You know what’s harder than skipping ads on streaming platforms? Reaching your audience without them skipping you.
Streaming killed the cable star, but not the ad break. Today’s viewers might be watching Hulu, YouTube TV, and Roku on their own terms, but they’re still very much watching. And while they’re bingeing true crime or cheering live sports, marketers have a golden opportunity: show up in the content they love, without being the thing they hate.
That’s where OTT (Over-the-Top) advertising comes in. It’s how growth teams, media buyers, and brand marketers run smarter, more targeted, more measurable campaigns, without relying on crumbling cookies or third-party workarounds.
OTT advertising refers to ads delivered through streaming services on internet-connected devices, bypassing traditional cable or satellite TV. Platforms like Hulu, Roku, and Amazon Fire TV allow brands to reach targeted audiences directly with video ads before or during content playback.
It’s how brands meet today’s binge-watching, multi-device, cord-cutting audiences, without feeling like old-school interruptions.
And if you're a digital advertiser, growth marketer, or brand builder navigating the ever-shifting media landscape, understanding how OTT works isn’t just nice to have; it’s non-negotiable.
In this article, we’ll break down what OTT advertising is, why it matters in a post-cookie world, how it compares to traditional and programmatic TV ads, and which platforms and tools like demand-side platforms (DSPs), and display advertising platforms, can help you win screen time and mindshare.
As mentioned earlier, OTT (Over-the-Top) advertising refers to video ads delivered through streaming platforms that bypass traditional cable or satellite TV. These ads appear within internet-streamed content, whether it’s a bingeable series, live sports, or on-demand movies, across devices like smart TVs, streaming sticks, game consoles, laptops, and mobile phones.
Unlike traditional TV ads that are broad and untargeted, OTT ads are served digitally, enabling brands to reach specific audiences based on demographics, interests, or viewing behavior.
And the market is growing fast. OTT video ad spending is expected to reach $207.52 billion worldwide in 2025, underscoring just how central streaming has become to global advertising strategies.
With so many terms floating around, OTT, CTV, and linear TV, it’s easy to get them mixed up. Here’s a quick breakdown to help clarify how they differ and how they fit together in the streaming ecosystem.
While OTT and CTV are closely related, OTT is what delivers the content; CTV is where it's viewed.
While OTT ads may look similar to traditional TV spots, they’re powered by digital infrastructure that allows for real-time targeting, dynamic delivery, and measurable performance. Here’s a closer look at how the process works, from audience definition to ad analytics.
Every OTT ad campaign starts with defining the target audience. Unlike linear TV, where ads are broadcast to everyone watching a channel, OTT enables precise segmentation. Advertisers can target based on:
These insights are often pulled from first-party data (streaming platform user accounts), third-party audience data providers, or even integrations with CRM or CDP platforms.
Once the audience is defined, ads are served through digital pipes. OTT platforms use ad servers or demand-side platforms (DSPs) to determine which ads are shown to which viewers.
Here’s what happens behind the scenes:
This process happens in milliseconds, ensuring that the right ad reaches the right viewer at the right moment.
A key innovation in OTT is dynamic ad insertion, which allows ads to be stitched into content in real time. This means every viewer can see a different ad, even when watching the same program at the same time.
DAI supports both live and on-demand content, enabling:
After the ad is served, performance tracking begins. One of OTT advertising’s biggest advantages over traditional TV is detailed analytics and attribution. Marketers can monitor:
Here are some of the most prominent OTT platforms offering ad inventory:
These platforms differ in content type, audience demographics, targeting capabilities, and CPMs, making platform selection a key part of your OTT strategy.
OTT ads may look like traditional TV commercials at first glance, but given they’re delivered digitally and allow for deeper viewer engagement, they take on more dynamic formats. Here are the most common ad types used in OTT advertising today:
These play before the content begins. They’re often high-impact because viewers are most attentive at the start.
These are inserted during the content at natural breaks (similar to traditional TV ad pods). These typically have high completion rates.
These ads are shown after the content ends. Less intrusive, but can suffer from lower engagement.
Viewers can choose to skip after a few seconds, usually five.
These are short ads (usually 6–15 seconds) that viewers must watch in full.
These ads encourage viewer interaction, such as clicking a CTA, exploring a product, or scanning a QR code.
DAI is not a format itself, but a delivery method that allows ads to be inserted in real time based on the viewer’s profile.
While traditional linear TV advertising has long been valued for its reach and storytelling power, its limitations have become increasingly clear in a digital-first world. Limited targeting, rigid scheduling, and delayed performance data make it difficult for advertisers to justify their high costs, especially when accountability and agility are table stakes in modern campaigns.
OTT advertising addresses these gaps with a more flexible, data-driven approach. It gives advertisers the ability to precisely target audiences, measure results in real time, and deliver relevant messaging across devices.
