OTT was once seen as a novelty- a fun new technology used to round out a traditional marketing campaign.
Now, with streaming media gaining ground over cable and the Internet of Things (IoT) taking off, OTT marketing is positioning itself as a core part of a modern marketing strategy.
What is OTT Marketing?
The exact definition of OTT marketing is both simple and complicated.
On the surface it seems easy: marketing via internet connected platforms and devices as opposed to print and cable.
There is disagreement among marketers as to what exactly counts, though.
Some questions whether straightforward video ads on “cable replacement” platforms like Netflix count as OTT marketing since they don’t take full advantage of the medium’s potential for creative engagement.
Despite the controversy, OTT is an enticing target for marketing.
More and more often it’s just where the audience is these days. There are 164 OTT subscriptions per 100 households in the US alone, and Canada isn’t far behind with 132.
Those numbers are rising fast. US-based OTT nearly doubled between 2016-2018.
On a global level OTT services as a whole is projected to double again by 2024, with the market growing from $81.6 billion to $156.9 billion.
Why is OTT Marketing So Effective?
Advertisers aren’t just choosing OTT marketing because it’s there, though.
It has clear benefits over other formats.
A digital platform allows for highly focused marketing strategies. Instead of trying to appeal to a broad group of people who watch a specific show, users have more control.
They can target viewers in their ideal demographic who have recently shown interest in related products.
Because ads are shown to those who are likely to be interested in them, OTT marketing has a higher ROI than cable TV ads.
Native video ads, for example, have a 40% higher average CTR and more complete views than static website ads.
It’s also worth noting that OTT users tend to be “younger, more affluent” families than those who don’t use streaming services as their primary media source.
A growing percentage of that population don’t even watch traditional cable or satellite, so there’s limited options to reach this audience.
- Innovation: OTT opens the door to a new breed of advertising styles. There are traditional video ads, of course, but also newer concepts like playable “game” ads, shoppable ads, and rewarded videos. Marketers can conduct AB testing by offering viewers the choice of two ads. Non-video approaches like app overlays and push notifications can be combined with video to create a fresh, interesting strategy.
- Multi-platform approach: The ability to reach the same customer across multiple platforms using IP targeting is one of OTT marketing’s strongest draws. From a customer standpoint it leads to a customized advertising experience, with less likelihood that they’ll encounter annoying or irrelevant ads. From an enterprise the multi-platform approach increases conversion rates by putting ads where consumers will be, when they’re receptive to seeing them.
- Data Transparency: The nature of OTT means that precise data is generated on how a particular campaign is performing. That can be broken down by market and demographic, too. Advertisers have access to the information they need to adjust their campaigns, like:
- Did an ad result in a site visit? Was there a purchase?
- Are consumers interacting with the ad or just letting the timer run out?
- How many people watch the entire video?
What does the future look like?
Analysts are predicting a robust future for this expanding industry.
OTT marketing opportunities are growing all the time, and not just on computers and smartphones.
IoT keeps increasing the number and type of devices available for marketing, which has the follow-on effect of creating a richer environment with a constellation of re-engagement points.
Marketers are responding to that opportunity.
Spending on OTT marketing is over $3 billion now, with the projection of reaching $5 billion by the end of 2020. Nearly half of marketers use interactive options like shoppable ads.
They’re seeing results, too. 99% of marketers who currently use OTT marketing say they plan to keep doing so.
At the same time, traditional marketing is on the decline, with the field seeming more restricted and complex all the time.
Pay TV customers are dwindling as “cord cutting” becomes the new norm. Experts predict OTT media will overtake cable and pay TV within 5 years.
It’s clear that OTT marketing can’t be ignored any longer.
If companies want to reach their most valuable customers, they’re going to need to meet them where they are: online.
Are you curious how OTT marketing could make your advertising strategy hyperfocused and efficient? Let us show you how our technology can put your ads in front of the right audience!