OTT advertising: what it is, how it works, advantages and disadvantages

OTT advertising: what it is, how it works, advantages and disadvantages

OTT is all around us but, at the same time, it is not well-known at all. On the one hand, we know Netflix and YouTube along with Smart TV and Roku. However, we have never thought about what OTT and OTT advertising are. No worries, this article is here to help you!


OTT (over-the-top) advertising is the ads that are delivered directly to the viewers online via streaming video services or devices like smart TVs or CTVs. The term “over-the-top” means the possibility to bypass traditional TV providers that control the media broadcast and gives the advertisers the opportunity to address their potential audiences directly. The top position provides media companies (and advertisers) with the freedom of action with pre-scheduled broadcasting or geographical limitations.


Just as streaming services push the boundaries of traditional television, OTT advertising alters the image of paid media. OTT videos are a major component of PErformance Media Mix. You can use them as a fully functional advertising channel that makes more than simply increases your brand awareness, it can attract and promote clients throughout the whole funnel. Advantages of OTT videos in comparison to traditional television:

  • Precise targeting;
  • Increased advertisement relevance that increases the engagement;

Possibility to create and supplement basic campaigns with targeted additional strategies. This way you can increase the coverage, manage the frequency, follow the competitors, and focus on the clients that have left.

Improved accountability – the quality assessment of the television efficiency, it also helps to optimize your future campaigns;

High-quality analytics.

OTT video statistics show that the audience focus (especially of the younger) has shifted from cable TV to streaming services and OTT applications, such as Netflix, Hulu, Roku, Crackle, Plex, Pluto.TV, Vimeo, Vevo, etc. The forecast is that the OTT advertising expenditures will have reached 2,373 billion USD by 2025. This speaks of the rapid development of advertising on streaming media. Apart from the growing number of OTT video views, over-the-top marketing platforms are becoming more and more flexible and provide their clients functional opportunities for targeting and attribution that did not exist a few years ago.


This type of video ads can be shown on many devices ( e.g. Roku or CTV) and streaming services (e.g. OTT apps). Basically, it can be any device showing online videos, such as:

  • Mobile devices;
  • Personal computers;
  • Smart TVs, CTVs;
  • Streaming devices (Roku, Amazon Fire TV, Apple TV);
  • Game consoles.

What is the difference between AVOD, SVOD, CTV, vMVPD, Linear TV, and Advanced TV?

At first glance, it may seem that streaming videos are one single channel. However, there are several competitive business models and devices that determine the way in which we get access to streaming content.

The most popular OTT services are:

  • SVOD (subscription video-on-demand), i.e. streaming services that require you to subscribe to them. The user must pay to watch the ad-free content (Netflix, Hulu и Amazon Prime Video);
  • AVOD (advertising-based video-on-demand). These are streaming services offering free videos with ads (Crackle, Tubi, Vudu);
  • TVOD (transactional video-on-demand). Here, you pay for particular parts of the content (iTunes, Google Play, Vudu, and Vimeo);
  • vMVPD (Virtual Multichannel Video Programming Distributor) is a streaming provider that offers you paid TV shows. This is a combination of streaming and broadcasting content (AT&T Now, Sling, YouTube TV);
  • CTV (connected TV) is a TV device connected to the Internet.
  • Linear TV – traditional television with scheduled broadcasts (non-OTT).


Brands investing in OTT videos use various channels for the broadcast:

  • TV publishers
  • Native OTT services
  • Streaming linear services
  • OTT devices
  • The most popular platforms are:
  • Roku OTT Ads;
  • Hulu OTT Ads;
  • Vimeo OTT Ads;
  • Amazon Fire Advertising;
    • Twitch Advertising;
  • Disney Plus Advertising;
  • HBO Max Advertising;
  • Paramount+ Advertising, etc.


Generally, advertisers purchase OTT advertising in two ways: via guaranteed orders ( IOs) and programmatic advertisement services online. Guaranteed IOs have fixed prices, and pre-set demonstrations based on the coverage and frequency. Data-based programmatic purchases are based on real-time online biddings which allow the advertiser and the programmatic advertisement service to control the targeting. However, it guarantees neither the number nor the frequency of demonstrations. You can also contact Adsgard online to purchase OTT advertising.


OTT advertising is video advertising for more advanced audiences who expect a high-quality advertising approach. Here are several tips to help you create and launch your OTT ads:

Make sure that the video can be customized for different devices. When OTT ads are embedded into video clips, they might be shown on various gadgets and it is not guaranteed that your ad will fit a widescreen TV. For this reason, you need to adjust the video size for all devices, both with small and large screens.

Leave 30 seconds or less for ads with no possibility of skipping, and do not into the trap of making your ad too long. Remember that OTT viewers have different expectations regarding the streaming content. The ads need to be short and to the point – 15 to 30-second ads with no skipping option.

Use dynamic creatives to personalize the experience. The appearance, the sound, and the impression of your videos need to reflect your audience. It can be the day of the week, time, geolocation, weather, or behavioral signals. All these can be combined.


OTT offers several levels f audience targeting. Depending on the platform and your approach to OTT purchase, you can set up the targeting on the basis of the provider audience data or your clients’ data. Most OTT platforms allow you to base the targeting on:

  • Behavior and interests
  • Demographics
  • Geography
  • Audiences


OTT is transforming the advertising sphere here and now. As the traditional TV keeps losing viewers, the older generation along with the youth will choose streaming apps and OTT services with advertising, such as Hulu, Sling, and Pluto. If you add this novel channel to your advertising strategy, you will get hold of a unique opportunity to appeal to your target audience and do it before your competitors who are only at the beginning of their way to modern brand advertising technologies. The rapid increase in the number of OTT ad views gives the advertisers more possibilities in the sphere of digital advertising. If you want to know more, feel free to contact one of Adsgard’s OTT experts.


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