Debunking 4 Big Myths of OTT Advertising

Amrita Hemdev
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By Amrita Hemdev
March 21, 2019
The large TV screen in the living room will always be a powerful means for advertisers and marketers to reach audiences, but the delivery mechanism for how content is consumed on that large screen has changed significantly.

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In the era of anytime, anywhere content consumption, viewers are now consuming content over-the-top (OTT) in greater numbers than ever before. The growth of cord-cutters and cord-nevers has led to a decline in the number of viewers watching linear (or traditional) cable TV. And new platforms delivering high-quality OTT video are increasing each year.

However, as OTT video streaming settles into its position as a familiar mainstream channel for advertisers and marketers, there are a few myths about OTT that need to be debunked.

 

Myth 1: OTT ads require cable subscriptions.

OTT content is delivered via an internet connection and not through a traditional cable/broadcast provider. It goes “over” a cable box to give viewers access to TV content. In other words, using OTT services, users don’t need to pay for a cable television subscription to access video content.

The content that comes from an OTT content provider, like Sling TV, Roku Channel, or Pluto TV, is streamed and bypasses traditional distribution. The primary adopters of OTT video are cord-cutters (people who have stopped their cable subscriptions) and cord-nevers (people who have never subscribed to cable).

Advertising on OTT helps you reach your audiences who no longer have any cable subscriptions.

 

Myth 2: Connected TV and OTT are the same things.

OTT video content is streamed through the internet on a connected TV (CTV), laptop, mobile device, or tablet.

CTV refers to a television device that has a built-in connection to the internet or a television that is paired with a device that is connected to the internet, like an Apple TV or a Roku.

OTT content is often delivered through CTV, although it can also be accessed from connected mobile devices and computers.
Simply put, OTT is a delivery mechanism for video content, and CTV is a type of device that displays OTT content to viewers. For more on the differences between OTT and CTV, read here.

 

Myth 3: Consumers don’t like to watch ads.

In December 2018, Roku reported that its users spent an average of 2.8 hours daily watching video through its platform and that “free” was the most commonly searched term, indicating a preference for ad-supported content.

Today OTT viewers don’t mind getting advertising if they can view free content. Watching ads on OTT is becoming a natural part of daily viewing habits for many. In the U.S., viewers are willing to trade their time and attention by watching ads in exchange for free content.

A recent IAB study uncovered some interesting statistics about people who watch ad-supported video streamed via OTT. The most interesting finding was that this audience is affluent (a household income of $75K+) and ready for OTT video streaming (45% say they regularly watch ad-supported content).

 

Myth 4: Only Millennials consume OTT content.

It’s true that Millennials were among the first to cut the cord and embrace OTT. But now, thanks to the increased ease of access, all generations are welcoming OTT into their homes, especially Gen Z and Gen X. Digital video advertisers are turning to CTV and OTT to extend their audience reach even further in the digital realm.

 

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According to data by Nielsen, in 2011, 18- to 24-year-old Americans were watching 26 hours, 28 minutes of TV per week. Now, in 2017, they're watching just 14 hours, 31 minutes—a 40% drop. The cord-cutter audience is very desirable for many brands. The appeal comes from balanced demographics and above-average household incomes and education levels.

 

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OTT advertising is a valuable part of this new, emerging TV and video advertising landscape. OTT video ads provide an emotional connection with your audience while fully engaging them. As consumers increasingly replace their cable boxes with streaming boxes for a content fix, it’s critical for service providers to be able to target, manage, and run OTT ads.

We suggest media companies looking for local OTT advertising solutions seek out ad tech providers that have the right expertise and technology with the ability to serve ads to their local audiences.


By adopting OTT into your media mix, you have the power to better segment the market, build your user base, reach a new set of customers, and offer them a more diverse experience than ever before.

ZypMedia specializes in local OTT digital video advertising. We can help you and your organization place OTT ads in front of local audiences while helping you drive sales and generate a positive ROI.

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Amrita Hemdev

Amrita is an inbound marketer. She studied marketing and project management at UC Berkeley and proceeded to work in a fast-paced, digital advertising tech startup, with a goal of increasing brand awareness. She is currently the Content Marketing Specialist at ZypMedia. Passionate about digital marketing and having five years of experience in this field, she also started her digital marketing and creative agency, Sociato, based in India.
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