OTT Advertising vs. TV Commercials. Is It True that Advertisers Are Moving their Budgets from TV to Digital?

OTT Advertising vs. TV Commercials. Is It True that Advertisers Are Moving their Budgets from TV to Digital?
Photo : Image by Firmbee from Pixabay

Streaming viewership on video streaming platforms is increasing each year. In 2020, some 2.13 billion people already used OTT video services globally. All of that viewership is a boom for OTT advertising (including server side ad insertion advertising), which makes that channel poised to become the next big thing.

But how did the OTT boom take place in the first place? It may have started in America with the staggering $217 average monthly cable bill. Many people have decided to cut the cord. They no longer watch satellite or cable TV, favoring OTT platforms for their regular entertainment. Further, the number of cord-cutters is anticipated to go beyond 55 million by 2020. You see, that is a lot of potential customers.

The Consumer Shift to OTT

The way people watch video and TV these days has transformed, with more of them opting to pay online TV services than conventional pay-TV services. A study conducted by Grabyo Global found that over half of people in the markets opted to pay for an online video service.

Regardless of its massive reach, consumers rank linear broadcast TV as their third option for video, while smartphones are now the most popular device for watching video globally. Mobile viewing is the key factor in the massive growth of social media, along with penetration now higher than seventy-five percent in all markets studied.

The shift in video and media consumption has affected business models for video services, with more consumers paying for video streaming platforms than pay PV. That move to OTT is noticed in all markets, with over fifty percent preferring to pay for an online video service. The increase of mobile video has played a major part in transforming how consumers pay.

OTT Advertising versus Broadcast Advertising

TV has produced income from advertisements for many decades. Nonetheless, in 2019, traditional ad revenue significantly decreased-the biggest drop since the Great Recession. That change overlaps with the increasing popularity of OTT.

In the past few years, each major network and media agency has come out with some form of a video-on-demand (VOD) service. CTV viewing habits are beginning to resemble standard TV viewing more closely. That's great news for VOD services. That indicates viewers are using such services as more than simply a supplement to standard TV. It might be their preferred way to view. 

For advertisers, there are a lot of benefits over broadcast TV. For one thing, broadcast TV follows a linear format. That indicates the content is presented on every station based on a predetermined schedule. That limits the ability of the advertiser to target viewers according to location, demographics and even exact numbers.

Broadcast advertising uses ComScore or Nielsen rates to determine where to add content. Unluckily, that data is limited. Maybe the ratings suggest that a show is famous among the male demographic, ages 22 to 40. However, that does not give insights into the personal preferences and other factors that help personalize advertising content and give a strategic route.

On the other hand, OTT facilitates stronger targeting, which involves data at the household and individual levels. For instance, advertisers can customize and modify messages based on interests, educational level, and other demographics.

That means that multiple viewers can watch the same shows and see multiple messages. OTT ads utilize the same sophisticated targeting methods used in social media campaigns. Exact targeting removes waste and helps guarantee the relevance that attracts engagement. You can also speak straight to your customers. Further, OTT platforms offer real-time metrics. If a certain campaign is not working, you can easily change it.

When a broadcast TV, it was challenging to control the frequency and reach of ads. Other viewers suffer from ad fatigue after watching the same ad a dozen times. Some would never see the ad at all. You see, OTT affords you better efficiency and enables you to control who views your ad and when.

What are the best practices for OTT advertising?

Take note that those popular 18 to 49-year-old demographic are not watching TV nearly as much as previous generations. But if they do, they utilize OTT. If you wish to reach your target audience, you should meet them where they are.

Undoubtedly, OTT platforms are the best advertising medium. Here are tips to help you get started and maximize your OTT ad campaigns.

●    Be relevant

Ensure you get to know your audience before making your OTT advertisements. It should speak directly to your audience, offering a bespoke experience that establishes confidence and trust in your products and services.

●    Formal for all devices

Do not think that your content will be watched on a big TV screen. Ensure that your format works on every device. Most people use mobile phones and even tablets to view content.

●    Shorter is better

A 60-second TV commercial used to be the norm. These days, that minute-long ad seems forever. Always keep your ads short and to the point. Your business will surely benefit if you deliver value and respect the viewer's time.

A 30-second ad is okay, but fifteen seconds could be much better. Of course, try to experiment and determine the sweet spot for your target audience.

●    Pursue a niche

Standard TV advertising caters to a wider audience. One size does not fit at all. With OTT advertising, you can pursue a niche tactic at a granular level, according to demographics and viewing patterns.

Viewership might be smaller, but your ad budget will reach more of your target audience. That enables you to extend your ad budget to target people who are more interested in your services or products.

●    Diversity

Don't pull your eggs into the OTT basket. Indeed, OTT is amazing, but you need more. Standard marketing isn't dead. Identify how OTT fits into your marketing campaign and continue to use and test other channels.

●    Utilize integrated strategies

OTT platforms like AVOD platforms and SVOD platforms must be part of an integrated and comprehensive strategy. Viewers utilize numerous screens. Meaning you'd like to display your ad on different devices.

It's simpler to establish brand awareness from a series of touchpoints. Apart from paid advertising, your marketing tactics must involve your social media, blog and website. Utilize lessons learned in OTT advertising to your other digital channels, too and vice versa.

Final Thoughts

Overall, OTT advertisements offer bespoke content based on every viewer's interest, psychographics, demographics and more. You'd like to integrate OTT ads as part of your overall marketing strategy.

Video streaming platforms will continue to rule over the "air" waves. It is the ideal time for advertisers to take advantage of OTT versus TV advertising. You will surely benefit from targeting your audience. 

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