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OTT Advertising: Why Small and Medium-Sized Businesses Must Seize the Opportunity in 2024

The world of advertising is undergoing a seismic shift as consumers increasingly cut the cord and embrace over-the-top (OTT) streaming services. With the OTT market expected to surpass $476 billion by 2027, small and medium-sized businesses (SMBs) must adapt their advertising strategies to reach audiences where they spend the most time: on streaming platforms.

Main streaming channels and game channels for OTT advertising
Main streaming channels and game channels for OTT advertising

In this post, we'll explore the latest OTT advertising trends, dive into compelling statistics, and uncover why SMBs should leverage this powerful marketing channel to drive growth and stay competitive in 2024 and beyond.

The Explosive Growth of OTT

The OTT market is experiencing unprecedented growth, with revenue projected to reach staggering heights in the coming years:

  • OTT video advertising is expected to reach $119 billion in revenue in 2023.

  • The average revenue per user for OTT video advertising is expected to reach $52.25 by 2025.

As more consumers shift from traditional TV to streaming, SMBs have a unique opportunity to reach these audiences through targeted, cost-effective OTT advertising campaigns.The Power of OTT Advertising

OTT advertising offers numerous benefits for SMBs looking to engage audiences and drive measurable results:

  • 207% is how much programmatic ad impressions increased on connected TVs in the U.S. in 2021.

  • 72% of OTT viewers can remember a specific ad they saw while watching content.

  • OTT ads have a 98% completion rate, compared to 84% for traditional TV ads.

  • 71% of OTT viewers prefer ads that are relevant to their interests.

  • OTT ads drive a 32% higher brand favorability compared to traditional TV ads.

By leveraging the precision targeting, interactivity, and measurement capabilities of OTT advertising, SMBs can effectively reach their ideal customers and achieve their marketing goals.

Understanding the OTT Advertising Landscape

To succeed with OTT advertising, SMBs must navigate the complex landscape of streaming platforms, ad formats, and pricing models:

  • Major OTT platforms include Netflix, Hulu, Amazon Prime Video, Disney+, and more.

  • Ad-supported video on demand (AVOD) services like Hulu and Peacock offer lower-priced or free tiers with ads.

  • Subscription video on demand (SVOD) services like Netflix and Disney+ are ad-free but require a monthly subscription.

  • Transactional video on demand (TVOD) services like iTunes and Google Play allow users to rent or purchase individual titles.

  • OTT ad formats include pre-roll, mid-roll, post-roll, interactive, and shoppable ads.

  • Pricing models for OTT ads include cost per thousand (CPM), cost per completed view (CPCV), and cost per acquisition (CPA).

By understanding the nuances of the OTT advertising landscape, SMBs can develop targeted strategies that align with their budget, audience, and objectives.

Seizing the OTT Advertising Opportunity

To capitalize on the rise of OTT advertising, SMBs should consider the following strategies:

  1. Define your target audience: Leverage OTT platforms' robust data and targeting capabilities to reach your ideal customers based on demographics, interests, and behaviors.

  2. Choose the right platforms: Select OTT platforms that align with your target audience's viewing habits and preferences. Consider factors like content genre, device usage, and ad formats.

  3. Develop engaging creative: Craft compelling video ads that capture attention, evoke emotion, and drive action. Experiment with different lengths, formats, and calls-to-action to optimize performance.

  4. Leverage interactivity: Take advantage of interactive ad formats like shoppable ads, QR codes, and click-to-website options to encourage viewer engagement and conversions.

  5. Measure and optimize: Use OTT platforms' measurement tools to track key metrics like completion rate, click-through rate, and conversion rate. Continuously test and refine your campaigns based on data insights.

By embracing these strategies, SMBs can effectively harness the power of OTT advertising to reach new audiences, build brand awareness, and drive business growth.The Future of OTT Advertising

As the OTT market continues to evolve, SMBs must stay ahead of the curve by adapting to emerging trends and technologies:

  • The rise of ad-supported streaming: More platforms are expected to launch ad-supported tiers to capture price-sensitive audiences and diversify revenue streams.

  • The growth of connected TV (CTV) advertising: CTV ad spend is projected to reach $27.47 billion by 2025, presenting a significant opportunity for SMBs to reach audiences on the big screen.

  • The advent of programmatic OTT buying: Programmatic platforms are making it easier for SMBs to automate and optimize their OTT ad campaigns at scale.

  • The emergence of new ad formats: Innovations like pause ads, choice-based ads, and gamified ads are creating new ways for SMBs to engage viewers and stand out from the competition.

By staying attuned to these trends and embracing innovation, SMBs can position themselves for success in the rapidly evolving world of OTT advertising.

The rise of OTT advertising presents a game-changing opportunity for small and medium-sized businesses to reach cord-cutters, engage audiences, and drive growth. With its precise targeting, measurable results, and cost-effective pricing, OTT advertising offers a powerful tool for SMBs to level the playing field and compete with larger brands.

By understanding the OTT landscape, developing targeted strategies, and staying ahead of emerging trends, SMBs can seize the moment and harness the full potential of OTT advertising in 2024 and beyond. Don't let this opportunity pass you by – start exploring how OTT advertising can help your business thrive in the streaming age.


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