OTT Advertising vs. Traditional TV Advertising

by | Jul 8, 2022 | Advertising

The global pandemic accelerated many transformational behaviors across the world. Technology drove the most dramatic changes to our daily lives and impacted where and how we work, shop, and consume media. The digital transformation of the TV industry has completely changed the way viewers receive and consume “television” content. As viewers around the globe shifted to “OTT,” the television advertising industry was transformed seemingly overnight.

OTT vs. Traditional Television
Traditional Television includes a collection of channels, each of which maintains a daily schedule of programming, that is delivered via a cable or satellite receiver. The advertising industry identifies shows that over-index with their target audience and places commercials on the channels or in the programs that will most likely enable the advertiser to reach their target customers. OTT is an industry term that refers to television content that is streamed “Over the Top” of traditional cable or satellite boxes directly to viewers via 100’s of Streaming Apps. Shows can be viewed via pre-set schedules reminiscent of Traditional Television or distributed On-demand for viewers at any time.

TV Advertising Impact
Over 80% of US homes now stream television content and the aggregate volume of streamed content via OTT surpassed Traditional Television concept for the first time in 2021. The viewer and advertiser have been presented with autonomy and control that doesn’t exist in the Traditional Television industry. The near universal adoption has enabled advertisers to leverage the power of television advertising with the precision of digital marketing.

The benefits of OTT Advertising include:

Precision Targeting – The digital nature of OTT frees the advertiser to serve commercials exclusively to an audience they select. Audiences can be segmented by age, income, employment, consumer habits, purchasing intentions and tens of thousands of different audience data points. As a result, advertisers serve commercials only to the intended audience without paying for the impressions served to people outside of their intended audience target.

Custom Geofencing – Advertisers do not have to buy at a DMA level or piece together a patchwork of cable and television providers to cover an entire market. The advertiser picks their campaign geography they want down to the zip code.

Remarketing – Remarketing Pixels can be placed on your website that allow you to retarget prospective customers that have visited your website with commercials to move them through the purchasing cycle.

Non-skippable – OTT ads are non-skippable commercials. Industry estimates suggest that 50% of Traditional TV Commercials are skipped via DVR or Channel Surfing.

In conclusion, television viewers are continuing the wholesale migration away from Traditional TV to OTT. Viewers from every demographic are enjoying the liberation of watching what they want, when and where they want it. The advertising world is quickly adapting to the new-found empowerment presented by this digital transformation. Advertisers are free to pick their audience, pick their geography, and serve personally relevant non-skippable commercials at their budget of their choosing.

The digital transformation of the television industry has democratized the way viewers consume television and empowered the Advertising Industry to drive better results and efficiency for their clients.

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