OTT advertising explained: How over-the-top media is changing digital marketing

The shift from cable boxes to streaming apps has created one of the most significant opportunities in digital marketing. OTT advertising now commands a projected $207.52bn in global ad spending for 2025, and that figure continues to climb as viewers abandon traditional television for on-demand content.

But what exactly makes OTT advertising different from simply running video ads online? The answer lies in how viewers consume content and how advertisers can reach them. When someone watches their favorite series on Amazon Prime Video or catches up on news through Roku, they're experiencing content in a focused, intentional way. They've chosen what to watch and when to watch it. This creates an environment where ads become part of a premium viewing experience rather than an interruption.

For marketers accustomed to broad demographic targeting on traditional TV, OTT offers something radically different: the ability to serve ads based on specific viewer behaviors, interests, and even past purchases. You can target parents who stream educational content, sports fans who never miss a game, or cooking enthusiasts who binge culinary shows. The precision goes beyond basic demographics to actual viewing habits and preferences.

This guide breaks down everything marketers need to know about OTT advertising. You'll learn how it works, where ads appear, what formats perform best, and how to build campaigns that connect with streaming audiences. We’ll also tackle real-world hurdles like measurement complexities and platform fragmentation, so you get the full, unfiltered picture.

By the end, you’ll know exactly why U.S. brands poured over $10 billion into OTT ads in just eight months of 2024 and how your brand can win in this booming space.

We've had 80 years of linear TV, and it's been amazing, and in its day the fax machine was amazing. The next 20 years will be this transformation from linear TV to Internet TV. — Reed Hastings, Co-founder and Executive Chairman of Netflix

What is OTT advertising?

OTT advertising refers to video ads delivered through streaming services that bypass traditional cable or satellite television providers. The term "over-the-top" comes from the technology itself: these services go "over the top" of existing internet infrastructure to deliver content directly to viewers.

Think of any streaming service you use. Netflix, Hulu, Disney+, Amazon Prime Video, Roku, Pluto TV, and even YouTube TV all qualify as OTT platforms. When you see an ad while streaming content on these services, you're experiencing OTT advertising in action.

The key distinction lies in the delivery method. Traditional TV advertising relies on scheduled programming through cable or broadcast networks. OTT advertising reaches viewers through internet-connected devices as they stream on-demand or live content. This fundamental difference changes everything about how ads can be targeted, measured, and optimized.

Here's what makes OTT advertising unique:

• Precise audience data: Unlike traditional TV's broad demographic estimates, OTT platforms know exactly who's watching based on account information and viewing behavior
• Device flexibility: Ads reach viewers whether they're watching on a smart TV, tablet, smartphone, or laptop
• Programmatic capabilities: Many OTT ads can be bought and placed automatically through sophisticated bidding systems
• Detailed performance metrics: Advertisers can track completion rates, engagement, and even downstream actions like website visits

For advertisers, this means moving from hoping the right people see your commercial to knowing exactly who watched it, for how long, and what they did next.

OTT vs CTV vs VOD: What’s the difference?

The streaming advertising world loves its acronyms, and three terms often get mixed up: OTT, CTV, and VOD. While they overlap, understanding their distinctions helps you plan more effective campaigns:

• OTT (Over-the-Top) is the umbrella term for all streaming content delivered via the internet. It encompasses everything from Netflix on your phone to Peacock on your smart TV. OTT describes the delivery method, not the device or content type.
• CTV (Connected TV) specifically refers to television sets connected to the internet. This includes smart TVs with built-in streaming capabilities and traditional TVs connected through devices like Roku, Apple TV, or Amazon Fire Stick. All CTV is OTT, but not all OTT is CTV. When you watch Hulu on your Samsung Smart TV, that's both OTT and CTV. When you watch the same show on your phone, it's OTT but not CTV.

