Understanding OTT/CTV Streaming Commercials: A Comprehensive Guide
What are OTT and CTV?
OTT (Over-the-Top) and CTV (Connected TV) are terms that have gained significant traction in the digital advertising landscape. OTT refers to content delivered over the internet without the need for traditional cable or satellite subscriptions. This includes streaming services like Netflix, Hulu, and Amazon Prime Video. CTV, on the other hand, specifically refers to televisions that are connected to the internet, allowing users to stream OTT content directly on their TV screens. Say it another way: all CTV content is OTT, but not all OTT content is CTV.
How OTT/CTV Streaming Commercials Work
OTT/CTV streaming commercials are advertisements that appear during streaming content on OTT platforms or CTV devices. These commercials can be targeted based on user data, viewing habits, and demographics, making them a powerful tool for advertisers. When a viewer watches a show on a streaming service, they may encounter ads that are tailored to their interests, enhancing the likelihood of engagement.
The process begins with advertisers partnering with OTT platforms to place their commercials within the streaming content. These ads can be displayed in various formats, including pre-roll (before the content), mid-roll (during the content), or post-roll (after the content). *note: If anyone, and I do mean ANYONE, tries to sell you post-roll ad space or campaigns fire them immediately. We have never met anyone who said the following: “Thank goodness that show is over! Now I can stick around to watch the commercials I really came here for!” Unless you’re making a superhero movie, don’t put anything after the show is over. The flexibility in ad placement allows brands to choose the most effective strategy for reaching their target audience.
Difference Between OTT and CTV Streaming Commercials
While OTT and CTV are often used interchangeably, there are key differences in how they function in the advertising ecosystem:
1. Device Type: OTT encompasses all internet-based content delivery, regardless of the device used. This includes smartphones, tablets, laptops, and smart TVs. CTV specifically refers to ads delivered on internet-connected televisions.
2. Ad Delivery: OTT streaming commercials can be served on various devices, while CTV streaming commercials are specifically designed for the television experience. This distinction is crucial for advertisers looking to optimize their campaigns for different platforms.
3. User Experience: CTV offers a more immersive viewing experience, as viewers often watch on larger screens with better audio-visual quality. This can lead to higher engagement rates for CTV commercials compared to those served on smaller devices.
How OTT/CTV Streaming Commercials Differ from Traditional Broadcast Television Commercials
OTT/CTV streaming commercials differ significantly from traditional broadcast television commercials in several ways:
1. Targeting Capabilities: Traditional TV ads are typically broadcast to a broad audience, making it challenging to target specific demographics. In contrast, OTT/CTV streaming commercials leverage data analytics to deliver personalized ads based on viewer preferences, behaviors, and location.
2. Measurement and Analytics: With traditional TV advertising, measuring the effectiveness of a campaign can be difficult. OTT/CTV platforms provide detailed analytics, allowing advertisers to track viewer engagement, impressions, and conversion rates in real-time.
3. Ad Formats: Traditional TV commercials are often limited to 30 or 60-second spots. OTT/CTV streaming commercials can utilize various formats, including interactive ads, shorter clips, and even shoppable content, enhancing viewer engagement.
Pros and Cons of OTT/CTV Streaming Commercials
Pros
1. Targeted Advertising: One of the most significant advantages of OTT/CTV streaming commercials is the ability to target specific audiences. Advertisers can reach viewers based on their interests, demographics, and viewing habits, leading to higher conversion rates.
2. Cost-Effectiveness: Compared to traditional TV advertising, OTT/CTV commercials can be more cost-effective. Advertisers can choose from various pricing models, including CPM (cost per thousand impressions) and CPC (cost per click), allowing for better budget management. We tend to stick with offering a flat rate budget instead of requiring the use of math. You tell us the budget and we will tell you the number of commercials we can get you. Simple as that.
3. Enhanced Engagement: The interactive nature of OTT/CTV commercials can lead to higher viewer engagement. Brands can create immersive experiences that encourage viewers to take action, such as visiting a website or making a purchase.
Cons
1. Ad Fatigue: With the rise of OTT/CTV advertising, viewers may experience ad fatigue, leading to decreased engagement over time. Advertisers must continuously innovate their ad content to maintain viewer interest. With the exception of the Christmas ads we see every year, we see you chocolate kisses making a ringing bell, you should always be rotating commercials regardless of format or viewing platform.
2. Limited Reach: While OTT/CTV platforms are growing rapidly, they may not reach all demographics, particularly older audiences who may still prefer traditional television. Advertisers should consider a multi-channel approach to maximize reach.
3. Technical Challenges: Implementing OTT/CTV advertising can come with technical challenges, such as ensuring compatibility across various devices and platforms. Advertisers must work closely with technology partners to navigate these complexities.
OTT/CTV streaming commercials represent a significant shift in the advertising landscape, offering brands the opportunity to engage with audiences in a more targeted and measurable way. By understanding the differences between OTT and CTV, as well as the advantages and challenges of this advertising tactic, businesses can effectively leverage OTT/CTV streaming commercials to enhance their marketing strategies.
As the digital landscape continues to evolve, embracing OTT/CTV advertising will be crucial for brands looking to stay competitive and connect with their audiences in meaningful ways.
Let's Turn the Channel to Real World Teaching!
We LOVE OTT/CTV. We hate the name OTT though! If it was just called streaming device commercials the entire country would already be doing it! But, since it has that goofy name, and the rest of the country isn’t doing it, you can take advantage! Here is why we LOVE this technology:
- We aren’t watching LESS television! If anything we are watching more! New channels, new streaming services, new bundle options, ad supported levels of previously non-ad based platforms. It doesn’t stop! There are millions and millions and millions of streaming commercial spaces available for your commercial to appear.
- The ability to target this based on demographic blows away the traditional TV model. Let’s walk through why. You are watching the 6 o’clock news on your traditional cable provider service.
Before they kick it to Stormy Hale in the Action News weather center they go to commercial. The commercial that gets put out there is seen by everyone! The same commercial. Regardless of where they live, how old they are, or what they care about.
Not in the market for a car that would cost as much as your rent every month? Too bad! You get to watch it anyway! That is where streaming commercials are different. Instead of BROADcast tv commercials you get to NARROWcast your tv commercials! By adding in the targeting options of OTT/CTV streaming TV commercials you can show the exact right person the exact right content. The same car company can show 2 different commercials at the exact same time, to 2 different households, even if those 2 houses are next door to each other!
Targeting both houses on Elm Street individually allows for greater impact of the ads and eliminates the wasted money on commercials that have no chance of landing a memorable blow with a potential customer. You are happy as the business and Elm Street is happy too. Well, until Freddy shows up and then the commercials won’t matter…
- Legal note: Freddy K is not a paid endorser of our services and we meant to include the word “allegedly” in reference to anything he potentially did on Elm Street. Thanks lawyers!
3. The final reason we LOVE OTT/CTV as a tactic is because it can put you on the same level playing field from a budget standpoint as anyone else. It’s not uncommon for an ad break on streaming to show a national Fast Food advertiser, local big budget car dealer, and a small business right down the street in the 90 second break. It’s pretty neat to be able to offer that opportunity to clients.
There is a lot more to talk about when it comes to this tactic including more Pros and Cons. But, you already read this much so we will dismiss the class. If you do want to learn more or talk about how to get your commercial targeted and delivered, just Contact Us!
