The state of over-the-top (or OTT) television has evolved rapidly over the course of the past calendar year. As new streaming television services have entered into the OTT space, consumer media consumption through OTT services has jumped since the start of the pandemic—and that increase in OTT streaming has more or less maintained itself in the months since that dramatic shift.
Before we go any further, let's revisit what the term "over-the-top" television means. You have likely heard about OTT when exploring advertising options for your business, and you likely even view some of your favorite shows via an OTT service. OTT refers to any streaming service that delivers content over the internet, often "over the top" of another platform.
OTT’s rise and diversification has significant implications for local businesses looking to advertise across these established and emerging streaming options. But the explosion of OTT ad options can also be overwhelming for any business to understand. At the same time, the opportunities created by OTT advertising might not be obvious to newcomers hoping to build their brand through this engaging, promising ad channel.
Let’s break down the biggest trends in OTT, and how they affect your company’s ad strategy. Here are four things to keep in mind as you consider your options with OTT.
1. Ad-Supported OTT Services Are On the Rise
We’re all familiar with the leading OTT services that have captured market share: Netflix, Hulu, Disney+, and YouTube have all become household names. But as the OTT streaming market matures, new platforms are arriving on the market—most notably, services that offer free content in exchange for ad delivery.
These ad-supported OTT options are gaining traction among households that want to expand their streaming options without increasing their monthly spending on cable and OTT services. Many families may be facing household budget constraints and overall consumers are watching their spending. In 2020, growth for ad-supported video streaming services nearly doubled the growth rate for non-ad-supported services. As consumers seek out ad-supported content, your business will see its ad inventory options increase over time.
2. Cable and OTT Ads Can Co-Exist
A common misconception about OTT ads is that they exist separately from cable TV advertising. For businesses that want to keep their ad strategies simple, they often end up deciding to focus on one versus the other.
As consumer behavior adapts to watching both cable and streaming, your marketing tactics can (and should) adapt as well. OTT and cable TV exist alongside one another in packaged services offered by your local cable provider. Your cable TV service, for example, may give you access to both cable TV channels and a combination of free and premium OTT services. Cable TV content is also increasingly offered through OTT options, giving customers more choice in how, when, and where they watch video—and giving your local business more flexibility in how you target these audiences.
When cable and OTT are delivered through the same service provider, you can build campaigns and target audiences while working with a single advertising platform. This simplifies the task of incorporating OTT into your existing cable TV strategy, and makes it easier to optimize your ad budget across these options.
3. Expanded OTT Improves Your Targeting Options
Cable TV offers a number of tools and techniques to target ads to a focused, relevant audience. The granular data and retargeting options—especially across multiple channels—play complementary roles to cable TV targeting, and gives your business greater flexibility in the types of audiences you target.
Your business may choose to launch multiple OTT ad campaigns that each target different segments of your customer base. You can also reach your audience across different devices, delivering ads through connected TVs as well as mobile devices and even desktop computers. With more ways to target your customers, you can refine your strategy over time and lean into the strategies that deliver the best ROI.
4. OTT Can Offer Better Attribution and Transparency
Thanks to the granular data generated through OTT services and the resulting ad campaigns, your business can achieve better transparency into the performance of these campaigns—particularly when compared to other ad campaigns that don’t leverage digital channels. The data created through OTT advertising supports your ad attribution to better understand campaign performance in a multi-channel ad strategy. Ultimately, this helps you optimize your spending and lean into the ad campaigns that offer the greatest value to your business.
OTT advertising can be a cost-efficient and high-performance advertising channel for your business. But if you’re unsure how to sort through these options and develop an ad strategy that suits your budget and advertising goals, seek out a partner that can collaborate on building and launching this strategy. Cox Media is here to help—contact us today to get started.