• VOD (Video on Demand) describes content you can watch whenever you want, rather than at a scheduled broadcast time. Most OTT content is VOD, but live streaming events on OTT platforms aren't. VOD comes in several flavors:
  
  • SVOD (Subscription VOD): Netflix, Disney+, HBO Max
  • AVOD (Advertising VOD): Pluto TV, Tubi, the ad-supported tiers of Hulu and Peacock
  • TVOD (Transactional VOD): Renting or buying movies on Amazon Prime Video or Apple TV+

These distinctions matter for your advertising strategy. CTV digital advertising typically commands premium rates due to the large-screen, living room experience. Mobile OTT might offer lower costs but different engagement patterns. Understanding where your ads will appear helps you craft appropriate creative and set realistic performance expectations.

💡 For a deeper dive into how these platforms compare, check out our guide on OTT vs CTV: Key Differences, Similarities, and What They Mean for Your Marketing Strategy in 2025.

Who should use OTT advertising?

Not every brand needs OTT advertising, but the list of those who should consider it grows longer each year. 

With 39% of advertisers citing precision audience targeting as a top benefit, OTT particularly suits brands that know their audience well and want to reach them efficiently.

• E-commerce and direct-to-consumer brands: OTT is tailor-made for brands that thrive on measurable results. Fashion retailers, meal kits, subscription boxes — you can target shoppers based on interests and behaviors, then track the entire journey from ad view to website visit to purchase. 
• Local and regional businesses. OTT levels the playing field for local marketers. Want to reach households in specific zip codes, or fitness fans within driving distance? Forget blunt DMA targeting — OTT combines location and interest data for lean, powerful campaigns that minimize wasted impressions.
• B2B companies. Streaming isn’t just for consumer brands. B2B marketers are using OTT to put their message in front of decision-makers at home — targeting by job title, company size, or industry. The premium streaming environment builds credibility when your prospects are tuned in and receptive.‍
• Brands launching new products. OTT is perfect for finding early adopters. A plant-based food startup can zero in on cooking show fans who shop at natural grocers. Tech brands can connect with gadget enthusiasts streaming sci-fi. OTT helps new products get noticed, by the right people, fast.

However, some businesses might want to proceed cautiously:

• Very small local businesses with limited budgets might find the minimum spends challenging
• Brands requiring immediate response (like pizza delivery) might prefer platforms with clickable ads
• Companies without video assets will need to invest in creative before starting

The sweet spot? Brands with clear target audiences, video creative (or budget to create it), and patience to optimize campaigns over time. If you can define who you want to reach and what action you want them to take, OTT advertising likely makes sense for your marketing mix.

Where OTT ads appear

Understanding where your OTT ads will actually show up helps set realistic expectations and craft appropriate creative. Unlike traditional TV's predictable commercial breaks, OTT advertising appears across a diverse ecosystem of platforms and devices, each with its own viewer behaviors and technical capabilities.

Your ad could roll before a hit series on Hulu, during live sports on Peacock, or between movies on Tubi. The same campaign might reach someone on a massive living room TV or on their phone during the morning commute. This flexibility brings both opportunities and complexities that every advertiser needs to understand.

Major OTT platforms

The OTT platform landscape divides into several categories, each offering different advantages for advertisers:

• Premium subscription services with ad tiers: Hulu, Netflix, Disney+, Max offer massive audiences, premium content, and new ad opportunities.
• Free ad-supported streaming television (FAST) services: Pluto TV, Tubi, Amazon Freevee, The Roku Channel offer broad reach, big libraries, and are free for viewers.
• Broadcaster-owned platforms like Peacock and Paramount+ let advertisers easily run campaigns across both traditional TV and streaming.
• Live TV streaming services: YouTube TV, Hulu + Live TV, Sling TV offer internet-based live TV, which is popular for sports/news.‍
• Device-specific platforms: Roku, Samsung TV Plus are built into TVs/devices, offering unique ad spots as viewers browse.

