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12 Ways OTT Services Can Benefit Your Marketing Strategy

12 Ways OTT Services Can Benefit Your Marketing Strategy

Who likes advertisements that interrupt their favorite television show or movie? Nobody likes this UNLESS it’s for a product or service that interests you.

For decades, watching television meant accepting the necessary evil of ads interrupting your favorite programming. When an ad appeared, that was a signal for viewers to surf other channels, refill a drink, or throw in a load of laundry.

This changed with subscription-based OTT providers like Netflix. As OTT providers grow their programming choices, they’ve also added paid advertising to their revenue models. This allows OTT services to offer different pricing to viewers and opens up huge opportunities for advertisers

What Are OTT Services?

Over-the-top (OTT) is a phrase that describes services that provide programming streamed over the Internet. The name came from the idea that these services hop “over-the-top” of broadcasting, cable, or satellite television.

If you are familiar with Netflix, Hulu, and Amazon Prime, then you’re familiar with OTT media providers. OTT revenue is estimated to reach $158.84 billion by 2024. That’s up from $67.8 billion in revenue in 2018. 

OTT providers have changed the way audiences watch television and movies. The most notable changes that OTT brought with it are audiences deciding when and where they watch video content. As a result, audience experience and expectations have shifted. Advertisers are adapting to these changes.

What Is OTT Advertising?

Have you ever been watching your favorite Hulu show on your Internet-connected television and saw an ad for a product that compelled you to pick up your smartphone to search for and buy the product? Maybe you don’t need to search for the product, but it pops up as soon as you open your browser. 

This behavior is an advertiser’s dream, so it should be no surprise that OTT ad spend is predicted to reach $9 billion this year and over $14 billion by 20203.

From this scenario, you can guess that OTT advertising is more like digital advertising than traditional television advertising. OTT services are cross-platform so allow you to tailor your marketing to reach audiences in various ways. You can reach your target on many digital devices: laptops, tablets, smartphones, smart TVs, video game consoles, and streaming boxes.

OTT ads allow marketers to connect a consumer viewing a commercial to a website where the consumer can respond to a call-to-action. Let’s drill down into the 12 ways that OTT services can benefit your marketing strategy. 

1. Bigger Audience Reach

Until the arrival of OTT services, commercials were viewed on a simple television set. Today, viewers don’t have to be sitting in their living room in front of a television to see a video. Viewers can be in front of a video screen anytime, anywhere.

Imagine a viewer that watches YouTube on their smartphone while riding the subway to work in the morning. This same viewer is in front of a computer screen during the workday checking breaking news on a broadcast channel. And in the evening this viewer binge watches their favorite sitcom from a decade ago on Hulu. Then finishes the night with a video game on a gaming console.

These device interactions are all opportunities for OTT advertising. Advertisers are no longer limited to traditional television broadcasting. If an advertiser chooses to use traditional broadcast advertising, their message won’t reach beyond the living rooms where most TVs live!

OTT services only need an Internet-connected device, so advertisers can reach audiences anywhere a viewer has a smartphone, tablet, desktop, laptop, streaming box, or video game console.

Is bigger always better? In the case of OTT services, reaching a bigger audience doesn’t compromise targeted marketing strategies of advertisers.

2. Better Audience Targeting

All these devices that are constant companions to potential buyers have given advertisers and marketing departments the opportunity to better know their customers. It’s one thing to reach a bigger audience, but even better to reach a bigger target audience.

As we will see later in this article, multiple devices used throughout the day allow OTT services to collect a lot of data about their viewers. This data can inform advertisers about which viewers are motivated to buy your product or service.

For years, television advertising campaigns were measured by the traditional rating method. Neilsen’s Ratings has been the holy grail of marketing campaigns. This meant the commercial reached a certain percentage of a gender or age group in the population.

With OTT services, marketing campaigns are being measured by the actual or projected number of impressions on a viewer. The exact definition of an “impression” in OTT is still evolving but a general rule of thumb is about 30 minutes of viewing content equals 6 impressions.

One of the latest trends in advertising has been segmenting customers to better allocate marketing resources. There are two terms that OTT advertisers should be familiar with: micro-targeting and geo-targeting.

3. Better Audience Segmenting

Micro and geo-targeting are segmenting methods that describe how to precisely target your potential buyers. OTT providers collect precise demographic, geographic, psychographic, and lifestyle information from their consumers. This information shared with advertisers makes it easier to develop a successful marketing strategy targeting segmented audiences.

Advertisers choose the precise demographic, geographic, psychographic, and lifestyle segment they want to target. Within these segments, advertisers can focus on different topics for different locations or lifestyles.

Think about how much more efficient and effective your advertising campaigns could be with these powerful targeting resources.

4. More Powerful Analytics

We’ve already touched on the power of data to drive precise ad placement. Data is also critical in measuring the success of marketing campaigns.

