OTT is short for "over-the-top." It refers to a content delivery system that exclusively uses the Internet, rather than another medium like cable or satellite. OTT's global market is vast, reaching $121.61 billion in 2019, with some experts projecting it to increase almost tenfold to over $1 trillion by 2027.
It's no surprise that many advertisers invest heavily in OTT marketing as a key component of their strategy moving forward. Perhaps your company is among that number. On the other hand, you may hesitate to allocate resources to this relatively new marketing channel. With that in mind, here are five key things you should know about OTT that will inform your decisions around this advertising medium.
1.OTT Reaches Diverse Audiences
Since it is entirely Internet-based, OTT content reaches a wide range of demographics. For example, OTT ads can reach the "cord cutter" and "cord never" demographics — in other words, households that are either abandoning cable TV or never subscribed to it in the first place. Interestingly, a study by Roku projects that some 60 million American households will watch content on their TV exclusively through streaming services by the year 2025.
When it comes to this demographic and many others, OTT can go places other mediums simply cannot.
2. OTT Promotes Immediate Action
One of the most significant advantages that OTT advertising provides is an impetus for the consumer to take immediate action. Well-designed OTT ads include a clear CTA for the viewer and often a button to make the desired action that much easier to implement.
For example, pre-roll video ads on YouTube (one of the biggest OTT platforms) are often clickable and quickly redirect interested viewers to a specific landing page. This functionality removes a lot of the friction that's traditionally found in the transition between prospect and converted customer.
3. OTT is an Affordable Medium
Compared to the cost associated with traditional TV commercials, OTT advertising is highly cost-effective. This is especially true since OTT ads tend to yield a higher performance in terms of viewer engagement and advanced targeting capabilities.
The cost per thousand impressions (CPM) for OTT will vary according to the platform. For in-stream ads on connected TV, your CPM will likely be at least $20. Of course, that's much less expensive than the CPM of $35 that comes with a television commercial in Los Angeles or another big market.
4. OTT Can Integrate with Your Marketing Plan
It is relatively simple to incorporate OTT advertising into your overall marketing plan. One of the key benefits of doing so is creating multiple touchpoints for your target consumers. Moreover, delivering a consistent message across several channels (such as OTT, your official website, cable TV, radio, etc.) will enhance your brand perception and contribute to top-of-mind awareness (TOMA) within your consumer base.
Of course, to successfully integrate OTT into your marketing strategy, you need to have a cohesive vision for your ad creative. In some cases, the ad creative for one marketing channel can be easily transferred to an OTT platform. For instance, you could distribute a traditional TV ad over OTT channels for maximum impact. Research has shown that launching streaming and conventional TV ads in tandem can increase ad recall by 34%.
5. OTT Marketing is Effective
OTT marketing is one of the most useful resources you have at your disposal in the final analysis. It combines a broad reach with unsurpassed targeting capabilities. It also allows for exceptional attribution tracking. Moreover, its "clickability" sets it apart from most other traditional advertising forms, such as cable TV, broadcast TV, and radio.
OTT's penetration is continuing to grow on a global scale. For instance, research as of January 2020 found 164 OTT subscriptions per 100 households in the United States, 132 subscriptions per 100 households in Canada, and 68 subscriptions per 100 households in China. No doubt, those numbers have increased even more since then.
Incorporate OTT Advertising into Your Marketing Mix Today
As the above information demonstrates, OTT advertising offers several benefits to forward-looking companies. For instance:
- It reaches a highly diverse audience
- It promotes quick and virtually frictionless action on the consumer's part
- It is highly cost-effective
- It can easily integrate with your current marketing plan
- It is one of the most effective marketing channels available for use
You should seriously consider incorporating OTT into your marketing mix today. The benefits of doing so will likely outweigh any expense or effort you put forth. Of course, if you are unsure of how to begin this process or feel like you need help from marketing professionals, enlisting an experienced media partner may be the best solution. Regardless, OTT advertising may be the perfect channel to drive your sales, increase your consumer base, and help your business grow.