Common devices for streaming OTT content

The device someone uses for streaming affects how they interact with ads and what formats work best. Each device category brings unique considerations:

• Smart TVs dominate streaming hours, with Samsung, LG, and Vizio offering the traditional "lean-back" viewing experience. Ads here command attention in living room settings, closely mimicking traditional TV commercials.
• Streaming devices like Roku, Amazon Fire TV, Apple TV, and Google Chromecast turn regular TVs smart. These platforms offer additional advertising opportunities through their interfaces, especially as Microsoft's Xandr sunset shifts focus to device manufacturers' own ad platforms.
• Gaming consoles like PlayStation and Xbox double as streaming devices, particularly for younger audiences who skip traditional TV entirely.
• Mobile devices capture significant streaming time, especially among younger viewers during daytime. Despite smaller screens, mobile viewing often occurs in focused moments prime for immediate actions like website visits or app downloads.‍
• Computers and laptops enable both personal viewing and background entertainment. Desktop viewers are typically already online and primed to engage with digital experiences beyond the ad.

Knowing which devices your audience uses lets you fine-tune your creative and targeting. If your campaign skews toward smart TVs, lean into bold, cinematic visuals. For mobile-heavy campaigns, sharpen your direct response tactics for quick, thumb-stopping engagement.

Types of OTT ad formats

OTT advertising offers more format variety than traditional TV's standard 15, 30, and 60-second spots. Each format serves different objectives and fits different content experiences. Choosing the right mix can significantly impact campaign performance.

Pre-roll, mid-roll, post-roll ads

These standard video placements mirror traditional TV commercials but with streaming's targeting precision:

• Pre-roll ads play before the selected content begins. They capture viewers at their most attentive, ready to watch their chosen show or movie. The advantage? You have their full attention. The downside? Viewers might feel frustrated if pre-rolls are too long or frequent. Most platforms limit pre-roll duration to 15-30 seconds to minimize abandonment.
• Mid-roll ads interrupt content at natural breaks, similar to traditional TV commercials. They typically achieve the highest completion rates since viewers are invested in finishing their content. Platforms carefully place mid-rolls at scene breaks or cliffhangers to minimize disruption. The challenge lies in creating ads compelling enough to hold attention when viewers just want to return to their show.
• Post-roll ads appear after content ends. While they have lower view rates as some viewers immediately exit, those who watch tend to be highly engaged. Post-rolls work well for related content promotion or when targeting binge-watchers likely to queue up the next episode.

Interactive ads

Interactive formats elevate viewer engagement beyond passive watching. These ads invite viewers to use their remote control, mouse, or touchscreen to engage with content.

Common interactive elements include:

• Polls and quizzes that personalize the experience
• Choose-your-own-adventure style branching videos
• Mini-games that entertain while conveying brand messages
• Clickable hotspots revealing product information

The advantage? Engagement rates can soar compared to standard video ads. Viewers who interact spend more time with your brand and show genuine interest. 

The challenge? Interactive ads require more sophisticated creative development and don't work across all devices. A remote control offers different interaction possibilities than a touchscreen.

Pause ads

When viewers pause their content, pause ads appear as static images or subtle animations on screen. Hulu pioneered this format, and other platforms have followed.

Pause ads respect the viewing experience since they only appear when viewers have already interrupted their content. They work particularly well for brand awareness campaigns with simple, memorable imagery. The static nature means no sound and limited animation, forcing creative simplicity.

The downside? Some viewers find any advertising during pauses intrusive. Creative must work without sound and capture attention without being annoying.

Overlay banners

These display-style ads appear as semi-transparent banners at the bottom of the screen during content playback. They're less intrusive than video interruptions but still visible enough to drive awareness.

Overlay banners excel at:

• Promoting related content or upcoming shows
• Displaying offers without interrupting viewing
• Providing clickable elements for immediate action

The limitation? Small screen real estate means messages must be concise. On mobile devices, overlays can feel cramped. Some premium content providers avoid overlays to maintain a clean viewing experience.

Shoppable ads

The newest frontier in OTT advertising, shoppable ads let viewers purchase products directly from their screens. A viewer watching a cooking show might buy featured ingredients, or someone enjoying a fashion reality show could purchase showcased outfits.

These ads typically work through:

• QR codes viewers scan with their phones
• Click-to-text features sending product links via SMS
• Direct purchasing through connected TV platforms

The promise is compelling: collapse the funnel from awareness to purchase in one experience. 

