OTT & CTV Strategy in 2020

January 17, 2020

Between traditional cable, the streaming giants, and newer online models, TV consumption trends are more complex than ever. But while it may seem daunting, this massive diversification of media outlets also represents an opportunity for digital marketers to more precisely target certain audiences, often at a lower cost than a cable advertisement.

Before you can take advantage of marketing on these platforms, it’s important to get a grasp on the various content models and how they differ in terms of reach and audience. The traditional cable model with weekly episodes and long blocks of advertising is now referred to as linear television or multi-channel video programming distribution (MVPD). In the past, this was the only way to advertise to television viewers.

Streaming services like Netflix, Hulu, or Disney+ differ in that they offer over-the-top content, or OTT. In this model, the viewer gains access to content without a cable contract. There are different models of OTT delivery, but many are ad-supported to some degree, providing an avenue of growth for savvy digital marketers. Oftentimes, OTT content is viewed on a connected TV (CTV), which is simply a TV with internet access, whether built-in or added via a gaming console or streaming device. Although OTT can also be viewed on computers or smartphones, there’s a growing trend among cable-cutters of consuming OTT media on a CTV to balance convenience, affordability, and viewing quality.

So what does the dramatic rise of OTT mean for digital marketing? As with all marketing trends, it depends largely on your target audience. Before you can decide how to best allocate a TV advertising budget, it’s essential to do some legwork to determine how your audience is likely to consume content. If your product caters mainly to millennials or younger viewers, you’re in an ideal position to invest more fully in OTT ads. On the other end of the spectrum are companies targeting older viewers, who may be more reluctant to abandon cable. These companies might do better to take advantage of the falling prices of cable advertisements. Sports-related companies might find themselves in a similar position.

Most companies with a TV budget will find themselves somewhere in the middle with their audience using cable for some programs but also relying on Hulu or similar ad-supported CTV services for others. A hybrid strategy can be more challenging, but it also promises to be more rewarding. These guidelines can help apportion your advertising budget for 2020 and beyond:

  • Data is king. With so many venues for advertisements, it’s surprisingly easy to sink money into a campaign that won’t see sufficient return. Carefully consider data from past TV campaigns alongside public statistics as you strategize. In doing so, you’ll be able to identify the most promising streaming services and cable networks for your ads. Although the tides are changing, it’s a bad idea to completely abandon ship when you already have an idea of what works with your audience. If that includes cable ads, then proceed with caution and reassess as necessary.
  • But also make informed predictions. As crucial as viewership statistics can be, there are some situations that simply require some guesswork. For instance, Disney+ is poised to throw a massive wrench into the 2020 OTT market, and early data, which is skewed by promotional discounts, might not be sufficient to predict whether consumers will migrate from other services to cut costs. On a smaller scale, contracts are constantly in flux, moving popular programs from one streaming site to another. These sorts of changes are important to track to ensure you’re putting money where your audience actually is.

At Excelerate Digital, we can help you weigh all of these factors and others to ensure that your advertising budget is well-spent. To learn more about our services, give us a call at 866-530-2729.