These days, almost everyone is streaming TV through OTT (or over-the-top). Services like Netflix, HBO Max and Disney+ are all examples of OTT channels, or internet-based video channels.This year, OTT advertising spend is expected to hit $9 billion in the US. So if you’re thinking of creating an ad-based OTT channel, now is the perfect time.
In this article, we’ll define what over-the-top marketing is and why it’s important in 2020. We’ll also go over ways that you can make money from OTT advertising, both as an advertiser and a video distributor. Read on below for a full breakdown of what OTT marketing is and how brands incorporate it into their business model.
What is OTT marketing?
OTT marketing is the delivery of ads through online video streaming. This includes connected TV advertising (or CTV advertising), which runs video ad interruptions, banner ads, sponsored content and more.
This is different from traditional TV advertising. Traditionally, TV advertising was usually controlled by the network and the corporations advertising on it. However, over-the-top marketing allows companies to bypass traditional TV providers, which usually control media and content distribution across regions. OTT ads have given marketers a powerful tool to reach audiences directly and get them to buy their goods.
Why are brands spending on OTT marketing?
2020 has been a year of trend acceleration, and online marketing is no exception. One of the fastest-growing sectors of the covid-19 pandemic has been e-commerce. This spike has created a major opportunity for certain businesses to try out OTT marketing tools, including algorithm-based ads, to help drive more sales.
With streaming services becoming standard, OTT marketing is naturally overtaking cable TV commercials. All these factors are reshaping how businesses continue to direct their paid media dollars in more valuable ways.
With OTT, brands can choose how and when to air their marketing campaigns to hit certain demographics. Take, for example, a young digital brand. Instead of spending on generic ads like subway advertising, they can target their precise audiences with smart TV commercials. Think Freshly, the meal subscription service, or home cleaning supplies marketplace Grove Collaborative. These brands and others like them have become mainstays on ad-supported OTT channels like Hulu, along with the smart TV counterparts of cable networks, such as CNN GO.
OTT marketing helps minimize ad spend waste.
These days, running round the clock TV and social media ads isn’t the best use of brands’ time or budget. As we mentioned above, that’s where OTT marketing comes in. It’s yet another reason marketers increasingly prefer it to traditional video advertising. The way digital OTT commercials work is by unleashing precise targeting that eliminates wasted runs. For example, if you’re interested in athleisure wear, you’ll likely see relevant ads by brands in this category while watching smart TV. Not only does this OTT marketing tactic help increase awareness of the brand, but is more likely to turn the viewer to a paying customer.
OTT marketing doesn’t end with TV.
Another benefit of OTT advertising is its built-in tools that allow brands to retarget viewers through web and mobile traffic. In marketing, this is known as closing the cross-channel loop, which allows a campaign to follow the consumer around the web. In short, marketers can effectively retarget a viewer who’s seen a certain smart TV spot with promoted ads on other websites later on.
While the benefits of over the top marketing are vast, there are also some challenges that have to be worked out as the medium grows. Many of these have to do with brands’ ability to accurately measure campaigns’ success, such as return on investment (ROI). For example, being that it’s less interactive than the web or mobile advertising, OTT marketing still has a long way to go in assessing sales conversions.
How can I make money with an ad-based OTT channel?
There are a few different ways you can get started making money on OTT. The #1 way to build any OTT app is with MAZ. MAZ is a no-code platform that allows any business to launch a fully custom, monetizable streaming channel in a fraction of the time. Learn more and get started here.
Or if you want to get started for free, Roku provides a free publishing tool on their site. However, you will need a fair amount of technical experience in order to navigate it. Also, your feature set will be relatively limited, and Roku will take a portion of any profits you make. If you’re a serious business with any budget, we recommend trying another method first.
There are many ways to engage consumers on OTT platforms. From paid OTT advertisements to sponsored content and beyond, the possibilities are growing each day.
At MAZ, we’ve helped top media outlets such as Conde Nast and Wired build custom OTT channels, a foundation for their OTT marketing offerings to brands. Our team has been helping businesses get their OTT channels off the ground for the past decade. If you’re looking to grow your business with an OTT service, get in touch with us here.
Thank you for reading, and happy advertising!