The reality remains complex: Different platforms support different shopping technologies, and viewer behavior varies by device. Someone relaxing on their couch might not want to complete a purchase on their TV screen.

Early results show shoppable ads work best for considered purchases where viewers want more information, rather than impulse buys. The format continues evolving as platforms develop better commerce integration.

Why do brands choose OTT advertising?

The numbers tell a clear story about advertiser confidence in OTT. U.S. OTT advertising spending is projected to reach $112.7 billion by 2029, marking steady growth that shows no signs of slowing.

Brands aren’t dabbling—they’re shifting major video ad budgets to streaming. Why? OTT offers what traditional TV can’t: precise targeting, granular measurement, and all the power of digital marketing, combined with the reach and impact of TV. 

Precise audience targeting

Traditional TV advertising operates on broad demographic assumptions. You might buy spots during a cooking show hoping to reach food enthusiasts, but you're really just reaching whoever happens to be watching that channel at that time. OTT advertising turns the old model on its head.

As mentioned, 39% of advertisers cite precision audience targeting as a top benefit of CTV/OTT advertising, and for good reason. Streaming platforms collect extensive data about viewer preferences, creating targeting options that include:

• Behavioral targeting: Reach people based on what they actually watch, not just demographic profiles
• Interest categories: Target fitness enthusiasts, pet owners, or travel buffs based on their content consumption
• Custom audiences: Upload your customer lists to find them on streaming platforms
• Lookalike audiences: Find new viewers who resemble your best customers
• Sequential messaging: Show different ads to the same viewer over time, building a narrative

A concrete example makes this clear. A luxury car brand can target households with income over $150,000 who have watched automotive content in the past month and live within 25 miles of a dealership. Compare that to buying a spot during the evening news and hoping affluent viewers are watching.

This granular targeting minimizes wasted ad spend and ensures OTT digital marketing messages reach the most receptive audience. You're not paying to reach everyone, just the people most likely to become customers.

High engagement and completion rates

When someone chooses to stream a show, they're in a different mindset than channel surfers. This intentional viewing translates directly into advertising effectiveness. OTT ads achieve completion rates of 90% or more, with some studies showing rates between 93-95% on OTT devices.

These numbers dwarf other digital formats. Mobile video ads see completion rates of just 62%. The difference? OTT ads are often non-skippable, and viewers are watching on larger screens in comfortable settings, not scrolling past ads on social feeds.

High completion rates mean more than just views. 

A 2023 study found ads on premium OTT platforms led to 10% higher product recall and 12% higher brand recall compared to mass streaming services. 

When viewers watch your entire message in a premium content environment, it sticks.

Several factors drive this engagement:

• Fewer ads per break: Most streaming services show fewer ads than traditional TV
• Premium content environment: Viewers associate your brand with quality programming
• Forced completion: Non-skippable formats ensure message delivery
• Optimal viewing conditions: Large screens and focused attention amplify impact

Cross-device reach

Modern viewers don't stick to one screen. They might start watching a show on their phone during lunch, continue on their tablet during the commute home, and finish on their smart TV after dinner. OTT advertising follows them across this journey.

Cross-device targeting and attribution capabilities let marketers create cohesive brand narratives. A viewer who sees your awareness ad on their connected TV can receive a follow-up ad with a special offer on their smartphone the next day. This orchestrated approach builds frequency without annoyance.

PepsiCo nailed the smart sequencing, achieving 100% of its reach goal—over 12 million unique users—through a cross-device strategy targeting cord-cutters. 

They reached the same viewers across multiple touchpoints, reinforcing their message without waste.

Cross-device capabilities enable:

• Retargeting across screens: Follow up TV exposure with mobile ads
• Frequency capping: Control how often individuals see your ads across all devices
• Sequential storytelling: Tell different parts of your brand story on different devices
• Attribution tracking: Connect TV ad exposure to mobile app downloads or website visits

Cost efficiency with programmatic buying

Programmatic advertising has brought stock market-style efficiency to OTT. Instead of negotiating individual deals with each platform, advertisers can buy inventory across multiple services through automated platforms. 

