Over-the-top (OTT) advertising has transformed how brands connect with consumers. Thanks to OTT ads and video streaming, digital marketers can engage audiences during one of the most critical stages of the buyer’s journey: discovery.
In recent years, famous platforms like Netflix, Hulu, and Disney+ have seen a significant surge in popularity. Businesses big and small now wield OTT video advertising as a potent tool, enabling them to deliver tailored messages directly to targeted viewers.
But what is OTT in marketing, specifically? How does OTT advertising work? Which platforms are worth your time?
This in-depth guide has all the answers and explores:
Ready to uncover the transformative impact of OTT ads and unlock new opportunities for your brand to engage with consumers? Read on.
OTT advertising is a form of digital marketing where ads are delivered to viewers via the internet through streaming video services like Netflix, Hulu, Amazon Prime Video, Disney+, and others.
Unlike traditional TV ads, OTT advertising allows brands like yours to target highly-relevant audiences. With AI-powered data analytics and targeting capabilities, advertisers can reach viewers based on various criteria, including location, demographics, interests, and behaviors.
In short, OTT advertising offers a modern, targeted, and realizable way for brands to reach consumers—making it an effective marketing tool.
Over-the-top advertising offers some major benefits. For starters, OTT ads come in various formats, including pre-roll (before content), mid-roll (during content), and post-roll (after content).
They’re also interactive and personalized, which enhances engagement. Another significant advantage of OTT advertising is its cross-device compatibility. Unlike conventional TV ads, OTT video ads are shown on many devices, like smart TVs, phones, tablets, and computers—ensuring a broader audience will see them.
By delivering relevant ads that align with viewer interests and behaviors, OTT advertising enhances the overall viewer experience.
On OTT platforms, ongoing developments in ad tech—such as AI-driven targeting, dynamic ad insertion (DAI), and programmatic buying—improve ad delivery and productivity.
Here are four more significant benefits of OTT advertising:
There are different types of over-the-top advertising methods that you can use to reach audiences on OTT platforms. Let’s take a look at some examples of OTT advertising methods below.
So, what does “OTT” stand for in advertising? It still means “over-the-top,” but now you know the different types of OTT video advertising methods. These OTT ads allow advertisers to customize their messaging to fit their target audience's viewing patterns and choices on streaming platforms, increasing the impact of ads and audience engagement.
There are many OTT advertising platforms that brands can leverage to reach their target audiences effectively. Here are some of the best OTT advertising platforms:
Google Ads is the central platform for managing YouTube advertising campaigns, providing powerful tools to connect with diverse audiences effectively.
The above examples are among the best platforms for OTT advertising. They vary in audience demographics, content offerings, and ad formats, providing advertisers with diverse options to tailor an OTT advertising strategy based on the target audience and campaign objectives.
OTT advertising companies and platforms measure the success of ad campaigns through various methods and analytics tools, such as:
Over-the-top advertising has become increasingly prevalent as OTT platforms have grown in popularity. Here are some of the OTT advertising best practices for well-known OTT platforms.
Companies can use data-driven insights to target specific demographics or behavioral segments. For example, Hulu's targeted advertising options allow brands to reach audiences based on demographics, interests, and viewing habits, ensuring relevant and impactful ads.
Interactive elements like clickable overlays or mini-games also increase engagement. For instance, Netflix's interactive content, such as "Bandersnatch," allows viewers to make decisions that affect the storyline, creating more engagement with branded content. You can also use QR codes, call-to-action buttons, or gamification for a more immersive ad experience.
Hyper-personalization based on viewer preferences or viewing history allows you to create different variants of your OTT video ad to cater to specific demographics. For example, Amazon Prime Video uses viewer data to recommend content and serves ads corresponding to the viewer’s interests, enhancing relevance and effectiveness. You can also implement dynamic ad insertion (DAI) to serve the most relevant ad to each viewer.
