For decades, linear TV, also known as traditional broadcast TV, has been the cornerstone of video advertising. Historically, brands attempting to remain competitive in their categories allocated substantial portions of their marketing budgets to linear TV — especially during events with massive reach like the Super Bowl. However, the digital revolution has dramatically altered this landscape. Streaming services and smart TVs have upended traditional advertising models, creating a fragmented marketplace. This revolution has changed how audiences consume content and ushered in the rise of connected TV (CTV) and over-the-top (OTT) strategies.

The Shift in Ad Spend

A significant uptick in ad spend for CTV and OTT in the past few years reflects the growing recognition of their importance in the marketing ecosystem. According to David Cohen, CEO of IAB, , 2023’s ad spend was 52% linear and 48% digital, and in 2024, this balance is predicted to flip for the first time to 52% digital vs. 48% linear. The numbers don’t lie: ad spend on CTV and OTT platforms has been soaring, signaling a tectonic shift in the advertising landscape. For brands, adapting to and leveraging CTV and OTT is no longer optional — it’s essential for staying competitive in today’s fragmented media environment.

Understanding the Platforms: CTV, OTT, and Linear TV

Linear TV

Linear TV has traditionally been the gold standard for raising brand awareness. It held the power to play kingmaker with brands like Coca Cola and Nike — with memorable ads that stuck with the consumer long after they turned off their TVs. Iconic campaigns like Budweiser’s “WASSUP” or Starburst’s “Berries and Cream” became cultural touchstones due to their wide reach and scheduled programming. With less audience time spent in front of traditional TVs, marketers must now find new ways to capture and maintain attention amidst the growing fragmentation.

OTT: Over-the-Top

OTT refers to the delivery method of streaming services, providing on-demand content via the internet. Platforms like Hulu, Paramount+, YouTube TV, Peacock, Apple TV, and Disney+ exemplify OTT services. For consumers, the low entry cost and vast content libraries empower their content choices, though the sheer volume of choices can lead to viewer fatigue. Despite this challenge, OTT offers sophisticated targeting opportunities, enabling advertisers to deliver personalized ads based on viewing habits and demographics, thus increasing ad spend efficiency and effectiveness.

CTV: Connected TV

CTV is an internet-connected device, such as a smart TV, gaming console or streaming device, used to stream OTT content. CTV combines the immersive experience of traditional TV with the targeting capabilities of digital advertising. Non-skippable, high-quality ads with interactive elements enhance viewer engagement. With dynamic ad insertion and detailed metrics, advertisers can tailor their messages to specific households, optimizing campaigns in real time based on viewer data.

Reaching the Right Screens: Benefits and Risks

The advanced targeting capabilities of CTV and OTT platforms are among their primary benefits. Advertisers can segment audiences by various criteria like age, household income, viewing habits, geographic location, devices used, life events and even profession, ensuring tailored and relevant marketing messages that enhance awareness and conversion. Real-time performance data allows for immediate campaign adjustments, maximizing effectiveness and ROI.

By leveraging audience data, brands and their agency partners can refine their strategies continuously and find new audiences that might not be aware of their brand. Many streaming services offer the ability to upload customer lists to create look-a-like audiences, expanding reach to potential new customers who share similar characteristics with existing ones. This data-driven approach enables precise targeting and helps in crafting personalized ad experiences that resonate deeply with viewers.

However, shifting a significant portion of marketing budgets to CTV and OTT can come with risks. Brands have less transparency into placements, how audiences are measured and how outcomes are attributed to ad spend. Additionally, the vast content array can overwhelm audiences, leading them back to familiar, multitasking-friendly content, resulting in distracted attention to the ads served. The option to skip ads or choose ad-free experiences challenges advertisers aiming to reach a broader audience. Understanding and leveraging detailed audience data is crucial for mitigating these risks and capitalizing on the benefits.

Tactical Tips for Maximizing CTV and OTT Success

Now that you know where and how to find your audiences through CTV and OTT strategies, the next step is crafting compelling campaigns that cut through the noise and capture attention. Harnessing the power of storytelling and deploying it in the right way, at the right time, is the path to success in this fragmented landscape. CTV and OTT platforms offer diverse advertising formats that enable brands to engage viewers in innovative ways, and knowing which tactic to implement makes all the difference to maximize impact. In addition to standard placements, there are also additional engaging ways to reach our target audience:

Pre-roll, mid-roll and post-roll ads capture attention at different stages of content consumption. This format maintains the familiar structure of traditional TV, catching viewers at predetermined breaks in the content they’re consuming.

Pause ads are an interesting tactic in this space that leverages static images to appear when a viewer pauses the content. These ads are non-intrusive and can effectively capture attention during a natural break in the viewing experience.

Dynamic creative ads can change based on different audience segments, such as where a person lives or the weather near them, that trigger a change in the ad. Creative elements are determined instantly based on audience online behavior and can be further optimized based on audience engagement with the content.

Interactive CTV ads allow users to interact with the ad on their TV screen and could include clickable links that appear directly on screen. Remember all the QR code ads we’ve seen on Super Bowl Sunday? Those are great examples of interactive ads that have found their way into CTV strategies at an increasing rate. If we’re looking to the future of these strategies, it’s propelled forward by interactive ads.

These formats allow marketers to create highly targeted, engaging campaigns that resonate with their audiences.

TL;DR?

Linear TV Spend Is Declining: The shift from traditional TV to CTV and OTT is reshaping advertising, driven by personalized viewing experiences on streaming services and smart TVs.
Ad Dollars Go Digital: With digital ad spend expected to surpass linear TV in 2024, brands must embrace CTV and OTT to stay competitive.
Target Like a Pro: Advanced targeting and engagement features on CTV and OTT platforms enable more personalized and compelling ad campaigns.

Embracing CTV and OTT allows brands to deliver data-driven, personalized campaigns that resonate with today’s fragmented audiences. As ad spend shifts from linear to digital, the future of advertising lies in harnessing these innovative platforms.

Looking for a partner to keep your brand ahead of the curve by adopting CTV and OTT strategies in an ever-evolving market? Hiebing can help. Email Nate Tredinnick at ntredinnick@hiebing.com to set up a call.