What Exactly is OTT Advertising and How Does it Work?

Written by Zac Johnson
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What if taking things “over the top” was the best marketing move your company could make?

Over the top advertising is a powerful new strategy to capture customer attention and build your brand. Unfortunately, most businesses don’t know how what OTT advertising is and how it can work for them.

Keep reading to discover how this new marketing technique can boost your own company’s bottom line!

What Is OTT Advertising?

We’ve put together a guide to help you understand how over the top advertising can work for your company. First, though, it’s important to define what this form of advertising actually is.

The term “over the top” doesn’t refer to some kind of outlandish marketing practices. Instead, it refers to advertisements designed for digital devices.

The rise of over the top advertising shows us how much things are changing in the modern consumer landscape. Simply put, traditional commercials matter less and less as more consumers find digital ways to watch their favorite shows, games, and movies.

Common OTT Devices

What are the devices that someone will see OTT advertisements on? The full list of devices seems to grow every year!

Many rely on video game consoles such as the Playstation 4 and the Xbox One. Soon, the next generation of consoles (including the Playstation 5 and the Xbox One X) will be the main way plenty of people view such advertisements.

Special HDMI sticks are also a popular way to stream digital content. This includes things like Amazon’s Fire TV Stick or a Chromecast plug-in.

Some consumers prefer dedicated digital boxes to facilitate digital streaming. This includes things like Apple TV and Amazon Fire TV boxes.

Finally, some consumers stream via apps within their Blu-Ray players. And a growing number of smart TVs have streaming apps built into then, meaning customers need nothing else to begin watching.

Where Does This Advertising Play?

The term “streaming content” comes up a lot in relation to OTT advertisements. But where, exactly, will consumers be watching these advertisements?

While Netflix was the early torchbearer for streaming content, customers are highly unlikely to see any OTT ads on that platform. That’s because Netflix has made “commercial-free” a major part of their brand.

However, OTT ads appear on Netflix’s rival Hulu. Unless customers pay more for the commercial-free option, their Hulu streaming will include occasional ads.

Additionally, there are a number of free online streaming apps vying for customer attention, including Tubi, Crackle, and Pluto TV. Those services are free because they rely heavily on advertisements.

Commercials For the Next Generation

Why have OTT advertisements become such a major part of consumers’ daily lives? To understand this, you must better understand the shifting demographics of your customers.

Demographics such as millennials have been leading the way in “cord-cutting” for many years. This means they are turning their back on traditional cable subscriptions for multiple reasons.

The first reason is financial. As cable subscription costs continue to rise, trading that monthly bill in to only pay $10 (or less) per month for a streaming service starts to look pretty good.

On top of that, millennials also prefer the “on demand” nature of streaming entertainment. Why cluster around the TV at designated times when you can watch your favorite content whenever and wherever you are?

Customers love OTT devices and streaming platforms. And this gives you the chance to create your own programmatic TV ads.

The Power of Video Advertising Networks

So, how does a business get started with OTT advertising? One of the easiest ways is to work with video advertising networks.

As the name implies, these networks help manage the flow of ads broadcast to various streaming services. And it’s something you can take advantage of in a couple of different ways.

We’ve already covered the first method: working with these external companies to show your own advertisements elsewhere. The second method is more ambitious: should your company create its own “channel” of content for an online streaming service, you can work with advertising networks to broadcast commercials on your own channel!

Sponsored Ads

A more obvious method of broadcasting your ads is to create sponsored ads. Simply put, you pay to advertise on a very specific platform or channel.

This offers some advantages that mirror traditional advertisements. For example, you can advertise on channels that primarily cater to the same demographic you hope to cater to.

There are also special advantages to OTT advertisement, though. A sponsored message can take almost any form, from traditional video ads to app launch screens to banners and backgrounds.

Such versatility allows you to pick the advertisements that are best for your company and its products.

The Benefits of OTT Advertising

Maybe you’re still not sold on the notion of OTT advertisements. You probably have a pretty simple question: just what are the main benefits of OTT advertising?

One obvious benefit is the potential reach of your advertisements. By the year 2022, nearly 200 million people will view OTT ads each month!

Another benefit is one we have already touched on: the ability to target customers by demographic. You can also target by geographic areas in a way that you cannot with traditional advertising.

The last two advantages are connected. First, it’s easy to conduct and analyze analytics each month to determine how many customers you have reached. Because of those analytics, you can make OTT advertising budget-friendly, especially when you target specific customer niches.

Mainstream vs Niche

It’s tempting to think “bigger is better” and try to reach as many customers as possible. But focusing on specific customer niches can actually create buzz and conversions, all without breaking the bank on your marketing budget.

Take the time to really study your analytics each month with your OTT advertising. You’ll eventually be able to find a “sweet spot” regarding who to target and where, making your marketing more efficient, streamlined, and budget-friendly.

Your Next Marketing Move

Now you know how OTT advertising can make your company some serious cash. But do you know how else to turn real profits in the digital age?

To learn more about thow to grow your online business or offline brand through content creation and affiliate marketing, check out our resources section or contact us today.

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