A major part of ad personalization is ensuring that OTT advertising placements fit naturally within the OTT viewing experience without disrupting the content flow. A great example is YouTube TV, which integrates ads into its platform to mimic the traditional ad experience, making them less intrusive and more acceptable to viewers.
Use consistent branding and messaging across OTT platforms to enhance brand recognition, awareness, and recall. For example, Disney does an excellent job of this on its OTT platforms (Disney+ and Hulu), reinforcing its brand identity and ensuring a unified viewer experience.
Set clear and attainable key performance indicators (KPIs) to monitor the success of your OTT advertising strategy. Some noteworthy metrics include view-through rates, engagement, and conversions. Leverage powerful analytics to optimize your OTT ad insertion campaigns in real time.
For instance, Roku offers detailed analytics that help advertisers track viewer engagement and adjust ad strategies accordingly, improving campaign effectiveness.
Experiment with new ad formats (e.g., 360-degree videos, AR experiences) to stand out and capture viewer attention. For example, during live sports streaming on OTT platforms, ESPN's AR enhances viewer interaction and provides a memorable advertising experience.
Control the frequency of your OTT ads using frequency capping to avoid viewer fatigue and negative perceptions. For example, Spotify allows users to choose their ad experience by offering a premium ad-free subscription, minimizing interruptions while listening to music or podcasts.
You can also optimize ad delivery times to reach targeted viewers when they are most likely to be receptive. The goal is to balance the frequency of an OTT video ad with the right timing for maximum impact.
Deliver ads to your targeted audiences that are related to the content. It’s unlikely that an ad about beauty products will appeal to many viewers watching a nature survival show. For example, HBO Max inserts OTT ads relevant to the shows' concepts, ensuring that the displayed ads truly resonate with the audience.
Follow privacy laws and maintain clear policies on how viewer data is used. For instance, Apple TV+ emphasizes user privacy by limiting ad tracking and giving users control over their data, fostering viewer trust.
Still wondering whether OTT ads are an effective form of marketing? Let’s look at some of the latest OTT advertising statistics for an answer.
These OTT advertising statistics highlight the increasing effectiveness of over-the-top ads in reaching and engaging with audiences due to advanced targeting capabilities, high viewer engagement rates, and growing consumer adoption of streaming services.
Wondering how to buy OTT advertising? What about the expenses, monetization strategies, and potential outcomes? In this section of our OTT advertising guide, we answer these questions in detail.
OTT advertising costs vary according to factors like OTT platforms, target audience, ad format, pricing model, and ad space competition. Generally speaking, OTT ads cost less than traditional TV advertising, with Cost Per Mile (CPM) or cost per thousand impressions ranging from $5 to $30.
For example, YouTube has an average CPM of $20–$25, while connected television (CTV) ads sit in the $35–$65 CPM region. Here’s a breakdown of other types of OTT advertising costs and pricing models:
To buy OTT ads and ensure maximum impact and ROI, you need to adopt a strategic approach. Here is a step-by-step guide detailing the process:
1. Identify Your Target Audience
Determine the demographics, interests, and viewing habits of your desired audience.
2. Choose the Right Platform
Select popular OTT platforms like Hulu, Roku, Amazon Prime Video, or others that best reach your target audience.
3. Set Your Budget
Decide on how much you’re willing to spend on the campaign, including CPM, CPV, or other pricing models.
4. Select OTT Ad Formats
Choose from various OTT ad formats, such as pre-roll, mid-roll, post-roll, or display ads, depending on your campaign goals.
5. Create Compelling Ad Content
Develop high-quality, engaging OTT ads tailored to your target audience and platform specifications.
6. Use a DSP or Direct Buy
Utilize a Demand-Side Platform (DSP) for programmatic ad buying or contact the OTT platform directly to purchase ad space.
7. Target Your Ads
Use the platform’s targeting options to reach specific audience segments based on demographics, location, behavior, and interests.
8. Launch the Campaign
Schedule your OTT ads to run at optimal times and on relevant content to maximize exposure and engagement.
