The Future of Video Advertising: OTT and CTV

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For those familiar with the television industry, you’ve probably heard of the term “cord-cutter.” It refers to TV viewers who’ve partially or fully opted out of traditional (linear) TV services such as subscriptions services (cable and satellite).

We’ve already discussed how the TV landscape is changing in favor of over-the-top (OTT) streaming services or connected TV (CTV). In the US alone, less than 44% of households that own TVs are wired to a cable box or satellite, and the numbers are projected to decline further.

This makes sense considering the price disparity between a cable subscription and a streaming service. Not to mention, the lack of customized cable channels means you’re advertising to a fairly broad audience, and the considerable ad break length prompts viewers to hop between channels rather than watching an ad all the way through.

But what does this mean for the future of video advertising?

In this article, we’ll take a look at how the shift in viewer behavior is shaping the way advertisers approach video marketing. Our main focus will be the benefits and hurdles of OTT/CTV ads.

Tailor Your OTT and CTV Advertising Based on Viewer Data

The same reasons that make OTT and CTV services so appealing to viewers — primarily the ability to customize your viewing experience — are also major advantages for digital advertisers.

Because viewers expect a more customized experience from their streaming services, many OTT services collect extensive data on viewers to best tailor their experience. This means:

  1. Tracking the content that users seek out
  2. Analyzing viewer behavior
  3. And recommending new content based on viewer inputs

OTT services also benefit from collecting viewer data by following single sign-on models that often prompt viewers to log in with their Facebook or other third-party account.

While this does translate into a fragmented user base, at the end of the day, this level of data mining results in highly sophisticated viewer personas with contextualized behavior.

Digital advertisers can leverage that wealth of information to better target their ads. Rather than predicting where your audience might be, you’re making informed ad placements based on what they’ve already expressed interest in.

Different OTT and CTV Services Require Different Specifications

An increasingly customized viewer experience offers a lot of opportunities for advertisers to target ads — you can show specific to different demographics within a single household with OTT and CTV services.

However, too much customization can become burdensome for advertisers, especially since each service has its own pricing model and specifications.

Add on to that mobile/tablet viewers versus TV viewers (both their behaviors and device specifications), and it becomes clear that OTT/CTV ad placement is far more complicated than its traditional counterpart.

This lack of standardization also applies to metrics. OTT and CTV services might have different ways of collecting ad data, which can make it difficult to gauge how effective a video ad campaign is.

For example, YouTube offers viewers the ability to skip ads after the initial few seconds, which can be a great indicator on your ads ability to generate interest. But other streaming platforms might require users to watch ads through all the way until the end.

Those specifications would also change the way you’d craft the video ad. Skippable ads should have a strong hook to keep viewers engaged (you can track at what point viewers click away), whereas mandatory ads should be shorter to ensure a seamless viewing experience.

OTT and CTV Advertising Are Here to Stay

As OTT and CTV services become increasingly popular, advertisers will need to adapt their video marketing strategies if they want to keep up. OTT and CTV offer a wealth of viewer data that allows advertisers to reach niche audiences, but the variety in platforms has resulted in inconsistent ad requirements.

Regardless, it’s clear that OTT and CTV advertising is a necessary investment for video marketers. That’s why our team strives to be one of the top development firms for digital marketing agencies. Our goal is to help our clients stay at the forefront of TV and digital advertising through advanced technical solutions.

Interested in starting a project with us or want to learn more about our company? Contact us today to discuss how we can help your business succeed. You can also explore our service lines on The Manifest as well as browse portfolios on Visual Objects.