What Is OTT/CTV Advertising?

Streaming media has opened a new front in advertising, and many businesses are clamoring to get their services and products in front of streaming audiences. If you’ve investigated this kind of marketing, you’ve probably encountered the terms “OTT” and “CTV.” Both play important roles in leveraging this kind of next-generation marketing, but many people use the terms incorrectly, creating confusion that can hamper marketing efforts. What exactly are OTT and CTV advertising, and how can you leverage it for the best possible results? Here is what you need to know.

OTT and CTV Explained

You will often hear people using the terms “OTT” and “CTV” interchangeably, but that is incorrect. Though they are closely related, they are different things.

OTT stands for over-the-top, and CTV stands for connected TV. OTT refers to content that is accessed “over the top” of the television. Customers access it via the internet, instead of a typical television or cable connection. If you use streaming services like Netflix or Hulu, then you have watched OTT content. If you watch OTT content from streaming services on your television, rather than your computer, then you have used a CTV. CTVs are TVs that can connect to the internet. CTVs typically integrate with Apple TVs, Rokus, or Firesticks to allow viewers to access the internet so that they can stream their OTT content on demand.

Both OTT and CTV offer marketing opportunities, but it’s critical to understand how they are related and how they are different, so you can tailor your efforts appropriately.

Why OTT and CTV Matter for Marketers

OTT content and CTVs are ubiquitous in daily life now, in much the same way radio and cable television has been in previous decades. Over 80% of homes in the US have a CTV for OTT viewing. Many viewers are even cord cutters, who have cancelled their cable television subscriptions, so the only television advertising they see is via OTT and CTV.

The good news for marketers is that OTT and CTV users are not averse to advertising. Approximately 43% of viewers would rather watch advertising than pay for a content delivery service, and many more are willing to pay a less expensive subscription fee in exchange for viewing advertising. Since these ads cannot be skipped like ads in DVR content can be, marketers can feel confident that their message is getting to the intended audience.

Advertising Placement on OTT and CTV

When and where consumers view advertising on OTT and CTV varies, depending on the streaming service and the connection interface. Some OTT providers, like Netflix, do not allow any advertising, but many other popular platforms do, including Hulu, Crunchyroll, and YouTube. For OTT content, advertising may be placed at the start of content, before the actual video begins, or it may be interspersed throughout a show, much like traditional commercials. For ad-supported OTT content, approximately 12 minutes of advertising per hour is common.

For CTVs, advertising is frequently placed alongside the apps and channels on their services, however, the framework depends on the interface. As with OTT, some CTVs don’t have advertising, but most have an integrated native advertising program.

Benefits of OTT and CTV Advertising

There is a long list of benefits that marketers can reap from OTT and CTV advertising. Here are some of those advantages:

  • Reach audiences where they are. The number of people using OTT and CTV is increasing and is expected to soon match or exceed traditional television viewing. Specifically, young demographics are cutting cords and relying on OTT content via CTVs entirely, which means there is an audience to reach with this kind of advertising that you can’t reach in other ways.
  • Use data to target the right audience. CTVs rely on IP addresses, which allow for easy data collection. This information allows marketers a high degree of personalized targeting, increasing advertising returns.
  • Ease concerns about brand safety. Brand safety is an issue that frequently concerns advertisers using internet platforms, but OTT content is typically high quality, with fewer inherent risks than marketers confront on web-based YouTube content. Additionally, accurate targeting further increases brand safety.
  • Get cost-effective advertising. CTV and OTT advertising costs far less than ad spots on broadcast television, without sacrificing reach. Because audience numbers are comparable—and in some age groups, larger—on CTV and OTT, this kind of advertising is a bargain.
  • Refine advertising efforts with measurement information. On CTV advertising in particular, measurement data provides extensive information about viewership and interactions with advertising. This makes it possible to continually refine your marketing efforts for better results.

With OTT advertising, it is also possible for brands to develop stories with sequential advertising interspersed throughout content. A series of ads that tell a story can be integrated into a single episode of a program, so that users see the entire campaign and get more details about the brand than they would in a single commercial.

Types of OTT and CTV Advertising

Video advertising is by far the most common form of OTT and CTV advertising. However, banner ads and sidebar ads are also used in some cases. Generally, video advertising is the most effective outlet on these platforms, but banner and sidebar ads can be integrated to increase visibility and viewer recognition.

Keep in mind that video advertising on these platforms can be made unskippable. This means you don’t have to worry about spending on video creation for advertising that audiences don’t see in their entirety.

Salem Surround can create comprehensive marketing campaigns for your business, leveraging our understanding of local and national markets as well as media consumption habits to help you connect with your target audience. We believe in ensuring that you have a presence everywhere your customers are, so they think of you first when they need your products or services. If you’re interested in OTT and CTV advertising, or if you want to learn more about all our digital marketing services, contact us today at (844) 277-5797.

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