Over-the-top (OTT) and Connected TV (CTV) advertising have emerged as powerful tools for Direct-to-Consumer (D2C) brands seeking to reach cord-cutters. These platforms deliver content via the internet, bypassing traditional cable and satellite providers, offering new opportunities for advertisers to engage with evolving audiences.

As more consumers abandon traditional TV services in favor of streaming options, D2C brands must adapt their marketing strategies to maintain relevance and connect with viewers who have embraced these new habits. Keep reading to learn more about effective OTT and CTV strategies for direct-to-consumer brands.

Understanding the Cord-Cutting Landscape

The cord-cutting trend has accelerated rapidly, with millions of households opting to forgo traditional cable and satellite subscriptions. According to recent projections, the number of cord-cutters in the United States is expected to reach 68.5 million by 2025. This shift is driven by various factors, including cost savings, content preferences, and the desire for more flexible viewing options.

As consumers move away from traditional TV, advertisers face both challenges and opportunities. While reaching audiences through conventional means becomes more difficult, OTT and CTV platforms offer new avenues for targeted and engaging advertising. For D2C brands, this shift presents a unique chance to connect with consumers in a more personalized and measurable way.

The Rise of OTT and CTV Platforms

OTT and CTV platforms have gained immense popularity among cord-cutters, offering a wide range of content and viewing options. These platforms deliver video content directly to viewers via the internet, allowing for greater flexibility and personalization in the viewing experience.

Popular OTT and CTV Platforms

Netflix, Hulu, Amazon Prime Video, Disney+, Roku, Pluto TV, and Tubi are among the most popular OTT and CTV platforms. Netflix launched an ad-supported tier in November 2022, joining other platforms in offering advertising opportunities for brands to reach their target audiences.

Hulu offers an ad-supported tier that allows advertisers to reach a diverse audience. With over 39 million subscribers, Hulu’s viewership skews younger, with a median age of 31. This makes it an attractive platform for D2C brands targeting millennials and Gen Z consumers.

Amazon Prime Video, with its vast user base of over 150 million subscribers worldwide, offers unique advertising opportunities through its Amazon Advertising platform. Brands can leverage Amazon’s rich customer data to target specific audience segments based on shopping behaviors and interests.

Advantages of OTT and CTV Advertising for D2C Brands

OTT and CTV advertising offer several key advantages for D2C brands. These platforms provide highly targeted audience reach, allowing brands to deliver ads to specific demographics, interests, and behaviors. This precision targeting aligns well with the direct-to-consumer model, enabling brands to maximize their advertising ROI.

Additionally, OTT and CTV advertising offer improved measurement and attribution capabilities compared to traditional TV advertising. Brands can track viewer engagement, conversions, and other key metrics in real time, allowing for more data-driven decision-making and campaign optimization.

The opt-in nature of streaming services also contributes to potentially higher engagement rates, as viewers actively choose to consume content on these platforms.

Developing an Effective OTT and CTV Strategy for D2C Brands

To succeed in the OTT and CTV advertising space, D2C brands must develop a well-planned strategy that leverages these platforms’ unique capabilities. The following subsections provide actionable insights for creating a successful campaign that resonates with cord-cutters and drives results.

Audience Segmentation and Targeting

Effective audience segmentation is important for success in OTT and CTV advertising. These platforms offer various targeting options, including demographic, behavioral, and contextual targeting, allowing D2C brands to reach their ideal customers with precision.

Demographic targeting enables brands to target specific age groups, genders, income levels, and geographic locations. For example, a D2C skincare brand targeting young professionals might target viewers aged 25-34 in urban areas with higher income levels.

Behavioral targeting leverages data on viewers’ interests, past viewing habits, and online behaviors to deliver relevant ads. A D2C fitness equipment brand could target viewers who have shown interest in health and wellness content or have previously engaged with fitness-related ads.

Contextual targeting allows brands to place ads alongside relevant content. For instance, a D2C cookware brand might choose to advertise during cooking shows or food-related content on OTT platforms.

D2C brands can also leverage first-party data to create custom audiences on CTV platforms. For example, a brand could upload its customer email list to match with CTV viewers, enabling highly targeted campaigns to existing customers or lookalike audiences.

Creative Considerations for OTT and CTV Ads

Creating effective ad content for OTT and CTV platforms requires careful consideration of the unique viewing environment. Generally, shorter ad lengths (15-30 seconds) perform well, as they maintain viewer attention without causing significant disruption to the viewing experience.

Storytelling techniques play a significant role in engaging viewers. Successful D2C brand ads often focus on showcasing the product’s unique value proposition and how it solves a specific problem for the consumer. For example, the D2C mattress brand Casper effectively uses humorous storytelling in its CTV ads to highlight the ease of ordering and setting up their mattresses.

When developing creative for OTT and CTV platforms, it’s crucial to optimize ads for various screen sizes, from smartphones to large TVs. This ensures that the ad’s visual elements and text remain clear and impactful across all devices.

Interactive ad formats are gaining popularity in CTV environments. These formats allow viewers to engage directly with the ad content using their remote controls or mobile devices, potentially leading to higher engagement rates and more meaningful brand interactions.

