According to analysts, US cable, satellite, and internet TV providers lost a collective 2.3 million customers in the first quarter of 2023, which marks their worst subscriber losses so far. As streaming and on-demand platforms continue to expand their content and service offerings, the decision to cut the cord is a complete no-brainer.
TV advertisers follow the same trend — ad spend on these platforms increase by several billion dollars every year, and it’s projected to hit nearly $41 billion by 2027.
For advertisers, this new era of TV advertising means better targeting, greater value for their money, and higher conversion rates. But there are several things you should know about these new advertising mediums before you begin planning a campaign.
CTV and OTT advertising are the new digital mediums for reaching TV audiences. They allow you to get in front of viewers who watch content on streaming or on-demand platforms like Hulu, Amazon Prime Video, and Netflix.
Unlike traditional television ads — which reach all viewers within a given geographic area regardless of their interests — CTV and OTT ads can be targeted to specific audiences based on demographics, interests, and behaviors. This allows you to target your campaigns more effectively and get the most out of your ad spend.
In addition to better targeting, CTV and OTT advertising also offer greater flexibility in terms of creative formats — from 15-second bumpers to interactive ads that allow viewers to take action directly from their TV screens. By leveraging these new formats, advertisers can create more engaging campaigns that are more likely to capture viewers’ attention and drive conversions.
While they may seem similar at first glance, you should be aware of some key differences when comparing OTT vs. CTV.
Both CTV and OTT advertising involve delivering video content and ads to viewers through internet-connected devices. These platforms allow advertisers to reach their target audience more effectively than traditional TV advertising, as they provide better targeting capabilities and advanced analytics.
The benefits of each are also similar — CTV and OTT platforms offer a more personalized and engaging viewing experience for users, who can watch their favorite content on-demand and across various devices.
Despite their conceptual similarities, CTV and OTT are different in the following ways:
Research from the Interactive Advertising Bureau shows that over half of marketers consider CTV and OTT “top of mind” but only around 15% actually use it in their strategy.
There are several reasons why advertisers might be reluctant to embrace CTV and OTT advertising:
Many marketers are more accustomed to traditional TV advertising and may not fully understand the benefits of CTV and OTT. The unfamiliarity with these platforms can make it difficult for them to justify allocating resources to explore these advertising options.
The language used in the CTV and OTT space can be confusing and inconsistent, with different vendors often using different terms to describe similar concepts. This can create uncertainty and confusion among marketers, making it challenging to navigate the landscape and make informed decisions.
The technology behind CTV and OTT advertising can be complex and intimidating for those who are new to the space. Some marketers may feel overwhelmed by the technical aspects, such as programmatic buying, and might not be confident in their ability to effectively manage campaigns on these platforms.
Although companies that have adopted CTV and OTT advertising tend to spend significant amounts on these platforms, smaller businesses or those with limited budgets may find it difficult to allocate funds to explore these relatively new advertising channels.
Measuring the success of CTV and OTT campaigns can be more complicated than traditional TV advertising. While these platforms offer advanced analytics and targeting capabilities, some marketers may struggle to determine the most relevant metrics and accurately measure campaign performance.
The CTV and OTT market is highly fragmented, with numerous platforms, devices, and content providers competing for attention. This fragmentation can make it challenging for marketers to develop a comprehensive strategy that reaches their target audience effectively.
As CTV and OTT advertising continue to grow and evolve, marketers need to be prepared to address the challenges that come with these platforms. Here are some strategies for navigating the future of CTV and OTT advertising:
By following these strategies, marketers can successfully navigate the challenges of CTV and OTT advertising and harness these platforms’ power to drive better future results for their businesses.
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