Programmatic ad spending is projected to grow fastest on Connected TV, accounting for 24% of the total digital ad spend for campaigns and committees in 2024.

The cost advantages are substantial. OTT CPMs typically range from $25-40, while traditional TV can cost $40-200 or more. But the real efficiency comes from targeting precision. Why pay to reach a million households when you can reach the 100,000 who actually match your customer profile?

A 2024 Association of National Advertisers study found programmatic advertising is becoming more efficient, with a higher percentage of every dollar spent reaching the consumer. This improvement comes from:

• Real-time bidding: Pay market rates, not rate card prices
• Audience-based buying: Purchase viewers, not time slots
• Dynamic optimization: Shift budget to best-performing placements automatically
• Reduced waste: Only pay for ads served to your target audience

Measurable results and attribution

Traditional TV advertising relies on panel-based estimates and correlation studies. Did sales increase because of your TV campaign or because of seasonality? OTT advertising provides definitive answers.

Marketers can track a comprehensive array of KPIs in real-time:

• Impressions and reach: Exactly how many people saw your ad
• Completion rates: The percentage who watched to the end
• Frequency: How often each household saw your message
• View-through attribution: Actions taken after ad exposure
• Brand lift studies: Measurable increases in awareness and consideration
• Return on ad spend (ROAS): Revenue directly attributable to your campaign

Advanced attribution models tie OTT ad exposure directly to results, like website visits or store traffic. For example, a furniture retailer can see if viewers who saw their ad later checked out their site or visited the showroom. This precision means you can optimize campaigns on the fly, not just after the fact.

Limitations & considerations of OTT advertising

Despite its advantages, OTT advertising presents real challenges that marketers must address. Understanding these limitations helps set realistic expectations and build stronger campaigns.

• Ad fraud remains a persistent concern. Studies indicate that as much as 18% of OTT ad inventory could be fraudulent, involving misrepresented viewership locations, single devices reporting unusually high ad counts, and apps with inflated activity. This fraud costs advertisers billions annually, making verification tools and trusted partners essential.
• Platform fragmentation complicates campaign management. Each streaming service has different ad formats, specifications, and audience data, forcing advertisers to juggle multiple relationships and reporting systems. The lack of standardization in metrics makes it difficult to compare performance across platforms or get a unified view of campaign effectiveness.
• Measurement challenges persist despite improvements. While OTT offers better attribution than traditional TV, accurately tracking user journeys across devices and platforms remains complex. View-through attribution without direct clicks makes it harder to prove direct response impact. Different providers use different methodologies, making apples-to-apples comparisons difficult.
• Limited ad inventory on premium platforms drives up competition and costs. While growing, the available ad space on streaming platforms is still smaller than traditional TV's vast commercial inventory. Popular shows on premium platforms can see CPMs spike as advertisers compete for limited spots.
• Creative requirements demand more resources. You need high-quality video assets that work across different aspect ratios and durations. Interactive and shoppable formats require even more sophisticated production. Brands without existing video assets face significant upfront investments.
• Frequency management across platforms proves tricky. Without careful coordination, the same viewer might see your ad too many times across different services, leading to annoyance rather than engagement. But solving this requires sophisticated frequency capping tools that work across the fragmented ecosystem.
• Privacy regulations add complexity. As the industry moves away from third-party cookies, first-party data becomes crucial for targeting and measurement. Advertisers must build direct relationships with platforms or invest in their own data collection while staying compliant with evolving privacy laws.

These challenges aren't insurmountable, but they require planning and expertise. Successful OTT advertisers invest in:

• Fraud detection and brand safety tools
• Unified campaign management platforms
• Clear measurement frameworks before launching
• High-quality creative assets in multiple formats
• Strong first-party data strategies
• Experienced partners who understand the ecosystem

How to build an effective OTT advertising strategy

Building a successful OTT advertising strategy requires more than transferring your TV commercial to streaming platforms. The medium's unique capabilities demand a thoughtful approach that leverages data, technology, and creative formats to connect with viewers in meaningful ways.