Here’s how the two compare across key campaign dimensions:
| Campaign dimension | Linear TV advertising | OTT advertising |
| Audience targeting | Broad and contextual (based on program/channel) | Granular targeting by demographics, interests, behavior, and location |
| Ad delivery | Pre-scheduled, based on fixed programming slots | Dynamically inserted based on real-time availability and audience match |
| Reach | Cable/satellite subscribers only | Cord-cutters, cord-nevers, and cross-device streamers |
| Measurement | Ratings estimates, post-campaign reports | Real-time performance metrics, including completions and conversions |
| Cost efficiency | High upfront cost, limited control | Programmatic bidding, budget optimization, and reduced waste |
| Creative flexibility | Static ad placements, minimal testing options | Supports A/B testing, creative versioning, and household-level personalization |
OTT doesn’t just replicate TV. It reimagines it. Instead of relying on content context to find your audience, OTT puts your audience first, then delivers your message to them wherever, whenever, and however they’re watching. This shift from content-based to audience-based buying enables advertisers to connect with real people, not just viewers of a particular show or time slot.
In short, OTT preserves the strengths of traditional television like sight, sound, and storytelling, while removing many of its constraints.
As a digital-first version of TV advertising, OTT offers marketers the best of both worlds: the storytelling power of television and the targeting precision of programmatic media. Here’s why advertisers are increasingly shifting their video ad budgets to OTT.
Unlike traditional TV advertising, which casts a wide net across all viewers of a given program, OTT enables granular audience targeting. Advertisers can define custom audience segments using data such as:
This household-level precision ensures that ads are only served to relevant viewers, eliminating wasted impressions. For advertisers, this means improved efficiency, tighter control over spend, and a higher likelihood of engagement and conversion.
Linear TV is losing ground to streaming, especially among younger, digitally native viewers. OTT fills this gap by offering access to two fast-growing audience segments:
These audiences often cannot be reached through traditional media channels. OTT enables advertisers to engage them where they spend their time, on connected TVs, mobile devices, and streaming platforms.
OTT campaigns can run across multiple devices, including:
This cross-device presence allows advertisers to build consistent brand narratives across the consumer journey, from awareness on the big screen to consideration on mobile.
Moreover, because OTT ads appear in full-screen, non-scrollable environments and are often non-skippable, they enjoy high viewability and completion rates. Viewers are typically more engaged, having intentionally selected the content they’re watching, which increases receptiveness to well-placed ads.
OTT advertising can be purchased programmatically, which gives advertisers the ability to bid dynamically for ad placements in real time. This model offers several advantages:
While OTT CPMs may be higher than display or social video ads, they’re significantly more cost-effective than traditional broadcast TV commercials, especially considering the improved targeting and measurement capabilities.
OTT platforms increasingly provide access to high-demand content, including live events, network series, and award shows. In many cases, advertisers can reach audiences watching premium content, such as the Super Bowl or The Oscars, even when linear TV inventory is sold out.
This makes OTT not just an alternative, but a strategic complement to linear media buys, especially for advertisers who want to maintain visibility during high-profile events without the limitations of traditional TV pricing and scheduling.
Unlike traditional TV, where advertisers often wait days for post-campaign ratings reports, OTT delivers detailed performance data in real time. Advertisers can track:
This immediacy enables ongoing optimization, adjusting targeting, pacing, or creative mid-flight to improve outcomes. It also enhances attribution, helping advertisers understand not only who saw the ad, but what actions followed.
OTT is highly effective on its own, but even more powerful when used as part of a coordinated digital strategy. Integrated media plans that include OTT, display, native, and video channels allow brands to:
As part of a full-funnel strategy, OTT plays a critical role in both upper-funnel awareness and mid-funnel engagement, especially when the creative is personalized to each audience segment.
While OTT is a powerful and fast-growing channel, it comes with a few hurdles that advertisers should be aware of:
OTT ads can be purchased in two main ways:
A media partner can help access premium inventory and optimize performance.
OTT refers to streaming content delivered over the internet, while CTV is the device used to watch it (like a smart TV or Roku). OTT is the content, CTV is the screen.
OTT ads are typically priced on a CPM (cost per thousand impressions) basis. CPMs can range from $20 to $65 or more. Costs vary by targeting, platform (Hulu vs. Pluto TV), ad format, and whether it’s live or on-demand content.
Yes, when viewed on connected TVs or streaming devices. However, YouTube on desktop or mobile is classified as digital video advertising, not OTT.
On CTV devices, OTT ads are typically not clickable, as users don’t interact with a mouse or touchscreen. Instead, QR codes or voice call-to-actions are used. Clickable ads are more common on mobile or desktop OTT platforms.
It depends on the platform and ad format. Some allow skippable ads, while others require non-skippable formats, often at a higher cost but with better completion rates.
OTT advertising isn’t just a shift in how ads are delivered; it’s a shift in how audiences are reached, measured, and converted. As viewership habits evolve, so must advertising strategies. With its precision targeting, premium content environments, and measurable performance, OTT offers brands a direct line to modern, engaged viewers across devices.
But to truly win with OTT, advertisers need more than great creative. You need the right tools, the right partners, and the right strategy. Whether you’re looking to extend your digital reach, make your TV dollars work harder, or connect with cord-cutting audiences, OTT puts you in control of the message and the moment.
Done right, it’s not just another screen. It’s your most powerful one.
Check out the key advertising metrics to track and improve ad network performance.
This article was originally published in 2020 and has been updated with new information.
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