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Top 6 Reasons Why Brands Need to Consider OTT and Connected TV Advertising

Advances in technology are felt in almost every industry which in turn changes how businesses need to approach interactions in those industries. For marketing, one area of interaction which needs to be redefined is how advertising can be effectively implemented for the television viewing audience. In the last decade how, where, and what consumers watched has experienced a tremendous shift with the explosive growth of OTT and Connected TV.

Many businesses are still utilizing older models for marketing and advertising, which ignores the growing market for OTT services. As a top digital marketing company, we wanted to share the Top 6 Reasons Why Brands Need to Consider OTT and Connected TV Advertising. This is an area of incredible potential which many businesses will benefit from using as the niche continues to expand.

OTT and Connected TV

Connected TV (CTV) refers to any type of TV which can connect to the internet to access information beyond what is offered by a cable provider. CTV is commonly called “Smart TV” at the consumer level and it is difficult to find a new TV that does not have some level of connectivity.

Often sales packages will include free service for a month of popular streaming platforms such as Hulu, Netflix, or Sling TV. This can take advantage of a lack of knowledge with consumers as many streaming platforms offer 1-month free with sign up for their service. There are also free options such as Sony’s Crackle.

OTT stands for Over-the-top which is in essence streaming platforms like Netflix or Hulu that bypass traditional platforms, such as cable television, to provide content via the internet. The name OTT was derived from how devices originally were implemented by going “over” the top of a cable box.

Originally OTT was accessed on personal computers, smartphones, tablets, video game consoles, and via USB connection devices on television such as the Amazon Fire Stick or Google Chromecast. Those methods also include CTV.

As cable prices have steadily increased over the years, the concept of “cutting the cord” has become more popular which is evidenced by the rise in popularity of the various streaming services. Millennials especially are more likely to cut the cord. Additionally, numerous households utilize cable television in addition to streaming platforms such as Netflix or Amazon Prime because of the original programming being created on those platforms which are not available elsewhere.

Top 6 Reasons to use OTT and CTV Advertising

  • Audience Size – According to a recent study of digital media trends by Deloitte, in the U.S. a household has on average three streaming video subscription services. Additionally, approximately 43% of all households have both traditional pay TV and streaming subscriptions. The audience size for OTT is already very large and expected to grow larger as streaming services expand rapidly on the global stage.
  • Millennials Prefer CTV – Millennials do not have the same attachment to conventional television as older generations. The TV offers a level of comfort and nostalgia for Baby Boomers and Generation X which Millennials do not share. According to various surveys, approximately 65% of millennial households utilize CTV only. Millennials are currently the largest consumer demographic with the most buying power so getting ads to them is important for many businesses.
  • Audience Segmentation – One difficulty that has always been present when applying traditional marketing to cable or dish TV was facing a large audience size. Streaming platforms offer better segmentation of an audience for multiple reasons. To start, there are very specific niche platforms such as sports streaming services or classic movies that have a much more defined demographic. Additionally, while some services offer “live TV” many people that use streaming services do not watch live shows. This creates more built-in segmentation to the demographics of an audience.
  • Granular Targeting – Targeting has been difficult for both cable and dish TV. Traditionally a commercial spot plays regionally or nationally to all users watching a channel, but that changes when using on-demand services or even live streaming. Most profiles start with basic information about a user and then as shows are viewed that data is tracked. This will allow marketers the opportunity to then target specific user profiles on the platform with ads using dynamic ad insertion. This can be done very specifically to include device type as well. Data analytics allows for measuring of audience engagement very easily which in turn results in performance-based advertisement.
  • Encapsulating Entire Journey – The customer journey has been a call-to-arms for marketers over the past few years. Understanding customer personas, motivations, and finding the right time to present an offer has never been more important in our age of connectivity and information overload. OTT and CTV advertising is another step towards obtaining a fully connected view of a customer. By linking technologies and using real-time data analysis, marketers can use OTT to get new leads and remarket to hot leads based on what they are searching for online, engaging with on social media, and watching on a streaming service.
  • Higher ROI – Traditional television advertising has been called shotgun advertising because of difficulties with engagement. People seem to be less bothered by CTV ads, partially because it is understood that watching a 30-second ad is now the price for utilizing free or low-cost platforms. These ads are also often considered less annoying because they are more relevant due to better targeting. This creates a higher ROI compared to traditional television advertising models.

The Bottom Line

The bottom line is that technology has changed how people watch tv. No longer is there a single box in the living room that the entire family gathers around each night to obtain news, watch sports, or be entertained. Users now want to access the massive amounts of entertainment content cheaply and easily from any location and device. This shift has created an opportunity for savvy brands which we have outlined in our Top 6 reasons why brands need to consider OTT and CTV advertising; unless of course, your business wouldn’t benefit more leads and increased conversions.


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