Measuring Success and Attribution

Tracking the right metrics and KPIs is essential for measuring the success of OTT and CTV campaigns. D2C brands should focus on metrics such as video completion rates, brand lift, website traffic, and conversions attributed to the campaign.

Attribution models for OTT and CTV advertising have become increasingly sophisticated, allowing brands to better understand the impact of their ads on the customer journey. Multi-touch attribution models can help D2C brands identify how OTT and CTV ads contribute to conversions alongside other marketing channels.

Cross-device tracking is particularly important in the OTT and CTV space, as viewers often use multiple devices to consume content and make purchases. By implementing cross-device tracking, D2C brands can gain a more comprehensive understanding of how their ads influence consumer behavior across different touchpoints.

However, attribution in CTV advertising presents unique challenges, such as the lack of cookies in most CTV environments. To overcome these challenges, brands can utilize advanced attribution techniques like household-level matching, probabilistic modeling, and incremental lift studies to measure the true impact of their CTV campaigns.

Integrating OTT and CTV with Other Marketing Channels

D2C brands should integrate OTT and CTV advertising efforts with their broader marketing strategy to maximize the impact. A holistic approach that combines OTT and CTV with other channels can create a more cohesive and effective marketing campaign.

Complementing Digital Advertising

OTT and CTV advertising can work synergistically with other digital marketing efforts to reinforce messaging and drive conversions. For example, a D2C brand running a CTV campaign could simultaneously run retargeting ads on social media platforms to reach viewers who have been exposed to their TV ads.

Coordinating messaging across channels helps create a consistent brand experience. A D2C fashion brand might use CTV ads to showcase their latest collection while using social media ads to highlight specific products and drive traffic to their website.

Leveraging Traditional TV Advertising

While focusing on cord-cutters is important, D2C brands shouldn’t completely abandon traditional TV advertising. A balanced approach that combines OTT, CTV, and traditional TV can help maximize reach and impact.

By allocating budget across these channels based on target audience preferences, D2C brands can ensure they’re effectively reaching both cord-cutters and traditional TV viewers. For instance, a brand targeting a broad demographic might allocate a larger portion of its budget to traditional TV while focusing OTT and CTV efforts on reaching younger, tech-savvy consumers.

Integrating with Email and SMS Campaigns

Integrating OTT and CTV advertising with email marketing and SMS campaigns can create powerful retargeting opportunities. Brands can use data from CTV campaigns to segment their email lists and send targeted follow-up messages to viewers who have been exposed to their ads.

Similarly, SMS campaigns can be used to deliver timely reminders or offers to viewers who have shown interest in a product through their CTV interactions.

Future Trends in OTT and CTV Advertising

As technology continues to evolve, several emerging trends are shaping the future of OTT and CTV advertising. Interactive ads are gaining traction, allowing viewers to engage directly with ad content using their remote controls or mobile devices. This interactivity can lead to higher engagement rates and more meaningful brand interactions.

Shoppable TV experiences are another exciting development. They enable viewers to purchase products directly on their TV screens while watching content. This seamless integration of content and commerce presents a significant opportunity for D2C brands to drive conversions.

Advancements in targeting and measurement capabilities are also on the horizon. As data collection and analysis techniques improve, D2C brands will be able to deliver even more personalized ad experiences and gain deeper insights into campaign performance.

Artificial Intelligence (AI) and machine learning are playing an increasingly important role in OTT and CTV advertising. These technologies are being used to optimize ad targeting, personalize creative content, and predict viewer behavior, allowing brands to deliver more relevant and effective campaigns.

Privacy Concerns and Regulations in OTT and CTV Advertising

As OTT and CTV advertising continues to grow, privacy concerns and regulations are becoming increasingly important for both advertisers and consumers. D2C brands must navigate a complex landscape of data protection laws and consumer expectations.

The implementation of privacy regulations such as the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the United States has significant implications for data collection and targeting practices in OTT and CTV advertising. Brands must ensure they are compliant with these regulations and transparent about their data usage.

To address privacy concerns while maintaining effective targeting capabilities, many platforms are exploring privacy-preserving technologies such as data clean rooms and federated learning. These approaches allow brands to leverage valuable insights without directly accessing individual user data.

Maximize Your Reach with OTT and CTV Advertising

OTT and CTV advertising present a powerful opportunity for D2C brands to reach cord-cutters and engage with their target audience in new and innovative ways. By leveraging the unique targeting capabilities, creative flexibility, and measurement tools offered by these platforms, D2C brands can create highly effective campaigns that drive brand awareness and conversions.

The Remnant Agency specializes in helping brands access premium inventory at competitive rates, maximizing your advertising ROI. With expertise in navigating the complex OTT and CTV landscape, The Remnant Agency can help you develop a tailored strategy that leverages the latest technologies and best practices in this rapidly evolving space.

Contact The Remnant Agency today to schedule a strategy session with our team. We are ready to explore how our data-driven approach and industry insights can help your brand connect with cord-cutters and drive growth through effective OTT and CTV advertising campaigns.