TV has changed a lot in the past few years. With the introduction and growth of streaming services, we’ve gotten a whole new way to reach viewers with our ads.
According to a recent Nielsen survey, videos streamed through over-the-top (OTT) services – like Hulu, Netflix, HBO Max, and Disney Plus – account for 25% of the collective time consumers spend watching TV.
OTT advertising is advertising delivered directly to viewers through these streaming services.
The term “over-the-top” comes from the ability to bypass traditional TV providers that control media distribution. This gives advertisers the ability to reach their audiences directly.
Benefits of OTT Advertising
Precise targeting unlike regular TV – manage frequency, target competitors, focus on lapsed customers
Better ad relevance leading to more engagement
Leverage OTT ads as a full-funnel performance channel
Quantifiable data – you can accurately measure the effectiveness of OTT and optimize future campaigns
While OTT ads need to be formatted to work well across a range of screen sizes (because people stream over multiple devices, they need to be able to look good both on a large-screen TV and a smartphone), the fact that you can reach a smaller, but more targeted audience is the biggest selling point for advertisers.
OTT Viewership Stats
A 2020 survey showed that 70% of respondents aged 18 to 34 years old stated that they currently subscribed to a streaming service. The share of new HBO Max subscriptions almost doubled over one month. And it is projected that there will be over 188 million people in the U.S. watching content on Netflix by 2025.
Where there’s viewership, there’s also ad spend.
In 2020, the total ad spend for OTT was $990 million and it’s expected to reach $2.373 billion by 2025 – indicating that advertising on streaming services is growing at breakneck speeds.
Best Practices for OTT Ads
Because you’re able to take advantage of such detailed targeting options, you’ll want to make sure your ads are relevant to your audience if you’re going to advertise on OTT services.
Keep them short – Stick to 30 seconds or less for non-skippable ads
Pay attention to formatting – Make sure your video can be formatted for multiple devices
Make your ads relevant – The look, sound, and feel of your videos should reflect that of where your audience is
Bottom Line
As consumers continue to make the switch from traditional TV to streaming apps and ad-supported OTT services, OTT advertising is going to continue to take off. It will allow you to connect with your viewers in more personalized and meaningful ways and companies of all sizes can leverage the benefits.