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Understanding and Exploring the Benefits of OTT Advertising

Marketing
Marketing
Published: Jul. 28, 2023

In the rapidly evolving landscape of entertainment, traditional cable television is losing its appeal to an increasing number of users who are opting for alternative methods of watching their favorite shows and movies. One such method gaining significant popularity is over-the-top (OTT) advertising, which is projected to reach $224 billion in 2027.

Global OTT TV & video revenues by source

What exactly is OTT, and how has it shaped the future of entertainment? Let's delve into this topic and explore the potential of OTT as a game-changer in the world of media consumption.

Want to learn even more about connected TV and OTT? Check out our essential guide to CTV vs OTT advertising.

What is OTT advertising?

Over-the-top, or OTT, refers to the direct delivery of TV/video content via the internet. The term began as a catch-all for all non-traditional TV — or any premium video delivered outside of conventional set-top-boxes. Whether it was streaming Netflix on your smartphone or watching it on a smart TV, both instances fell under the umbrella of OTT.

However, in 2021, the Media Rating Council (MRC) took a pivotal step and officially redefined OTT to distinguish it from connected TV, which had experienced a tremendous surge in popularity in recent years. This change aimed to provide clarity and delineate the two distinct concepts within the evolving media landscape.

OTT devices come in several forms:

  • Streaming boxes such as Roku TV.
  • Smart TVs that use internet-based services like Netflix and Hulu.
  • Gaming consoles such as Xbox 360 and PS4.

Unlike traditional TV broadcasts, OTT media services provide widespread accessibility across multiple devices, including computers, tablets, smartphones, and connected TVs. This expanded reach creates opportunities for advertisers to broaden their audience and maximize their campaign budgets. Industry experts predict a substantial boost in advertising revenue from OTT, with estimates ranging from a 45% to 60% increase.

Smartyads OTT graphic

Is connected TV the same as over-the-top?

In the advertising realm, CTV and OTT are closely related but have two distinct meanings.

CTV refers to internet-connected televisions that enable streaming video content. On the other hand, OTT pertains to the method of delivering video content directly over the internet, bypassing traditional distribution channels.

In essence, CTV is the physical device, whereas OTT is the content delivery method.

Key benefits of OTT advertising

OTT advertising proves to be a win-win situation for all parties involved. Consumers appreciate it because they can access a wide range of content without the limitations and costs associated with traditional TV subscriptions. Advertisers find it appealing due to its addressability, which gives them the ability to target specific households for their campaigns, deliver personalized creative, and deterministically link their TV campaigns to business outcomes that occur on other devices.


Furthermore, OTT also provides the following benefits to advertisers:

More Engaged Audiences

Approximately 98% of OTT device users watch ads in their entirety. Similiar to conventional TV, viewers cannot skip OTT ads, utilize ad blockers, or conveniently switch browser tabs as you would in a traditional web environment. Consequently, this situation ensures that a higher number of viewers are exposed to an advertiser’s message and are more likely to watch ads in their entirety.

Advanced Targeting Abilities

Regardless of whether OTT content is consumed on a mobile device, desktop or connected TV environment, a precise degree of audience targeting is highly feasible. Audience targeting pools can be built up from a combination of content consumption behavior, survey data, browsing behavior across websites and apps, and data collected by connected TV apps when signing up. Mapping devices across a household helps in stitching data together across devices, allowing for person-level targeting in a household on shared devices such as a connected TV. This approach yields valuable data on viewers' habits, empowering advertisers to target based on unique preferences and behaviors.

Attribution

Measuring the direct impact of OTT ads — specifically on CTV devices — on lower-funnel metrics has historically been a challenge for advertisers, primarily because there is no direct "click" as seen in traditional web advertising. However, new technologies are bridging this gap and can effectively attribute CTV ad campaigns to real business outcomes — like Simulmedia’s TV+. How? Our CTV attribution model analyzes the IP addresses exposed to CTV ads and deterministically ties those to the IP addresses by the website pixel within the set attribution window.

Real-time optimization

With new technologies that allow for real-time data on OTT ad performance, advertisers can make on-the-spot decisions about budget allocation. They can prioritize ad spend on apps, dayparts or creatives that are driving better results and adjust spending for underperforming areas. Take our Automated Performance Optimization engine, for instance. After brands set up the Simulmedia Pixel on their website or app, TV+ pulls the tracked web data in real-time into the APO engine, which optimizes the targeting and budget allocation strategy automatically.

Unleashing the Power of OTT Advertising: Reach, Target, and Amplify Your Brand

Simulmedia's TV+® platform enables brands to reach audiences with unparalleled certainty, efficiency, and guaranteed scale, by planning, activating, measuring, and optimizing campaigns across both linear TV and CTV. Through a data-driven cross-channel strategy encompassing audience segmentation, targeting, ad placement, and campaign measurement, no relevant audience is overlooked.

Ready to plan your next connected TV campaign? Request a demo to see how Simulmedia can help you optimize your TV campaigns.