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What Is OTT and CTV, and Why Should You Consider Advertising on It?

By Snap Agency September 14, 2020

Can you remember a time before TV streaming services dominated the market? Neither can we. In fact, as of May 2020, 62% of adults in the United States were subscribed to some streaming service or other (Statista). That statistic is almost certain to increase during the COVID-19 pandemic, while many of us are at home with time a-plenty to binge-watch our favorite shows.

If you’re in marketing, the takeaway here is that traditional TV advertising (i.e., basic cable and public ad slots) are nowhere near as effective as they used to be. While you can reach a specific geographic audience with traditional ads, it’s still much harder to narrow in on a target demographic than with OTT and CTV. These funky little acronyms hold the key to reaching precisely the right audience at precisely the right time. Let’s find out how this works.

OTT and CTV Advertising: The Basics

OTT stands for “over-the-top,” and no, in this case, it doesn’t refer to your eccentric neighbor or coworker. It’s a service used to stream digital content to a “connected TV” (CTV), which is a streaming device such as a smart TV, game console, HDMI stick, and so on.

What Are Some Examples of OTT Advertising Companies?

Here are some of the most popular OTT advertising companies. How many of the following do you already have installed on your connected TV device?

  • Netflix
  • Hulu
  • Amazon Prime Video
  • Sling TV
  • Crackle

What Are Some Examples of CTV Devices?

OTT wouldn’t be complete without a CTV to match, so let’s review some popular connected TV devices, too.

  • Roku
  • Apple TV
  • Amazon Fire TV Stick
  • Chromecast
  • X-Box
  • PlayStation
  • Wii U

How Does Advertising Work With OTT and CTV?

OTT and CTV advertising is online advertising that targets relevant audiences and content channels. You’ve seen it before, perhaps without fully realizing it—an ad break on Hulu that features a similar (or the exact) product you were researching earlier that day. Not everyone in your geographic area receives that same ad, even if they use the same CTV device as you. Unless, of course, you all have the same interests and search history at all times (but we’re going to assume that’s not the case).


Benefits of Investing in OTT and CTV Ads

Unsurprisingly, OTT and CTV-based ads are reshaping the digital marketing landscape. Here are just a few of the ways they are transforming this sphere for the better.

  • They’re efficient. Given their ultra-targeted nature, OTT and CTV ads don’t waste valuable paid ad slots on the wrong target audience.
  • They’re engaging. Relevant ads are less likely to lead to skips from exasperated users.
  • They’re (sometimes) unskippable. Depending on the streaming service and the type of paid plan in use, some OTT ads must be consumed before the viewer can keep watching a program. While this may momentarily frustrate some users, it inevitably gets your brand on their radar.
  • They’re data-driven. Readily available statistics make it that much easier for marketers to measure an ad’s success and demographic reach.

Ad Streaming: Frequently Asked Questions

Streaming may have been around since the early 1990s, but OTT and CTV advertising are still relatively new concepts. With that in mind, let’s answer some of your burning questions about this innovative digital marketing method.

What Is OTT Inventory?

As you may know, ad inventory is the amount of space available in the media for ads. This amount of ad space is, of course, finite. OTT inventory, then, is the amount of ad space available on an OTT platform.

OTT inventory typically means a 30-second ad slot, though some 15- and even 7-second inventory is available as well. The number of ads varies per platform; Hulu, for example, typically has three ads per half hour for a total of 5 minutes ad time.

How Do I Buy OTT Ads?

There are two main ways to buy an OTT or CTV ad: Guaranteed Insertion Orders and Data-Driven Programmatic. With Guaranteed Insertion Orders, buys have set prices and impressions, based on frequency, reach, and many other factors. Data-Driven Programmatic is based on a bidding environment, which doesn’t promise prices or impressions but does allow agencies and companies alike some amount of control.

Snap: Not Your Parents’ Advertising Techniques

Successful OTT advertising requires a well-defined creative strategy. Lucky for you, Snap is well-versed in just that, as well as all the up-and-coming digital marketing tactics that help brands target the right audience. Let’s chat and stay ahead of the curve together.