Why It’s Time To Jump To OTT Advertising

The way people watch and consume TV has changed. Gone are the days of Must See TV, when the family gathered around the glow of the television during prime time to see the latest hit TV show broadcast at a specific day and time each week.

Today, more people are cutting the cord (ditching broadcast and satellite TV) in favor of content that they can watch on demand and binge. Platforms like Netflix, Hulu, and Paramount+ have become the destination for many Americans looking for entertainment.

While that may seem detrimental for businesses relying on linear TV advertising, it provides an opportunity for more targeted advertising (and ROI) with streaming services. OTT/CTV is rapidly growing, has unparalleled reach, provides better opportunities for storytelling, offers better targeting, and is less cost-prohibitive than broadcast TV.

Let’s take a deeper look into why now is the right time to jump from linear TV to OTT/CTV.

OTT/CTV IS GROWING FAST

The shift from traditional TV to streaming has become much more obvious in recent years. In the first quarter of 2023, cable, satellite, and Internet TV providers lost 2.3 million customers, the biggest loss of viewership to that point.

Those viewers are flocking to streaming in droves. According to eMarketer, there were 184.8 million ad-supported streaming viewers in the United States in 2024, that number is expected to grow to 207.7 million by 2028 — that’s well over half the population!

In fact, we’ve officially reached the tipping point: more people are watching streaming TV than broadcast TV. In April of last year, 38.4% of people watched streaming services, and 22.2% and 29.1% watched broadcast and cable respectively, according to Nielsen.

Consumers have been increasingly embracing ad-supported streaming services for their entertainment, but advertisers have been slow to catch up — only 25% of marketers are currently using CTV ads, according to tvScientific. That creates a huge growth opportunity for companies looking to reach untapped (and highly targeted) audiences.

OTT/CTV CAN TELL YOUR BRAND’S STORY BETTER

Video is the best medium for telling your brand’s story — it’s visual, emotional, and immersive.

While linear TV can also take advantage of the visual medium for storytelling, it lacks the engagement of OTT/CTV. A viewer often passively flips through channels and avoids commercials on traditional TV. But ads are unskippable on many OTT platforms, including CTV.

In addition, streaming audiences are often more engaged than linear TV audiences and more willing to watch a CTV ad. That creates a great opportunity for brands to get their ads in front of a large, growing, captive audience who is most likely to watch their ad to the end. That’s a win-win!

TARGET THE AUDIENCES WHO ARE INTERESTED IN YOU

Unsurprisingly, broadcast TV is pretty broad. The person you’re advertising to during the morning news may be the same person watching reruns of The Big Bang Theory, and they’re not interested in lawn and garden equipment!

That lack of precise audience target is exactly what OTT/CTV excels at! Because it uses data such as demographics, interest, location, and behaviors, OTT/CTV offers significantly better target options for brands.

Instead of relying on woefully inaccurate, broad estimates of viewers, a brand can target exactly the kind of person who is most likely interested in the products and services and advertise directly to them. If ads aren’t performing well, you can always swap them out on the fly and find something that works better. That results in lower ad spend and increased conversions. In short, increased ROI!

EXPAND YOUR REACH

On the surface broadcast TV sounds like it reaches a lot of people, and in some ways it does. But the reality is that an audience’s exposure to your brand’s ad is restricted to a single channel or network with further restrictions on timing.

Like the example in the previous section, you may be reaching a narrow audience who may not be interested in you. That restriction is removed with OTT/CTV. Your ads don’t just appear on a single channel or network — they will be played to the most relevant consumers in your target audience, no matter what or when they are watching.

Streaming your ad across multiple channels isn’t just great for reaching a larger audience, it helps with brand recall, too. Your ad can follow your audience along the consumer journey wherever they are consuming content, whether it’s on a smart TV, mobile device, tablet, or computer.

With more consumers watching streaming TV than broadcast TV, it’s the perfect time to make the jump from advertising on linear TV to streaming services using OTT/CTV. With advanced targeting, expanded reach, and better storytelling capabilities, your brand can better connect, engage with audience, and see higher ROI when you start advertising with OTT/CTV.

If you’re ready to make the transition, our team at Federated Digital Solutions can help! Let us build an OTT/CTV strategy for you so you can start putting your video budget to better use today.

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