Until recently, television dominated the world of advertising, routinely outperforming print and radio. Things started to change in the 2000s, as digital ad spending began to climb. However, it was only in 2017 that on digital ad spending finally surpassed TV ads.
While TV’s no longer king of the hill, it remains a potent force for advertisers. Yet too many brands remain stuck on old models of TV advertising, serving ads exclusively through traditional broadcast channels. In doing so, they’ve more or less ignored the rise of streaming TV and its advertising potential.
Things are starting to change with the adoption of OTT/CTV ad platforms. These platforms give brands a way to serve video ads before, during, or after streaming TV content.
With OTT/CTV ads, brands can combine the advantages of TV and digital ad formats. By pairing ads with users’ favorite TV programs, brands make a stronger impression on consumers. Meanwhile, they can take advantage of the precision targeting and data-rich analytics of digital campaigns.
How OTT-CTV Advertising Works
Before we explain how OTT/CTV ads work, here’s a brief primer on the terms “OTT” and “CTV” — both of which refer to options for streaming television.
OTT stands for “over the top,” and it refers to streaming formats that go “over the top” of traditional TV infrastructure. If you’re streaming a TV show on your smartphone, through your laptop, or using a peripheral device like an Amazon Fire TV Stick, you’re viewing OTT TV.
CTV, meanwhile, stands for “connected television.” A connected TV has been built to connect with the internet by an Ethernet connection, wireless capabilities, or both. As with OTT TV, it allows you to stream video content. But instead of needing a separate device, you can stream directly through your TV.
OTT/CTV advertising allows marketers to serve video ads through OTT peripherals and CTV sets. This way, your ads are seen before, during, or after TV shows and movies, just like traditional TV commercials. But at the same time, you’ll be running much more precisely targeted and data-driven campaigns.
Why Brands Are Moving to OTT-CTV
The core appeal of OTT/CTV advertising is the prestige and impact of TV advertising, combined with the targeting and insights of digital campaigns. So let’s unpack what that means for brands and why so many marketers are making the switch to OTT/CTV.
Consumer Impact
Television ads have a longstanding reputation for their impact on consumer preferences and behaviors. This can be partly attributed to the immersive nature of video. But the success of TV ads is also linked to the context in which these ads are viewed.
Think about the relationship that the average TV viewer has with their favorite shows. Then think about how that connection transfers to ads shown before, during, and after TV programs.
Traditional TV ads have been able to harness the power of these relationships for decades. And now, thanks to OTT/CTV, marketers can combine the advantages of digital ads with the emotional power of TV advertising.
Precision Targeting
As a digital ad format, OTT/CTV comes with powerful targeting capabilities. These capabilities are similar — and in many cases identical — to the targeting methods used for programmatic display ads.
- Addressable targeting can serve ads to viewers in a defined geographic area, whether that’s an entire city, a particular neighborhood, or a specific street address.
- Behavioral targeting serves ads to viewers based on behavioral data gleaned from other digital devices, including search, browsing, and location data.
- Demographic targeting allows you to serve ads to users based on a range of demographic variables, including age, educational attainment, income levels, and more.
Compare this to traditional TV advertising, in which the exact same ad is served to thousands or millions of viewers, based entirely on the program and timeslot.
Data-Driven Campaigns
OTT/CTV campaigns not only harness the precision targeting of digital ads but also take advantage of their tracking and monitoring capabilities. This allows brands to operate data-rich campaigns on TV ads, directly measuring the effects of ads on viewers.
This is made possible by logging unique data points — such as account information, IP address, or physical location — when someone views your ad. These data points will allow you to match that user with activity on other digital devices, including whether they visited your website after viewing your ad or visited one of your locations.
Once again, compare this to traditional TV ads, where you have no way of knowing who watched your ads or how they interacted with your brand afterward.