Setting clear campaign goals

Every OTT campaign needs specific, measurable objectives that align with your broader marketing strategy. The platform's capabilities support various goals, but clarity upfront determines everything from targeting to creative development.

• Brand awareness campaigns leverage OTT's broad reach and premium content environment. Success metrics include reach, frequency, and brand lift studies. A new beverage brand might aim to reach 5 million households in target markets with at least 3 exposures per household monthly.
• Lead generation efforts capitalizes on OTT's ability to drive viewers from couch to website. Track view-through conversions, form completions, and cost per lead. B2B software companies excel here, using compelling video to introduce complex solutions before viewers research further online.
• App install campaigns work particularly well given OTT's mobile viewing component. Measure install rates, cost per install, and downstream engagement. Gaming companies and subscription services succeed by targeting viewers of specific content genres who match their ideal user profiles.
• Direct sales objectives objectives require careful attribution modeling but deliver impressive returns. E-commerce brands track view-through purchases to average order values from exposed audiences. Studies show 21% of CTV viewers make purchases after seeing relevant ads, making this increasingly viable.

The key? Choose one primary goal and align everything else around it. A campaign trying to build awareness while driving immediate sales often achieves neither effectively.

Defining your target audience

OTT's targeting precision only matters if you know exactly who you want to reach. Start with basic demographics but quickly move beyond age and gender to behavioral and interest-based targeting that actually predicts purchase behavior.

• Demographics provide the foundation: Age ranges, household income, education levels, and family composition. But a "30-40 year old women" target misses the nuance OTT enables.
• Geographic targeting goes beyond DMAs to zip codes, cities, or custom radii around locations. Regional grocers can target households within 10 miles of stores; luxury brands can focus on specific affluent neighborhoods.
• Behavioral targeting reveals true intent. Target based on:
  
  • Content preferences (documentary watchers, reality TV fans, sports enthusiasts)
  • Shopping behaviors (online grocery buyers, luxury shoppers, deal seekers)
  • Life events (new movers, expectant parents, recent graduates)
  • Device usage patterns (prime-time viewers, binge watchers, mobile-first users)

• Interest categories align your brand with viewer passions. Camping gear companies target outdoor documentary viewers; meal kit services reach cooking show enthusiasts. This content-advertising alignment creates receptive moments.

Custom audiences let you upload CRM data to find existing customers on streaming platforms and create lookalike audiences sharing your best customers' characteristics. This first-party data strategy becomes increasingly important as privacy regulations evolve.

Platform and device selection

Not all OTT platforms serve the same audiences or offer identical capabilities. Strategic platform selection ensures your ads appear where your target audience actually spends time.

• Hulu attracts a younger, diverse audience with strong representation among 18-49 year olds. Its mix of current TV shows and originals draws engaged viewers who value staying current with popular culture. The platform's robust targeting options and variety of ad formats make it ideal for brands seeking broad reach with precision.
• Amazon Freevee (formerly IMDb TV) leverages Amazon's vast data ecosystem. You can target based on actual purchase behavior, making it powerful for e-commerce brands. The free nature attracts budget-conscious viewers across demographics.
• Pluto TV leads the FAST (Free Ad-Supported Television) category with an older-skewing audience that appreciates familiar content without subscription fees. Its channel-based interface attracts viewers comfortable with traditional TV experiences.
• Roku operates both as a platform and device manufacturer, offering unique opportunities. Roku users tend to be cord-cutters fully committed to streaming. The platform's home screen ads and channel guide placements offer visibility beyond traditional commercials.

Device considerations matter too:

• Smart TVs deliver the premium, lean-back experience ideal for brand storytelling
• Mobile devices enable immediate action but require creative optimized for small screens
• Connected devices (Roku, Fire TV) often indicate tech-savvy, intentional streaming viewers

Match platform and device selection to your audience's viewing habits. Young professionals might stream on mobile during commutes, while families gather around smart TVs for evening entertainment.

Choosing optimal ad formats

Format selection can make or break campaign performance. Different formats serve different objectives and suit different content types.

