OTT Ads Consume More of the Marketing Budget

OTTADS

A new study from Advertiser Perceptions and Premion has shown that most advertisers are buying connected TV and OTT to increase their spending on streaming by an average of 22%. If your clients haven’t started using connected and OTT advertising, there’s no time to waste.

OTT Ads

25% of survey respondents called CTV and OTT ads the most important or valuable media type in 2021. While other forms of media have been more popular in the past, CTV/​OTT ads have become the most effective in giving advertisers the ability to precisely target audiences and increase sales according to nearly 70% of survey respondents. 84% of respondents also said that CTV/​OTT inventory is at least as valuable as primetime TV.

Other key benefits include:

  • Capturing declining TV audiences
  • Expanding the reach of linear TV ad campaigns
  • Reaching a highly engaged, opt-​in audience

While CTV/​OTT ads are most beneficial compared to other forms of TV advertising, advertisers recognize unique challenges of using CTV and OTT. These include getting transparency in terms of where ads were running, managing the frequency across publishers and platforms, cost, fragmentation, and inconsistent measurement standards. Nevertheless, these forms of advertising have become crucial to TV advertising, and the benefits outweigh these challenges.

How to Expand Reach with OTT

Laura Molen, president of advertising sales and partnerships at NBCU, said that approximately 40% of the company’s upfront deals were done based on something other than the traditional age and gender guarantees. She claims that we are already in a multi-​currency future as other media companies search for alternatives in the increasingly complex media environment.

NBCUniversal also says that 30%-40% of TV ad campaign impressions should come from OTT streaming in order to optimize results, according to its recent test with advertisers. NBCU found that advertisers fell into four categories when considering how they used streaming media and OTT:

  • Beginners with less than 10% of their impressions in OTT
  • Experimenters with 10–20% in OTT
  • Adventurers with 20–30% in OTT
  • Pioneers with 30% or more in OTT

The test was conducted with 67 advertisers and iSpot and found that brands with a richer OTT mix did better and had a higher overall reach with acceptable frequency levels, according to Kelly Abcarian, executive VP of measurement and impact at NBCU.

Abcarian claims that there are two reasons brands aren’t buying as much OTT as they should. First, current measurement systems don’t unify linear and OTT at scale. Second, advertisers don’t have confidence that adding OTT won’t just increase frequency. She says that NBCU and iSpot’s test proved how they can do just that and deliver on the promise of helping advertisers find audiences they can’t reach with linear.

Finding the Right Media Mix

She also notes that not all clients need the same level of OTT investment, yet all should be investing in OTT in some amount in order to reap the colossal benefits. Advertisers trying to reach younger audiences should be investing more in OTT, while those marketing to older audiences won’t need the same level of investment.

Sean Muller, CEO of iSpot, reviewed a case study involving a large retailer which started out with a very low level of OTT spending. He found that when it increased OTT impressions to 7% of its ad mix, additional reach was generated while frequency stayed low, meaning there were lighter linear viewers. Muller compared this brand to a pioneer brand, which ran 38% fewer impressions, but because its OTT mix was at 33%, its reach was higher, and frequency was 66% lower than the large retailer.

While not all clients need the same level of OTT investment, the benefits of having some level of OTT outweigh any challenges or difficulties presented by CTV/​OTT. Your clients should be investing in OTT ads to optimize reach while keeping frequency low. Use AudienceScan by AdMall at SalesFuel to learn which audiences are most likely to take action as a result of seeing an OTT ad.

Maddie Schamer

Maddie Schamer

Maddie is a Marketing and Research Intern at SalesFuel. She specializes in updating local account intelligence reports. Maddie also helps the team with their writing and research needs and will complete her bachelor’s degree in English from the University of Dayton in May 2023.
Maddie Schamer

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