What Is OTT and How Does It Work?

OTT (Over-the-Top) Video Consumption Is Higher Than Ever

The way people around the world today consume their TV shows and movie content varies greatly from what we saw 20 years ago. In the past, viewers watched TV by “appointment viewing,” where families huddled around their TV at the same time each week to watch their favorite sitcoms and shows.

What we see today is still similar in terms of what we are watching, however, we have seen a major shift in the viewing habits and how we are watching. Today, nearly 520 million United States consumers are watching OTT (over-the-top) video:

Source: Statista

What Is OTT Video?

OTT is an acronym for over-the-top. OTT is the delivery of TV and movie content to anyone who has access to the internet by going “over the top” of broadcast television. In layman’s terms, this means watching television content:

• Anytime – When it’s most convenient for the viewer, not necessarily when an episode premiers
• Anywhere – In homes, cars, hotels, etc.
• On any device – Smart TVs, phones, tablets, gaming consoles, computers, Chromecast, Amazon Fire Stick, Roku, and more
• On any streaming service or TV network app – Streaming services such as Sling and Tubi, and streaming apps like HGTV, NBC, Trvl, TLC, FOX, FOX Sports, A&E, Discovery Channel, and more

If you’ve ever watched live sports on your FOX Sports app on your smart TV, enjoyed a DIY show on the HGTV app on your tablet, or caught up on your favorite TV show in a hotel on a work trip (or anything similar), you have viewed OTT video.

OTT vs. CTV, What’s the Difference?

It is important to recognize the difference between OTT and CTV—Connected TV.

CTV is defined as any device that can connect to a TV or smart TV that facilitates the delivery of streaming video content via the internet. For example, gaming consoles such as Xbox and PlayStation, Roku, Amazon Fire Stick, Apple TV, and many more.

There’s one big difference between OTT and CTV:

• OTT – The process of watching content via internet stream (physically watching video content)
• CTV – The device used to consume your OTT content

The Rise of OTT Video: Why Are Consumers Cutting Cords?

As we mentioned earlier, OTT has grown a lot in recent years as people have been deciding to move away from broadcast television—you know these as “cord-cutters.” There are a few reasons why OTT is becoming more popular as time progresses.

OTT Provides More Choices than Broadcast Television

OTT gives viewers a personal choice. Viewers choose what streaming services they want to subscribe to, rather than being locked into the specific channels and contracts they receive from their broadcast TV providers.

View OTT Content on Any Device, From Anywhere

With OTT, viewers have the convenience to stream their preferred content on any device, at any time—on their iPad while lying in bed, on their smart TV, their gaming console in their man cave, or even on their phone while commuting to work on the subway.

View OTT Content at Any Time

Your favorite TV show is Grey’s Anatomy, but you’re busy picking up your kids from baseball practice every Thursday at 8 pm ET. Well, with OTT content, viewers have the ability to consume their favorite shows any time they want, instead of having to be locked into watching during the one-time slot per week the show airs on broadcast television.

So, What Does This Mean for Advertisers?

OTT Advertising Provides Many Benefits Cable TV Cannot

OTT advertising brings many benefits to the table for advertisers looking to build and grow their brand that cable TV can not—mainly, hyper-specific audience targeting.

For local businesses and other advertisers investing in broadcast television, their commercials are served to a very broad audience, which doesn’t always translate into their target audience actually viewing their ads.

That’s not the case with OTT advertising.

OTT Advertising Benefits

Better Audience Targeting than Cable TV

OTT advertising allows advertisers to build a custom, hyper-specific audience based on behavioral and contextual demographics. As a local business, this is critical to your advertising success. Is your ideal customer a homeowner living in a 10+-year-old home, with a household income of greater than $100,000, living in a specific ZIP code? Well, you can target these homeowners directly with OTT advertising.

Put simply, OTT advertising gives companies the power to target their ideal customers just before they are aware they need your products or services. TV commercials instead serve your ads to potentially millions of unqualified viewers.