• For awareness campaigns, 15- and 30-second non-skippable pre-roll or mid-roll ads work well. They ensure complete message delivery in a premium environment. Keep creative simple with clear branding throughout, not just at the end.
• Performance-focused campaigns benefit from interactive formats that encourage immediate action. Overlay banners with QR codes, clickable end cards, or pause ads with clear calls-to-action help viewers transition from watching to doing.
• Consideration-stage marketing suits longer formats and sequential messaging. Use 30-second spots to tell a complete story, then retarget viewers with 15-second reminders. Interactive video that lets viewers explore features or benefits deepens engagement.

Content type influences format choice:

• Long-form content (movies, hour-long shows) tolerates mid-roll ads better
• Short-form content needs brief pre-rolls to avoid abandonment
• Live streaming (sports, news) offers natural breaks for traditional-style spots
• Binge viewing sessions benefit from frequency capping and varied creative

Test multiple formats but maintain consistent branding and messaging. A viewer might see your pre-roll on their phone, then encounter an interactive version on their smart TV. Consistency builds recognition across touchpoints.

Budgeting and bidding strategy

OTT advertising accommodates various budget levels, though minimum spends vary by platform and buying method. Understanding your options helps maximize every dollar.

• CPM (Cost Per Thousand Impressions) typically ranges from $25-40 for standard OTT inventory, though premium content or precise targeting can push rates higher. Compare this to traditional TV's $5-20 CPMs, but remember you're paying for waste-free, targeted impressions.
• Programmatic buying offers flexibility and efficiency. Real-time bidding lets you set maximum CPMs and only pay market rates. This works well for performance campaigns where you can optimize based on results. Start with $10,000-15,000 monthly budgets for meaningful programmatic campaigns.
• Direct deals with platforms guarantee inventory and often include added value like custom content or integrations. These require larger commitments (often $25,000+ per platform) but provide premium placements and dedicated support.

Small budget strategies:

• Focus on one platform initially to achieve meaningful frequency
• Use dayparting to concentrate spending when your audience watches
• Target narrow geographic areas for local businesses
• Test with programmatic before committing to direct deals

💡 Companies like AI Digital are democratizing access through solutions that unify demand and supply. Our Smart Supply integration cuts out platform bias—like Google favoring YouTube or Yahoo pushing its own inventory—and eliminates the costly inefficiencies of bid stream recycling. 

Budget 10-15% for creative development if you don't have existing video assets. High-quality creative significantly impacts performance and justifies the media investment.

Measuring and optimizing performance

OTT's measurement capabilities set it apart from traditional TV, but success requires choosing the right metrics and attribution models for your goals.

Immediate metrics available in real-time include:

• Impressions delivered and reach achieved
• Completion rates (aim for 90%+ on OTT)
• Frequency per household
• Geographic and demographic delivery
• Cost efficiency (CPM, CPV)

Attribution metrics connect ad exposure to business outcomes:

• View-through rate (VTR): Actions taken within a window after ad exposure
• Website lift: Increase in traffic from exposed households
• Conversion tracking: Sales, sign-ups, or app installs from viewers
• Cross-device attribution: Following viewers from TV exposure to mobile action

Brand lift studies measure softer metrics through survey-based research:

• Aided and unaided awareness increases
• Consideration and preference shifts
• Message association and recall
• Purchase intent changes

Optimization levers for improving performance:

• Audience refinement: Narrow or expand targeting based on performance
• Creative rotation: Test different messages, lengths, and formats
• Frequency adjustment: Find the sweet spot between awareness and annoyance
• Daypart optimization: Concentrate spending when your audience engages most
• Platform reallocation: Shift budget to best-performing inventory sources

Set up measurement frameworks before launching. Define success metrics, implement proper tracking pixels, and establish attribution windows that make sense for your sales cycle. Weekly optimization sessions catch issues early and capitalize on winning strategies.

The future of OTT advertising

The OTT advertising landscape evolves rapidly, with several trends reshaping how brands connect with streaming audiences. Understanding these developments helps future-proof your advertising strategy.