With traditional Neilsen’s ratings, the results of the campaign are based on samples of an audience. This is very different from measuring the actual engagement of individuals. Online streaming services offer great data analytics about the viewers who saw your advertisement and how these viewers respond.

Also, the data analytics for your ad – geolocation, device type, channel, etc. – can be viewed in real-time by you, the advertiser. 

5. Better for Budgeting

Making decisions about how to divide marketing resources has been a struggle for all size businesses. For a business on a tight budget, traditional television advertising is a big risk. What if the business spends money on creating a TV commercial, places the ad based on anecdotal information, and sales don’t budge?

A few years ago, this blunder would have been chalked-up to wasted time and sunk costs. Today, a small business can create and place a commercial using data provided by an OTT service. In real-time, the business will know how effective the ad is. If it’s not effective, the business has a better chance of knowing why based on OTT services response measurements and can adjust its marketing strategy.

In addition, businesses that use OTT advertising only pay for actual ad-views, not ad-placement. Gone are the days of making big marketing investments based on vague market research that estimated the number of viewers based on Nielsen ratings.

Knowing your target customer’s response to your ads in real-time reduces wasted advertising dollars. It helps you make fact-based decisions to maximize your digital marketing budget. 

How great would it be to get exactly what you pay for with your marketing budget?

6. Younger Audience

If your target market skews younger, then OTT advertising is an absolute must. The number of boomers who use digital devices that deliver streaming content is smaller than any other demographic.

More than half of Americans over the age of 18 use one or more OTT service. It’s fair to say that OTT has become mainstream when even a third of boomers are OTT using online streaming services.

7. Making the Switch to OTT Is Easy

In the hierarchy of technology adoption, early adopters are at the top and are laggards at the bottom. Laggards who questioned the staying power of OTT should note that 97 million homes use a TV connected to the Internet compared to 89 million homes using traditional TV.   

If you’re considering making the switch, it’s important to create professional-quality video content. Remember that buyers will view your ad on different devices – smartphones, tablets, laptops, and televisions – so be sure to video that is appealing on all those screens.

8. No Skipping!  

Earlier in this article, we noted that online streaming services often offer viewers access to programs through a subscription, paid advertisement, or a combination of these.

Except for the subscription model, viewers must watch your streaming commercial before they can access their desired streaming program. The length of OTT advertisements ranges from 15 seconds to 60 seconds.

9. More Engaged Audience

Did you ever hear that expression that goes something like if you throw enough spaghetti at a wall something will stick? What a waste of spaghetti! What a mess of uncertainty! There was a lot of spaghetti throwing in old-school advertising. Businesses blasted a commercial and hoped for the best.

Traditional television advertising tries to reach the largest number of viewers possible. But what if your ad reaches a whole bunch of viewers but only a handful of these viewers felt engaged with the ad?

OTT advertising allows a business to reach more people that will be more engaged in the ad. If you want to significantly increase the likelihood of engaging a viewer, you should create individualized ad content.

10. Flexible Placement Methods

There are two ways to place your advertisement with an OTT service: Client-side Ad Insertion (CSAI) and Server-side Ad Insertion (SSAI). What’s the difference?

CSAI is the way ads are delivered on a desktop, tablet, or smartphone connected to the Internet. SSAI, a.k.a. ad stitching, is the way ads are delivered to viewers on TVs connected to the Internet.

Technically, the difference is that with CSAI the content publisher is serving video to the viewer on a device that makes a separate call to an ad server that grabs and delivers the appropriate ad to the viewer. With SSAI, the ad is already embedded in the content so there is no call to a server.

With OTT services you not set to one commercial strategy. If you find your strategy is ineffective, then it’s easy to replace it with a new creative insertion with a minor loss.

11. More Devices Means More Impressions

Streaming content available through multiple devices around the clock increases the number of people using streaming services. By 2022, experts estimate there will be about 200 million monthly OTT users in the United States. Research shows that there are currently 820 million video devices that use online streaming services.

12. Great for Direct Brands

Direct to consumer brands’ (DTC) marketing campaigns thrive with OTT services. While social platforms have been the mainstay of DTC brands, they are beginning to realize that continued growth requires the scale of television. 

If DTC brands aren’t familiar with OTT advertising, they may assume it’s as costly as traditional television advertising. These brands will be pleased to find that advertising with online streaming services is like the other digital marketing tools they use. It offers creative flexibility and powerful data for targeting and measurement.

If You Want to Be Relevant

OTT advertising is a must if you want to be relevant to customers and potential buyers. OTT ads have the reach of traditional television commercials but with the power of data-informed audience targeting.

If you only want to pay for ads that are actually viewed by buyers and to know exactly how your ads are performing with a target audience, then advertising on OTT services is for you. Contact us to find out how easy it is to create an engaging commercial strategy with a great return on investment.

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