OTT Marketing: The Future of Video Advertising

By: Kristen Smith

What is OTT and why is it important?

OTT, or Over the Top, refers to video streaming services that allow users to watch shows and movies through the internet and on the go. Some of the most popular OTT platforms include Netflix, Hulu, Prime Video, and Disney+. These platforms are highly data driven storing information about each user and how each user interacts with served advertisements. 

Current trends show OTT marketing is the future of video advertising. A large increase in streaming subscribers in the past decade is capturing the attention of advertising industry leaders. Additionally, there has been an 80% increase in total streaming time since the start of the COVID-19 pandemic. Not only has OTT taken a strong hold on consumers, but the platforms aren’t going anywhere after the pandemic is over. The OTT market is expected to grow another 20% in the next 7 years. 


When should you consider buying OTT vs. TV or Cable?

First, it’s important for marketers to understand that OTT is not just TV through the internet. TV/Cable and OTT have very different advertising capabilities and purposes. If you think TV/Cable marketing would work great for your brand, OTT advertising is not a replacement for this medium. Here are a few advantages of OTT advertising that can help you decide whether or not you should consider including it in your brand strategy:

  • Narrow Targeting: OTT platform data can be used to more specifically narrow down the segment you want to serve your advertisement to.
  • Reporting Metrics: OTT offers better data for measuring results than traditional TV. The internet is better able to measure impressions and more directly tie viewership to sales using click through rates and conversion rates. OTT gives marketers more freedom to track how ads are performing and experiment with optimizing them in real time. 
  • Youth Reach: Both media types reach a wide variety of demographics. Many consumers are becoming “cord-cutters” or “cord-nevers” meaning they have gotten rid of their cable subscriptions or never purchased one to begin with. Since 2012, roughly 10 million Americans have cut their cable subscriptions, and it appears the majority of Gen Z adults don’t subscribe to cable at all. OTT is an increasingly effective way to reach young people that traditional TV can't.  
  • Formatting Capabilities: TV advertising has a very strict format while OTT offers unique capabilities like interactive. Seeing where creatives take these new formatting possibilities is something marketers will want to keep a close eye on. 


A Developing Market

This segment of marketing is fast growing, but far from perfected. Marketers should be aware that although OTT is new and exciting, TV advertising still plays a prominent role in the market. Only 39% of OTT platforms offer ad supported content, not everyone can be reached through OTT, and the majority of consumers still subscribe to cable. However, consumers are always looking for more free content, making ad supported content the fastest growing segment in over the top platforms. OTT is not a replacement for TV advertising, but an increasingly great compliment to add into your video marketing strategy. OTT is definitely the “one to watch” when it comes to advertising mediums. 




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