Marketing & Media

EVRMG Emerging Trends Series: Take Your TV Advertising Over-the-Top

Kelly Michael, Broadcast Media Buyer

Traditional over-the-air and cable television advertising accounted for over $70 billion in ad revenue in 2019, and with its broad reach, it remains one of the most coveted placements available in the media landscape. However, advertising revenue in this category has started to decline since it peaked in 2018, when ad spend reached $72.4 billion. And the global events of 2020 have resulted in an additional blow, with traditional television ad spending in the first half of the year forecast to be down 22–29%, according to eMarketer. While this is largely due to the cancellation of sports seasons and televised political events, with new options for distributing video content now becoming more mainstream, this downward trend is expected to continue.

One broadcast platform that is picking up some of this spend share is “over-the-top TV” (OTT).  In layman’s terms, OTT is actually quite familiar: Hulu, Netflix, Apple TV, Disney+—any television-like content delivered through an Internet connection. It is a companion to traditional TV & cable that skews younger and predominantly consists of cord-cutters and cord-nevers. These viewers stream programming entirely over the Internet, using any device, anytime, anywhere.

OTT is anticipated to surpass traditional TV and cable viewing by 2025, according to a study by Roku, which predicts that 60 million households will watch TV exclusively through streaming services in the next five years. If that weren’t reason enough to consider OTT for your media plan, consider this: Consumers are more receptive to viewing ad content through streaming services. Because they are able to choose selectively which programs they would like to watch and when, there is a greater willingness to watch an ad rather than on over-the-air or cable television, where we’re all guilty of the occasional channel flip.

But be aware that not all OTT services offer the same advertising opportunities.

  1. You can’t buy ad space on subscription video on demand (SVOD) services such as Netflix, Apple TV or Disney+. Users instead pay a higher monthly subscription fee for ad-free streaming. You can buy ad space on platforms such as Hulu, Roku, Amazon Fire TV, Pluto, AT&T TV and more.
  2. Connected TV (CTV) is not synonymous with OTT. CTV is the device on which you watch OTT content—think: your Apple TV box, Roku, gaming console or smart TV. OTT is how the content is delivered (through the Internet). You do not necessarily have the same advertising options—such as click-through to a landing page—through CTV devices as you do through OTT streamed on mobile, desktop or tablet devices.

Despite these small hurdles, there are numerous benefits to advertising through OTT.

  1. Precise audience targeting: OTT allows us to add layers onto audience targeting, including demographic, geographic, household income, home ownership status, home value, consumer lifestyle and interests, marital status/family makeup and even political views.​
  2. Video completion rates (VCRs): VCRs are guaranteed by most to be 95%+, as ads are non-skippable. Even better, most will not charge for the impressions unless the video is completely viewed, so if someone exits out of a program halfway through your ad playing, you won’t be charged for it.
  3. Frequency capping: OTT services offer frequency capping to set a finite number of ads to be served in a given 15-minute period. They are also able to offer daily capping, so the advertiser/brand can determine the maximum numbers of ads they want served on a daily basis.
  4. A/B testing: Streaming services offer the ability to A/B test creative concepts. You can change the color of certain elements on your ad, change the copy or even create targeted user experiences based on certain user behaviors and attributes (e.g. pick the ad experience you’d like).

While there’s no doubt that traditional television still reaches millions, consumers still have a plethora of other viewing choices. That makes now the perfect time to include OTT advertising in your marketing plan. If you’re looking to place highly targeted ads in a (currently) less competitive advertising landscape and want to see how OTT can fit into your budget, contact the EVR Media Group. We have the expertise to tailor the perfect strategy for you.

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