Connected TV (CTV) and over-the-top (OTT) platforms are quickly becoming the go-to advertising channels for digital marketers looking to capture modern audiences.
As consumers continue to “cut the cord” and move away from traditional cable, business marketers and business owners have an exciting opportunity to leverage these new formats to reach their target demographics in ways that were previously unimaginable.
In this blog, we’ll explore how CTV and OTT advertising are redefining advertising reach and how businesses can overcome associated challenges to unlock their full potential.
What Are CTV and OTT Advertising?
CTV refers to any television set connected to the internet, allowing users to stream digital content through platforms such as:
- Netflix,
- Hulu,
- Amazon Prime,
- and more.
OTT refers to the delivery of film and TV content through the internet without requiring traditional cable or satellite subscriptions. OTT content can be consumed via CTV, mobile devices, or computers.
Benefits of CTV and OTT Advertising
Both CTV and OTT provide digital advertisers with the ability to serve video ads directly to these platforms, combining the broad visual appeal of television with the precision of digital targeting. Let’s explore the various benefits:
1. Targeting Capabilities
Unlike traditional cable advertising, where businesses are limited to targeting by geographic regions or broad demographic categories, CTV and OTT platforms allow advertisers to drill down much further. Through data-driven insights, marketers can target based on:
- user behaviors,
- viewing habits,
- Interests,
- device types,
- and even past purchase history.
This precision ensures that your ads are delivered to the right viewers at the right time, boosting overall engagement and reducing wasted ad spend. CTV and OTT are game-changers for businesses looking to maximize return on interest (ROI).
2. Measurable Performance
CTV and OTT platforms offer strong measurement capabilities, providing advertisers with detailed performance data.
- Impressions,
- click-through rates (CTR),
- and conversion rates
are readily available,allowing for more granular analysis of campaign effectiveness.
This transparency not only ensures you know where your ad dollars are going but also gives you the ability to adjust your campaigns in real time. For data-driven marketers, CTV and OTT offer remarkable insights into audience engagement.
3. Cost-Efficiency
While traditional TV advertising can come with a hefty price tag, CTV and OTT are a more cost-efficient way to advertise on television screens. With the ability to target specific audience segments, businesses can avoid the blanket ad distribution seen in cable TV and focus only on reaching those consumers most likely to convert.
Furthermore, the flexibility of CTV and OTT allows businesses of all sizes to participate, as campaigns can be customized to fit different budgets, delivering maximum impact without excessive costs.
4. Wide Audience Reach
The trend of cord-cutting continues to grow. In fact, according to recent data, over 78% of US households are now reachable via CTV, making it an essential advertising channel for marketers. The wide reach of these platforms spans all age groups, with younger demographics, in particular, opting for streaming services over traditional TV. Whether you’re targeting:
- Gen Z,
- millennials,
- or baby boomers,
CTV and OTT allow you to capture their attention as they consume content on their preferred devices.
Overcoming Challenges
While the benefits of CTV and OTT advertising are impressive, there are also challenges that marketers must address to maximize their potential.
1. Fragmentation
The sheer number of OTT platforms and CTV services can make it challenging to decide where to allocate your ad spend. Hulu, Roku, Amazon Prime, Netflix (ad-supported tier), and Peacock all offer different audience profiles, ad formats, and pricing structures. Breakup across these platforms can complicate media planning, and advertisers must carefully select the right combination to maximize their impact.
Solution: Working with a digital marketing agency such as New Path Digital can help simplify this process. By leveraging data and insights, you can choose the most suitable platforms for your target audience and ensure a unified strategy across all channels.
2. Viewability Concerns
As with any digital advertising format, ensuring that ads are actually seen by viewers is a top concern. Skipping ads, fast-forwarding, or multitasking while watching content can affect ad viewability, reducing the impact of your message.
Solution: Engaging, creative ad formats and a well-timed placement strategy can tackle this issue. Non-skippable ad formats or shorter ads can ensure higher completion rates and a more effective delivery of your message.
3. Measuring ROI Effectively
While CTV and OTT offer rich data insights, measuring true ROI can still be tricky, especially when dealing with cross-device user journeys. Understanding which approach leads to conversions is essential to optimizing your advertising strategy.
Solution: Having a comprehensive analytics framework that tracks user behavior across devices is essential. This helps you measure ad performance holistically and make data-driven adjustments to improve results. Collaborating with an expert in digital advertising will help ensure you’re utilizing the right tools to measure ROI effectively.
Best Practices for CTV and OTT Advertising
To fully capitalize on the benefits of CTV and OTT, here are some best practices every business should consider:
1. Audience Segmentation
Effective audience segmentation is at the core of successful CTV and OTT campaigns. Use available data to define specific audience segments based on factors such as:
- Demographics,
- Interests,
- Behavior,
- and device usage.
Customizing ads for these segments will result in higher engagement and relevance.
2. Creative Ad Formats
Gone are the days of the traditional 30-second ad spot. CTV and OTT platforms offer advertisers the flexibility to experiment with various creative ad formats. From interactive ads to clickable videos or even shoppable ads, think outside the box to capture viewer attention. Shorter, more catchy ads often perform better on OTT platforms, where viewers are accustomed to on-demand content.
3. Leverage Retargeting
One of the most powerful aspects of CTV and OTT is the ability to retarget viewers based on their previous interactions with your ads or website. Retargeting ensures that you stay top-of-mind for potential customers and nudges them toward conversion.
4. A/B Testing
Just like any digital marketing campaign, A/B testing should be an integral part of your CTV and OTT strategy. Test different:
- ad creatives,
- Durations,
- and placements
to determine what resonates best with your audience and fine-tune your campaigns accordingly.
CTV and OTT advertising are quickly redefining how marketers reach and engage audiences. With:
- precise targeting,
- measurable results,
- cost-efficient delivery,
- and wide reach,
they present a strong substitute to traditional TV advertising. However, to fully unlock their potential, businesses must navigate various challenges with a well-planned strategy. By following best practices, you can boost your advertising campaigns and make the most of this powerful medium.
If you’re ready to take your advertising beyond cable and leverage the power of CTV and OTT, New Path Digital can help.
With expertise in managing digital media platforms and creating data-driven campaigns, we can develop a tailored strategy to help you reach your business goals. Contact us today to get started!
Blog Last Updated on 1 week by New Path Digital