Guaranteed Ad Viewership

People watching OTT content are unable to skip ads, close their browser window, install an ad blocker, or simply change the channel. This gives OTT advertisers a huge advantage over those investing in broadcast television, as they can ensure that their ideal audience member actually watched the entirety of the ad.

Geographic Targeting

OTT allows you to get more specific with your geographic targeting when compared to broadcast TV. On broadcast TV, your ad will be shown to an entire DMA (designated market area) that you chose to target. Viewers in your DMA might be your target audience; however, it will also include some service areas that aren’t a priority for you.

With OTT advertising, you are able to choose the specific ZIP codes where you want this ad to be shown, dialing in on your specific target audience and eliminating any unnecessary impressions from low priority service areas.

Advanced Analytics

Getting detailed data points from your marketing efforts allows you to make the best decisions for your company. Because all OTT content is consumed via an internet connection, this means that you are able to get advanced and detailed analytics on exactly how your ad performed. You can then optimize your ads for better performance—knowing what worked and what didn’t—in order to change your strategy and re-engage with your target audience.

High-Quality Impressions

Based on all the targeting benefits above, this means that we will be guaranteed more impressions from an OTT ad than a broadcast TV ad. With broadcast TV, you run an ad that aims to be shown to a projection of your target audience. Each impression from an OTT ad will be of higher quality, and that higher quality comes from the advanced targeting and data that can be used beyond the scope of the broadcast audience targeting.

OTT Advertising: What Truly Matters Is the Viewer, Not the Channel

If there’s one main takeaway it’s this: What truly matters for OTT advertisers is who the ad is shown to, not what channel they are watching.

You want to reach a specific audience demographic, not every consumer who lives within a 100-mile radius of your business. OTT delivers your ads to your best customers. 

4 Reasons Why Local Business Should Advertise on OTT

1. Increased Viewership of OTT

It has been mentioned a few times already, but more and more people are deciding to “cut the cord” and switch over to OTT content. As more users are deciding to switch over, this is creating the need for more content providers to enter the OTT market, most notably services that offer free content in exchange for ad delivery.

These ad-supported OTT services will continue to grow as more people look to expand their streaming options without increasing their monthly ad spend. As a result, local businesses will continue to see their ad inventory options increase over time.

2. Improved Targeting Options for OTT Advertisers

OTT allows local businesses to really narrow in on their target audience through a number of different things. OTT advertisers can get extremely specific with the prospective audience they create based on their existing customer base. OTT also allows businesses to target users on a number of different devices. Your ads are eligible to be shown to a user viewing OTT content on their smartphone, tablet, computer, or CTV device.  By honing in on your exact audience, that makes each marketing dollar spent more efficient.

3. New Audience Availability

OTT works well when layered in with other marketing efforts such as SEO, PPC, and social media. By honing in on the exact audience you want to target, you introduce your business to a new audience that you have never been reached before.

You insert all these new potential customers right into the middle of the marketing funnel and you can see them convert through your other marketing efforts. By honing in on your exact audience, that makes each marketing dollar spent more efficient—optimizing your marketing costs and increasing ROI. Not only does OTT build up your local brand awareness, but it makes a direct impact in the number of leads your business is driving as well through other digital channels.

4. Better Data & Analytics

OTT allows you to get advanced analytics into how your ad campaign performed. When running other marketing efforts, the data your digital marketing provider can get from OTT allows you to better understand the impact your OTT campaign had in a multi-channel ad strategy. This then allows you to optimize spend to determine which ad campaigns offer the greatest value to your business.

Blue Corona Now Offers OTT Advertising to Local Businesses

OTT is growing in popularity, and as more and more consumers turn to Google to find and hire local businesses, OTT ads are a natural complement to your digital marketing investments to create brand lift and increase leads and sales.

Interested in learning more about how OTT advertising can increase leads and sales from your website and reduce your cost-per-lead across your online marketing investments? Send us a message.