
Did you know that 3.9 billion people have access to at least one streaming service? Platforms like Netflix, Hulu and Amazon Prime are brilliant ways to watch our favorite TV shows and movies on the go.
If your target audience watches streaming services, you can use this to your advantage with over-the-top, or OTT, advertising.
You might think that OTT advertising is only an option for large businesses. However, small and midsize businesses (SMBs) can also use it to reach new, captive audiences.
But what is OTT in advertising? In this article, I’ll explain the different types of ads, the benefits of using OTT, and how to create highly targeted, engaging ads that your prospective customers won’t skip.
Key Takeaways
- OTT advertising is an ad campaign viewed on a streaming video service or device.
- OTT advertising is slightly different from connected TV (CTV) advertising. CTV ads are delivered on TVs and related devices, while OTT ads are delivered on TVs, computers, and smart devices.
- There are a range of generalist and niche OTT platforms to choose from, including Hulu, Netflix, Crunchyroll, and Shudder. You can also select different ad types, like in-video ads, banner ads, and shopping ads.
- OTT advertising isn’t as expensive as you think – the typical cost-per-mille (CPM) starts from $25. This means even small businesses can take advantage of it.
- Planning an OTT ad campaign is similar to a paid ad campaign. Understanding your target audience and knowing your goal is key to creating assets that stand out from the crowd.
Table of Contents
- Key Takeaways
- What Is OTT Advertising?
- How Does OTT Advertising Work?
- Benefits of OTT Advertising
- Best Practices to Keep in Mind
- FAQs
- Conclusion
What Is OTT Advertising?

OTT advertising is an advertisement delivered over a streaming video service or device. By device, I mean:
- Televisions.
- Streaming boxes and HDMI sticks.
- Gaming consoles.
- Computers.
- Laptops.
- Tablets.
- Mobile phones.
Think of OTT advertising as the modern version of advertising on satellite and cable channels.
Many brands across a range of industries have seen success with live streaming marketing, using it to increase brand awareness and boost sales.
For example, Quest Nutrition used a streaming TV ad campaign across Amazon’s Fire TV to promote user-generated content, leading to a 49 percent increase in product page views.

Types of OTT Ads
When people think of OTT advertising, they tend to think of video marketing. However, there are lots of different OTT ad types to consider.
- In-video ads. The most common type of OTT ad, these ads interrupt the viewing experience. They can be:
- Pre-roll. Ads that play before the main video starts.
- Mid-roll. Ads that play during the video.
- Post-roll. Ads that play after the main video ends.
- Banner ads. These appear at the top or bottom of the screen when people watch content.
- Overlay ads. Like banner ads, these appear at the top or bottom of the screen but are pop-ups rather than permanent ads.
- Companion ads. These ads appear on the left- or right-hand side of the screen.
- Shopping ads. This innovative ad type lets people shop for specific items, including those featured in the show or movie they’re viewing. For example, Walmart recently partnered with NBCUniversal and Roku to enable viewers to buy products featured in selected shows.

The right ad for you will depend on your goals and your budget.
OTT vs. Connected TV (CTV) vs. Video on Demand (VOD)
OTT is sometimes used interchangeably with connected TV (CTV) and video on demand (VOD). However, the terms are slightly different:
- OTT ads are available on a range of devices—phones, laptops, tablets, and TVs.
- CTV ads are delivered on internet-connected (or “smart”) TVs and devices.
- VOD ads are delivered on streaming services that offer video content like TV shows and movies. VOD content isn’t live, while OTT and CTV content can be.
So, CTV and VOD ads would be OTT ads, but an OTT ad wouldn’t necessarily be a CTV or VOD ad.

How Does OTT Advertising Work?

