In a world of constantly growing technology, it can be hard to keep up with advertising trends in the digital age. This ain’t your dad’s TV, as the way we consume media has completely changed. Historically linear cable may have had the largest piece of the pie, but as of 2022 streaming viewership took over as the primary way people consume media. The acronyms “OTT” (Over-The-Top) and “CTV” (Connected TV) represent a monumental shift–not just in the technology we use to consume media, but also the way businesses can reach their audiences. Let’s talk about what OTT and CTV advertising are, their benefits and whether these forms of advertising are right for you and your business.
What is OTT Advertising?
Over-The-Top advertising, or OTT, refers to advertising carried on streaming channels through the internet, going “over the top” of traditional distribution methods like cable, satellites, and telecommunications networks. It includes video-on-demand (VOD) platforms, streaming services, and even social media, allowing advertisers to connect with consumers in increasingly innovative and personalized ways.
What is CTT Advertising?
Connected TV advertising, or CTV, is a segment of the OTT ecosystem that specifically targets video content on smart TVs or digital devices connected to the internet. A few examples of these devices include Amazon Fire Sticks, Roku’s, and gaming systems. Connected TVs are a relatively new thing but aren’t going anywhere anytime soon. As of 2022 87% of households have an internet connected device, up from 38% just a decade prior. By leveraging CTV advertising, businesses can tap into the growing demographic of viewers who are “cord-cutters”.
Important Note:
CTV advertising is exclusively for television screens, while OTT advertising can be done on television, tablets, or on an iPhone/Android phone. In terms of getting the definitions correct, you could think of it like a square and a rectangle. All squares are rectangles, but not all rectangles are squares. Similarly, all CTV advertising is OTT, but not all OTT advertising is CTV.
Emerging Trends in OTT Advertising:
OTT and CTV advertising are increasingly becoming the norm. As technology grows, so will our abilities to segment and target very specific audiences. Here are a few concepts and trends to keep a lookout for in the world of OTT advertising:
AVOD (advertised video-on-demand): Consumers accept advertisements in their streaming packages in exchange for lower prices (Hulu as an example).
Reaching across screens: Targeting audiences through different screens. If someone is watching something on their smart TV, then log onto the same streaming service and profile on their phone you can still advertise to them.
Addressable advertising: This form of ad delivery uses data insights to deliver highly personalized advertising to individual households or even specific viewers. Imagine showing an ad for dog food only to homes with dogs or promoting retirement communities exclusively to households with members over 55. Addressable advertising has the potential to vastly increase advertising ROI.
- Personalized ads: Ads that adapt to user preferences through data. When prompted, users may pick a specific ad given choices, what ads are skipped when given the option, etc. Ads become more personal over time through this data.
- Enhanced local advertising: Personalized ads, but for an entire area. You wouldn’t advertise for in-n-out in states that don’t have them, right?
- Hyper targeting: Like local advertising but even more specific to households. Focusing on advertising to people would specifically care as opposed to mass advertising. Unlike traditional TV commercials, OTT and CTV ads allow for laser-focused targeting. Want to reach Millennials living in urban areas who are interested in sustainable fashion? Not a problem.
The Advantages of OTT and CTV Advertising:
We’ve now explained what OTT and CTV are. If you happen to be on the fence about these forms of advertising here is a list of their advantages compared to more traditional advertising methods:
Cost effective: OTT AND CTV help you target specific areas, households, or even individuals. In this way, saving you time and money advertising to demographics already interested in your product. Mass marketing is expensive, so finding ways to target demographics with guaranteed interest will assuredly help business owners save money in the long run.
Versatility: Once the groundwork for your advertisement is laid, it can easily be shortened and reframed to fit into any OTT device.
A must watch: CTV ads are not skippable. Using CTV advertisements ensures your full message will be expressed.
Results are measurable: The measurements and analytics available for OTT and CTV campaigns are highly detailed, offering immediate access to insights that can help you fine-tune what you want to deliver.
Interactive: OTT advertisements are often interactive or clickable, encouraging viewer engagement and immediate action.
The Disadvantages of OTT and CTV Advertising:
As Hannah Montana said, “nobody’s perfect”, which holds true even for methods of advertisement. Here are a few drawbacks to CTV AND OTT:
Learning the technology: As stated previously, technology is always changing, so keeping up to date with how these technologies work is imperative for success. Thankfully, articles like this, or working with Winslow Ranch Marketing can help close the knowledge gap.
Skippable: One significant challenge with OTT is the potential for ad skipping. Certain streaming platforms give consumers the ability to skip ads entirely, which can limit the effectiveness of your campaigns. This is not an issue for CTV generally.
Not clickable: Because CTV is done on a television screen, interactivity is limited. CTV advertisements must focus on branding, influence recognition, and must be repeatedly delivered to be fully effective.
Conclusion:
The digital age has changed how we consume media, and by extension, how businesses market their products and services. OTT and CTV have emerged as frontrunners in reaching audiences in a targeted, measurable, and increasingly personalized way. As technology and our consumer habits evolve, the potential for growth increases exponentially. For businesses willing to dive in, the rewards may increase exponentially just as well. To learn more, contact Winslow Ranch Marketing.