Some questions you might want to ask yourself are:
To help marketers create a data-driven approach to planning against their goals, there are tools that help streamline the entire process. This includes:
Audience forecaster tools can also bring the longstanding tradition of delivery guarantees on linear TV to the world of OTT.
Here’s a little cheat sheet for your audience targeting:
At a topline, a CTV advertising technology partner will connect advertisers (brands) with audiences (people) watching streaming TV. And the best CTV platforms will provide you with everything you need to succeed with connected TV advertising — from start to finish. This includes tools for things like forecasting, planning, targeting, activation, real-time optimization, and measurement and attribution.
When it comes to choosing a provider or partner, you can really go in two directions:
This provides access to a network of OTT ad inventory from a variety of publishers, where advertisers can bid in real-time and often secure prices lower than direct partnerships.
This means working directly with the hardware providers such as Smart TV makers, dongles, and even gaming consoles.
This is when advertisers work directly with a walled-garden like Hulu, which controls the entire process and sets its own prices.
Check out the chart below to get a deeper understanding of the pros and cons of both:
One emerging trend to note for OTT buying is the Private Marketplace (PMP), which is a customizable, invitation-only marketplace where premium publishers make their inventory and audience available to selected buyers. An eMarketer report found that programmatic ad buying on private marketplaces overtook open exchange buying, becoming the most popular real-time bidding (RTB) approach.
This shift towards PMPs benefits not only national brands but also local advertisers, who can leverage premium content for targeted campaigns in their communities. The PMPs are better equipped to navigate the changing cybersecurity landscape and enable access to household-level data metrics. Additionally, they prevent the commodification of OTT inventory, by awarding value to premium content. To put it simply, they make sure an ad next to a cat video and an ad next to House of the Dragon are NOT classified as the same thing.
It’s important to remember that OTT doesn’t just mean TV on the big screen — OTT refers to video streaming on any device with an internet connection. For example, some viewers tune in to OTT content via smartphones, tablets, desktops, and laptops.
Which devices will your ads be targeting? How long will your spot be (6 seconds, 60 seconds, something in between)? Get all your specs in order before production.
More than 3.5 billion people around the world are using subscription OTT services in 2024, with a large portion relying on ad-supported options. The best part is that video completion rates (VCR) are in the 90% to 100% range — meaning most OTT video ads are watched nearly to completion.
With that said, viewers also expect more from ads alongside premium OTT content. It’s important to extend the premium viewing environment to your ads with quality graphics across devices. This includes everything from the ads displayed on viewers 4” smartphone screens, to 65” UHD with crisp, clear 4K clarity.
Traditionally, these sorts of premium TV ads could get pretty pricey, but now we have 4K quality capabilities right in our smartphones. Additionally, content consumption habits have changed, and this is important to take into account. For example, TikTok has revolutionized short-form content, which drives digital culture. Local advertisers can draw inspiration from creative platforms like TikTok to design ads that resonate with their audiences.
You’ve chosen a partner, you’ve given them your cutting-edge creative, and the OTT campaign is underway — now what? A couple things, actually…
Similar to digital channels like Facebook, Instagram and search, OTT has the ability to deliver real-time data, optimization, and direct attribution to track ROI down to the penny with confidence.
You should constantly monitor your results throughout your campaign, and understand where your high-performing personas and markets are. Then, reallocate dollars and double down with those parameters.
For advertisers, this digital-esque precision and tools like QR codes can help bridge the gap between TV and mobile, creating a seamless cross-device experience for viewers. This is essential because more than 70% of consumers use smartphones while watching TV, and QR code-enabled creative can be a key tool to turn TV into a full-funnel marketing tool for advertisers.
For local advertisers, tools like QR codes are essential for driving foot traffic and local conversions directly from OTT campaigns.
The beauty of OTT is the convergence of the premium TV environment and the digital targeting, measurement, and attribution capabilities. This means the ability to measure and validate ad impact against a variety of KPIs.
Depending on your campaign goals, you can be measuring lift metrics like brand awareness, perceptions, familiarity, favorability, and purchase intent, as well as bottom-of-funnel metrics, like location attribution, site attribution and conversion, offline sales lift, and foot traffic.
Now that you understand how to buy OTT advertising, the final consideration is cost.
Related content: CTV Measurement: 8 CTV Metrics Local Advertisers Love
OTT advertising costs can vary significantly based on your targeting and campaign strategy. Using a cost-per-thousand (CPM) model, you might pay between $25 to $40 per 1,000 impressions.
In comparison, linear TV ads during primetime typically cost more. For example, a 30-second ad during Bachelor in Paradisecosts around $58 per 1,000 impressions, while a similar spot during Grey’s Anatomy averages $49 per 1,000 impressions.
As more viewers shift from traditional TV to streaming platforms, the gap between OTT and linear TV pricing is expected to close, especially as economic conditions and changing viewership trends reshape the industry.
For the majority of brands, OTT advertising is going to play an important role in their marketing strategy. And there is no better time than the present to start testing the waters and learning the ropes.
Help your advertisers buy OTT ads the easy way—check out Madhive’s OTT platform.
