Exploring Opportunities in CTV and OTT
As media consumption shifts towards streaming platforms, CTV (Connected TV) and OTT (Over-The-Top) advertising have become game-changers for brands. These digital advertising methods can sometimes offer more personalized, targeted, and data-driven campaigns than traditional linear TV. We explore how CTV and OTT are revolutionizing advertising, why brands are embracing these platforms, and how they stack up against linear TV.
What is CTV Advertising?
CTV advertising refers to ads delivered through internet-connected televisions, reaching viewers via smart TVs or devices like Roku and Amazon Fire Stick. What sets CTV apart is its precise targeting capabilities. Advertisers can reach specific demographics and households based on user behavior, leading to more relevant ads. This granular targeting is a significant advantage over the broader audience reach of linear TV.
For example, a fitness brand can target CTV users who’ve previously watched workout videos, ensuring their ads hit the right audience at the right time.
What is OTT Advertising?
OTT advertising refers to ads displayed on streaming services like Hulu, Peacock, and YouTube TV, bypassing traditional cable services. Unlike linear TV, which broadcasts to the masses, OTT offers both subscription-based and ad-supported models, allowing advertisers to reach cord-cutters and those who prefer on-demand content. Whether a user is watching on a mobile device or TV, OTT delivers targeted ads based on content preferences, viewership patterns, and more.
OTT’s flexibility also makes it a favorite for brands targeting younger, tech-savvy audiences and cord cutters who are increasingly difficult to reach through traditional TV.
OTT vs. Linear TV: A Comparative Analysis
OTT and CTV have some advantages over linear TV. Here’s a breakdown:
Targeting: Linear TV relies on demographic-based targeting, while OTT and CTV can use sophisticated data to reach specific audiences.
Measurement: OTT and CTV provide real-time data on viewership, engagement, and conversions, offering faster, and sometimes more actionable, performance insights than linear TV.
Cost-efficiency: While linear TV advertising can be expensive and less flexible, OTT and CTV provide more control over ad spend and audience segmentation.
This precision allows brands to efficiently manage budgets, targeting only those most likely to engage.
Why Brands Are Shifting to CTV and OTT Advertising
The advertising landscape has shifted alongside viewer habits, with streaming content consumption growing exponentially. As traditional TV viewership declines, brands are seizing the opportunity to connect with audiences through CTV and OTT platforms.
OTT and CTV ads can be interactive, allowing for dynamic and personalized messages, which drives higher engagement. For instance, shoppable ads allow users to make purchases directly from an ad, creating a seamless path from discovery to conversion.
Brands like Nike and Pepsi have leveraged OTT’s flexibility to build immersive ad experiences that engage consumers in ways traditional TV never could. By combining storytelling with advanced targeting, OTT ads become not just disruptive, but also valuable to the viewer.
Challenges of CTV and OTT Advertising
Despite the promise of CTV and OTT, challenges remain. Fragmentation is a key concern, with multiple platforms requiring different formats and ad placements. Advertisers must also navigate the potential for ad-blocking and content saturation on OTT platforms.
Creative flexibility can also be more limited on certain streaming services, making it important for brands to adapt their messaging to fit platform requirements while maintaining brand consistency.
Best Practices for CTV and OTT Advertising
To maximize the impact of CTV and OTT advertising, brands should adopt several key practices:
Engaging Content: Develop concise, visually engaging ads tailored to the platform’s audience.
Data-Driven Targeting: Use audience insights and data to tailor messaging and optimize ad spend.
Cross-Device Tracking: Monitor and optimize the customer journey across multiple devices, ensuring cohesive messaging from mobile to TV screens.
The Future of OTT and CTV Advertising
As streaming continues to dominate the media landscape, the future of OTT and CTV looks bright. Advances in technology, including artificial intelligence and mixed reality, promise even more dynamic, personalized ad experiences. Moreover, with platforms like Disney+ and Netflix exploring ad-supported models, the OTT advertising ecosystem will only continue to expand.
OTT and CTV ads are evolving to be more interactive and engaging, offering not just impressions but deep connections with consumers. The future lies in creating seamless, engaging, and data-rich ad experiences that blend entertainment with brand messaging.
The addition of CTV and OTT to linear TV and other reach channels is well underway, and brands must adapt to these new channels to stay relevant. With advanced targeting, measurable performance, and higher engagement, OTT and CTV advertising present an unparalleled opportunity for brands to reach modern audiences. Seizing this opportunity will be key to future advertising success in an increasingly digital world.
Questions We Get About CTV and OTT
Why should DTC brands explore advertising on CTV and OTT?
Brands have the ability to target specific audiences that are most interested in their products and can drive them down the funnel by retargeting those viewers on display. There are more creative opportunities, beyond standard video commercials, for deeper engagement and highlighting unique selling points. Opportunities include custom video units designed to drive engagement, clickable banners available on the CTV screen and high impact sponsorships to increase awareness and consideration.
However, some challenges do exist when it comes to creative restrictions based on either the brand itself or the creative message in the ad. Working with a partner that is aware of these guidelines can be advantageous.
Are you seeing more brands integrate CTV and OTT into their media mix? If so, why? If not, why not?
We are definitely seeing more brands increase investment in CTV as well as adding it to their media mix altogether. Historically, we have seen brands that cater to a younger demographic (ages 18-34) increase their investment in CTV, however, now we are seeing more brands across the board increasing investment as the viewership numbers are steadily increasing across each demographic group.
New ad-supported streaming video providers such as Netflix and Disney+ are also driving increased interest. The ability to measure incremental reach, lift and performance within attribution platforms like iSpot, help quantify the success of CTV and provide unified measurement for CTV and linear television.
What brands would benefit most from CTV and OTT advertising?
Through CTV and OTT advertising, any brand has the opportunity to create an emotional connection between their brand and their target audience through impactful story-telling opportunities beyond static units. This can be particularly important for DTC brands that are still growing and establishing themselves in the marketplace.
Market data tells us that consumers crave connections with a brand throughout their decision-making journey. This channel will also offer the opportunity for brands to future proof their business by interacting with consumers in a mixed reality/ virtual world (i.e. the metaverse, A.I.). The nature of media consumption is changing and CTV and OTT are great channels for leveraging tech innovation to reach consumers.