Planning and launching an OTT advertising campaign is a lot like managing any online paid advertising campaign. Here’s how to get started.
- Determine your goal. Before you build your campaign, identify your target audience and what goal you want to achieve. For example, do you want to improve brand awareness, promote your latest product or service, or increase revenue? This will help you make the right choices later.
- Decide your budget. Most OTT ad campaigns use a CPM pricing model, which means you pay for impressions rather than clicks. Some use cost per view (CPV) instead, which means you pay when someone views your ad for a certain length of time.
- Choose your platform. In addition to the heavy hitters like Netflix and Hulu, there are also more niche platforms available. For example, you might advertise on Crunchyroll if you want to target anime fans or Shudder if you want to showcase your brand to horror fans.
- Sign up. Signing up for an advertising account can be tricky on many platforms. You usually have to complete a form (as in the example above) or email your details to be accepted, so you need to plan ahead.
- Build your campaign. Choose the ad type you want to use and the demographic you want to target. Eye-catching videos and graphics are essential to get viewers’ attention.
- Tweak and optimize. Check your advertising account regularly (I recommend at least once a day for short-term campaigns) to see how your campaign is doing. You can then make small adjustments to improve your conversion rates.
- Review the results. Once your campaign ends, determine whether you achieved your initial goal. Remember that some people might not directly engage with your ad but might still check you out—so the analytics in your ad platform might not tell the whole story.

Benefits of OTT Advertising
- It’s cost-effective. OTT advertising isn’t as expensive as you might think, with the typical CPM varying between $25 and $75. A 30-second ad on a local network will cost between a few hundred and a few thousand dollars, while a similar ad on prime-time TV can cost upwards of $200,000. As you’re targeting a more specific audience, you reduce ad spend waste, too.
- You have a captive audience. Sixty-four percent of people would rather save money and watch ads than pay for the ad-free version of video-streaming apps. This means you have an audience of people willing to see your ads.
- There is a wide range of targeting options. With OTT advertising, you don’t just choose the platforms and programs you want to advertise on but the exact audience you want to advertise to. Case in point: Mondelēz used OTT advertising to promote its products to Indonesian women aged 25 to 45 during Ramadan, resulting in a 15 times higher click-through rate (CTR).
- There are a variety of ad formats. As well as video ads, you can use display ads and even interactive advertising methods like shopping ads.
- It’s data-driven. Platforms like Netflix invest serious resources in their data marketing. This means you can be confident your ads will appear in front of the people most likely to convert. Plus, you get detailed analytics so you can see how your campaigns do.
As a result, OTT advertising is extremely popular with marketers, with 52 percent increasing their spend in 2023.

Best Practices to Keep in Mind
Now that you know what OTT advertising is, what can you do to optimize your ads? Here are some of my expert tips.
- Carry out A/B testing. Run two different versions of your ad with a slight difference to see what resonates most with viewers.
- Consider programmatic advertising. If you don’t have the resources to manage your OTT campaigns, programmatic advertising can help. This technology buys advertising space on your behalf based on your requirements.
- Provide a clear call–to-action (CTA). What do you want viewers to do after they see your ad? Make it as easy as possible for them to take action. For example, you might include a QR code for them to scan.
- Use storytelling. The aim is to keep viewers watching until the end of your ad. Storytelling is a fantastic way to draw people in and keep them invested.
- Ensure your ad campaigns are consistent. Make sure all your digital ad campaigns have a unifying look and feel to build trust and raise brand awareness with customers.
FAQs
What Is the Difference Between OTT and CTV Advertising?
The two terms are similar, but there is a key difference. OTT ads are served across various devices, including TVs, smartphones, and laptops. CTV ads are served on TVs and related smart devices (for example, a Fire Stick or Apple TV.)
What Is the Largest OTT Platform in the United States?
Netflix is currently the largest OTT platform in the U.S., with 44.2 percent of the market share. Next is Hulu (21.2 percent) and Max (10.6 percent)
Conclusion
OTT services are increasing in popularity all the time. By 2025, they’ll account for 54 percent of all video subscription revenue.
If you’re not using OTT in your digital marketing strategy, you could be missing a trick. The key is to understand your target customer and their pain points and create engaging ads that make them want to tune in.
If you want to get started with OTT ads but aren’t sure where to start, a digital marketing agency specializing in paid media can help. They will identify the right channels to advertise on, create campaigns that get you noticed, and analyze the data to see which adverts bring in the biggest return on investment.

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