The New OTT Opportunity For Brands

Over-the-top (OTT) media platforms—which provide video, audio and other forms of content “over the top” of traditional cable and satellite providers—have become incredibly popular over the past decade. As a result, an industry once ruled by Netflix has expanded into dozens of mainstream apps that collectively reach hundreds of millions of people.

The world of OTT is evolving, and its latest evolution could be an excellent opportunity for brands looking to capitalize on new visibility. By the end of 2022, Netflix plans to launch a new tier of service available to subscribers—one subsidized by advertising.

The idea goes like this: Users will be required to view ads at predefined intervals in exchange for a lower monthly subscription rate. The new subscription tiers are, ostensibly, valuable for everyone involved. Users who don’t want ads still don’t have to deal with them. Users who don’t mind ads can nab a lower price for their subscription. OTT platforms get to generate more revenue. And, of course, advertisers have dynamic new ways to reach their target consumers.

The Benefits Of OTT Advertising

OTT advertising is highly beneficial for brands for a variety of reasons

Wide Reach

Chances are, almost everyone you know has multiple media streaming subscriptions. While not all these people will be exposed to advertisements, OTT ads have the potential to reach millions of people.

Specific Audience Targeting

Savvy marketers know better than to target broad audiences generically. This is one reason OTT ads are so powerful—you can use them to target highly specific audiences, reducing waste and maximizing your chances of reaching precisely whom you need.

For example, let’s say your product is an alcoholic seltzer drink. My guess is your target audience is a 25-to-45-year-old female. (Even though men do drink seltzers, the majority are purchased by women.) These are the sort of parameters you can put on your OTT ad buys. While you can’t specifically purchase certain shows or networks, the data sets (much like Google algorithms) allow you to target certain types of viewers.

OTT ads let you refine your targeting in many other ways as well, including specific geographic areas.

Young Audiences

If your brand primarily targets younger audiences, here’s some excellent news: Younger people disproportionately use streaming platforms. According to one source, “In the U.S., 70% of visitors to TV, movies, and streaming websites are between 18-44 years old.”

That doesn’t mean OTT ads are useless for older audiences, but rather targeting a young audience is easier and more convenient.

Advanced Analytics

How do you know your ads are working? Modern digital advertising platforms typically offer advanced analytics, allowing advertisers to figure out exactly how their ads are performing and how they can perform better in the future. Ads through streaming platforms and apps are no different.

Remember the example I gave above with the seltzer drinks? With the breakdown of the 25-to-45-year-old females, you’ll be able to see how many of the ads were delivered to 25-to-30-year-olds, 30-to-35-year-olds and 40-to-45-year-olds. If you have a program that’s multi-city based, you can see the breakdown of the cities, the top publishers (i.e., Lifetime, Tubi, Cooking Channel, etc.) and the frequency the ads were shown.

Lower Costs

Compared to traditional advertising forms, OTT ads tend to run cheaper. You don’t have to shell out an exorbitant amount of money to get your ad on a major television network. Instead, you can practice a much more cost-efficient strategy, which will likely net you a higher return on investment (ROI).

Budgeting Flexibility

Don’t want to invest too much in an untested strategy? Don’t worry. OTT advertising has extremely flexible budgeting, with CPMs averaging around $25 per 1,000 impressions versus upwards of $100 CPM with traditional broadcast TV or cable advertising. The barrier to entry in larger markets such as New York or Chicago is much lower as well since with OTT you buy the number of impressions versus the old-school cost per point and highest/lowest TV rating system of media buying. This allows for flexible spending and entering markets whether you are a burgeoning startup on a lean budget or an international mega-corporation.

Best Practices For OTT Advertisers

There are many ways to take advantage of OTT advertising. These are some of the best ways to utilize this platform fully:

Define your goals in advance.

Despite the many perks of OTT advertising, ads aren’t universally or automatically useful. You need to still have a solid direction for your campaign. Set your goals in advance and ensure all your ad decisions are in service to them.

Utilize audience targeting.

Take advantage of the sophisticated audience-targeting tools available to you. It’s likely better to show your ads to 500 highly relevant people than 10,000 people who won’t care about your products.

Use A/B testing.

It’s hard to tell exactly how your ads will play, as advertising is both an art and a science. Instead of guessing, experiment. Use A/B testing to compare your ads against each other and sort the wheat from the chaff.

Have you seen some streaming ads that have a QR code? Some larger brands, such as PepsiCo, have implemented these for users to enter sweepstakes. A good A/B test could be using a QR versus non-QR code, sending viewers instead to a special URL. Then you could look at your website analytics to see which is more effective. How many people used the QR code versus entering the special URL?

Analyze.

Data analytics platforms can quickly tell you how your ads are performing and give you inspiration for how to make them better. Keener analysis, with a focus on actionable insights, can lead you to push your results even higher.

OTT ads aren’t a new medium for advertisers, but they’re about to explode in popularity and availability. So the time is now to assess your strategic goals and prepare a campaign to take full advantage of this opportunity—because millions of new people will soon be viewing these ads.