1. AVOD platforms are experiencing explosive growth as viewers seek free alternatives to mounting subscription costs. Tubi reported 80 million monthly active users in 2024, while Pluto TV and Amazon Freevee continue expanding their content libraries and user bases. This growth creates more inventory and competitive CPMs, making OTT accessible to smaller advertisers while giving major brands more options for scale.
2. CTV investment continues accelerating as advertisers shift budgets from linear TV. Programmatic CTV spending alone is projected to grow 60% annually, driven by improved measurement capabilities and proven ROI. 

A study of top-performing brands revealed they allocate 23.7% of their TV advertising impressions to CTV, which is higher than the average of 17.4% for other advertisers.

3. AI and machine learning transform campaign optimization. Platforms leverage AI for:

• Predictive audience modeling that identifies likely converters before they see ads
• Dynamic creative optimization that adjusts messages based on viewer context
• Real-time bidding strategies that maximize efficiency
• Content-matching algorithms that place ads in contextually relevant programming

💡 AI Digital’s Smart Supply represents a leap forward in programmatic buying. By leveraging AI and historical data, we filter out low-performing publishers and cut unnecessary bid hops, ensuring that only top-tier, pre-optimized supply reaches buyers. Paired with our Elevate platform’s predictive planning and real-time KPI optimization, advertisers gain both supply-side efficiency and demand-side intelligence. 

4. Shoppable and interactive formats will become standard, not experimental. As platforms develop better commerce infrastructure, the line between advertising and shopping blurs. Expect to see:

• Voice-activated purchasing through smart TV remotes
• Seamless mobile handoffs for complex purchases
• Virtual product trials within ad experiences
• Social features that let viewers share or save advertised products

5. First-party data strategies become essential as privacy regulations tighten. Successful advertisers will:

• Build direct relationships with streaming platforms
• Invest in customer data platforms that integrate with OTT buying systems
• Create value exchanges that encourage viewers to share preferences
• Develop cohesive strategies across owned, earned, and paid streaming touchpoints

6. Consolidation and standardization will simplify the fragmented landscape. Industry initiatives around measurement standards, creative specifications, and cross-platform frequency capping will reduce complexity. This maturation makes OTT advertising more accessible while maintaining its advanced capabilities.

The trajectory is clear: OTT streaming and TV advertising will continue growing in sophistication and importance. Brands that build expertise now, invest in quality creative, and embrace data-driven optimization will capture outsized returns as streaming becomes the dominant form of video consumption. The question isn't whether to include OTT in your media mix, but how quickly you can develop competitive advantages in this space.

Streaming is now the cornerstone of consumer habits, and the ability to adapt to this reality—through advanced data integration, AI, and new measurement technologies—will define the future of content delivery and audience engagement. — David Kenny, Executive Chairman of Nielsen

Conclusion on over-the-top advertising

As viewers abandon traditional TV for streaming services, advertisers must follow them with strategies that leverage the unique capabilities of the OTT medium.

The advantages are compelling: precise targeting that eliminates wasted impressions, engagement rates above 90%, cross-device reach that follows viewers throughout their day, and measurement capabilities that finally answer the question "did our ads actually work?" 

Yet success requires more than simply uploading your TV commercial to streaming platforms. Effective OTT advertising demands understanding platform ecosystems, choosing appropriate ad formats, developing quality creative assets, and building measurement frameworks that connect viewing to business outcomes. The fragmented landscape and technical complexities can overwhelm unprepared marketers.

The future promises even greater opportunities as AVOD platforms expand, AI optimization improves, and shoppable formats mature. Brands that invest in OTT expertise now will build competitive advantages that compound as streaming continues its inevitable dominance over traditional television.

The question facing marketers isn't whether to include OTT in their media mix, but how quickly they can develop the capabilities to excel in this space. Those who balance creativity with data, and efficiency with impact, will unlock OTT’s full promise—TV’s reach plus digital’s precision, building real relationships and real results.

Start small if needed, but start now. Test, learn, optimize, and scale. Your future customers are already streaming, so make sure your brand meets them there with messages that matter, delivered in moments that count. 

If you want expert guidance, we’re here to help. Get in touch with us and let’s launch your OTT success story.