9. Monitor and Adjust
Track performance metrics and adjust your campaign as needed to improve results and ROI.
10. Analyze Results
Review the relevant analytics during and after your campaign to understand its effectiveness and gather insights for real-time changes or future efforts.
There are also different types of OTT advertising revenue or monetization models that allow businesses to generate revenue on an OTT platform, such as AVOD, SVOD, and TVOD.
OTT platforms generate revenue by selling ad inventory to advertisers. This income is typically based on the number of impressions, clicks, or other engagement metrics delivered.
Some OTT platforms offer ad-free subscription models, generating revenue directly from subscribers who pay for access to content without ads. OTT platforms may share advertising revenue with content creators or providers based on agreements, where content owners generate revenue from ads displayed alongside their content.
Considering OTT advertising services or platforms but not sure where to start or if you’ll succeed? Below are three proven ways inoRain can help.
inoRain helps you connect with your specified audience by targeting content that is contextually compatible with your campaign. This way, your ads are much more relevant and engaging—leading to higher viewer retention, better conversion rates, and ultimately, an increased ROI.
With our 10+ monetization models, you can select the one that best fits your business goals. Whether you prefer AVOD, SVOD with ads, or hybrid models, inoRain provides the flexibility you need to adapt your strategy and maximize revenue while catering to your audience’s preferences.
Do you want to establish your own brand-specific OTT platform to build brand awareness, bolster thought leadership, and increase your revenue? If so, our all-in-one customized white-label OTT solution is for you.
Designed to meet the demands of modern digital audiences, our OTT white-label solution offers comprehensive content management and robust streaming tools. This ensures effective content delivery across multiple platforms and targeted audiences for maximum effectiveness.
Want to know more about how inoRain’s OTT solutions can drive your success? Request a demo or book a free consultation today.
No OTT ad guide is complete without looking at some of the latest OTT advertising trends. Let’s see what market shifts are currently taking place.
Thanks to these OTT advertising trends, brands can reach the right audiences with less effort and more cost-effective strategies. Unlike traditional CTV ads, OTT ads are also more relevant, driving higher engagement and increased ROI.
Connected TV (CTV) advertising targets viewers through internet-connected devices like smart TVs and streaming boxes. Over-the-top (OTT) advertising refers to ads delivered via streaming services over the internet, bypassing traditional cable or satellite TV. While CTV focuses on the device, OTT emphasizes the content delivery method.
Netflix is categorized as an OTT platform because it delivers content directly to viewers online without requiring a traditional cable or satellite TV subscription.
No, AVOD and CTV are not the same. AVOD is a monetization model where users have free access to content, but the content is interspersed with ads. In contrast, CTV is the hardware (connected TVs, such as smart TVs like LG, set-top boxes like Roku, and gaming consoles like PlayStation) that allows users to access streaming services, including AVOD platforms, on their TVs.
OTT platforms use subscriber growth rates to assess advertising campaigns' effectiveness, ROI, and overall impact on business objectives. By leveraging this data, OTT platforms can optimize advertising strategies, allocate resources efficiently, and drive sustainable growth in a competitive digital streaming landscape.
OTT or over-the-top advertising is a big threat to traditional ads. It’s more affordable, more flexible, and more targeted—allowing businesses to reach a wider, higher-quality audience. With various content-based OTT ad types, real-time data insights, and flexible monetization models, tech-savvy brands are leveraging OTT advertising platforms to drive business growth and stay competitive.
The question is, are you? Contact inoRain today to stay ahead with best-in-class end-to-end OTT solutions.
Co-founder / CTO
Armen Hakobyan is the Co-founder and CTO of inoRain. With extensive experience in digital streaming technology, he contributes insightful articles on AVOD, SVOD, and OTT strategies. Armen also consults with clients to increase their income. His expertise helps shape inoRain's end-to-end solutions for diverse digital content providers.
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