Over-the-top (OTT) media buying is now a must-have in any savvy agency's toolkit. As American viewers continue to "cut the cord" on cable and flock to streaming services, marketers have followed suit – spending over $10 billion on OTT ads in just the first eight months of 2024. OTT advertising replaces the old-school TV buy with a data-driven, targeted approach that reaches viewers on their favorite streaming platforms.
If you're a U.S.-based marketing specialist at an agency, this guide will walk you through step-by-step instructions on how to plan, buy, and optimize OTT advertising. We'll cover everything from the basics (what OTT media buying even means) to advanced tips on targeting, budgeting, creative, and measurement.
OTT stands for "over-the-top," referring to video content delivered via the internet without traditional cable or satellite TV service. In practice, OTT media buying means purchasing ad space on streaming platforms – think 15 or 30-second video spots that play before or during shows on Hulu, Roku Channel, Peacock, etc. When a viewer streams content on an internet-connected device and sees your ad, that's OTT advertising in action.
OTT media buying retains the big-screen impact of TV commercials while adding the precision of digital marketing. Unlike broadcast TV ads blasted broadly to anyone tuned in, OTT lets you target specific audiences and deliver ads dynamically via internet ad servers. You're essentially bypassing cable providers and reaching viewers directly through streaming. With cable subscriptions steadily dropping – an estimated 35% of U.S. households cut the cord by 2024 – OTT ads have become critical for reaching those streaming-only viewers.
Precise targeting: OTT platforms know who's watching (via account login data and device IDs) and allow targeting by demographics, interests, behaviors, and location – far beyond the broad age/gender targeting of traditional TV. (More on targeting in Step 3.)
Cross-device reach: Ads can be delivered to smart TVs, streaming sticks, mobile devices, tablets, and gaming consoles, meeting viewers wherever they stream.
High engagement: Viewers actively choose OTT content on demand, so they're often more engaged and attentive. OTT ads are typically unskippable and integrated into premium content, yielding completion rates around 90–95% (much higher than skippable web video ads).
Measurable outcomes: Since OTT is digital, you get analytics on impressions, views, clicks, and even conversions/website visits driven by the ad – data you can't get from a traditional TV commercial. Measuring Return on Ad Spend (ROAS) and optimizing in near-real-time is possible with OTT (we'll discuss measurement in Step 8).
Flexibility and efficiency: OTT media buys can be executed programmatically (automated auctions) or via direct deals, allowing flexibility in budget and targeting. You can start small, test, and scale what works – even optimize campaigns mid-flight by swapping creative or adjusting targeting based on performance data.
In short, OTT media buying is how agency marketers bring modern digital advertising savvy to the TV screen. It's the marriage of TV's storytelling power with the granularity and accountability of online ads. Before jumping into tactics, let's clarify the types of OTT platforms you might advertise on.
This is often the first question agencies get from clients. Unlike the fixed price of a primetime TV spot, OTT operates primarily on a CPM (cost per thousand impressions) model. You pay for each ad impression served, and CPMs can vary by platform, targeting, and inventory quality. Here's what to know about budgeting and costs in the U.S. market:
In the U.S., standard OTT/CTV advertising inventory averages about $25–$40 CPM (cost per 1,000 impressions). This is a useful benchmark range for broad targeting on well-known platforms. For example, if you want to reach a general audience on a popular ad-supported streamer, you might pay around $30 per thousand views of your ad. Keep in mind this can fluctuate – an $18 CPM might be possible for very broad buys (or remnant inventory), whereas premium shows or high-value targets could command $50+ CPM.
If you want your ads in top-tier content (say, the latest hit series on Hulu or live sports streaming), or you have very granular targeting (e.g., only in affluent ZIP codes, or only to in-market luxury car shoppers), expect CPMs higher than $40. It's not unheard of to see $50–$60+ CPMs for coveted placements. For instance, a 30-second ad during a highly rated streaming premiere might cost about $58 CPM (comparable to network TV primetime). Essentially, you pay a premium to guarantee placement in select content. But remember, traditional TV CPMs can appear lower (e.g. $10 CPM) because they include a lot of waste (many viewers who aren't your target). With OTT's precision, a higher CPM is offset by far less waste – you're paying for mostly relevant impressions.
One of the biggest perks of OTT advertising is the robust audience targeting it offers. Unlike linear TV (where an ad hits everyone watching a given show, with no fine control), OTT lets you slice and dice viewers using digital data. This means your OTT ad spend can be laser-focused on the people most likely to be interested in your client's product, improving efficiency and ROI.
Here are some of the targeting capabilities available in OTT media buying:
Demographic Targeting: Of course, you can target by basics like age range, gender, household income, education, etc. OTT platforms know this info either from user profiles or third-party data matching. Want to reach women 25-54 or households with income $100K+? OTT can do that, just like online ads.
Geographic Targeting: OTT allows very granular geo-targeting. You can target by country, state, DMA (Designated Market Area for TV regions), city, ZIP code, or even geo-fence specific areas (down to a 1-mile radius if desired). This is powerful for local marketing – e.g., an agency with a restaurant client can show OTT ads only to people within 5 miles of their locations. You can also exclude areas, target specific congressional districts for political ads, etc. It's far beyond the old local TV buys by media market; you could target just Manhattan within the New York market, for example.
Interest & Behavior Targeting: Similar to social media or display advertising, OTT platforms (especially when buying programmatically) let you target based on viewer interests, behaviors, and even purchase intent. Streaming platforms collect a wealth of data on viewing habits and online behaviors, which can be used to segment audiences. For instance, you might target "fitness enthusiasts" (people who watch workout videos or visit gym-related websites) or "auto intenders" (people whose online behavior suggests they plan to buy a car). Third-party data providers also integrate with many OTT ad platforms, so you can apply audiences like "in-market for insurance" or "frequent travelers" to your OTT campaigns.
Time-of-Day & Day-of-Week: Since streaming viewing habits vary (e.g., people watch more in evenings and weekends), you can schedule your OTT ads to run at optimal times. Running a breakfast cereal ad? Maybe watch heavy on Saturday morning cartoons on streaming apps. Many platforms allow dayparting so you spend budget when viewers are most active or when your message is most relevant.
Frequency: Because OTT often has household-level identifiers (like a specific smart TV or streaming account), you can do clever things like frequency capping across devices in the same household. For example, ensure a household doesn't see your ad more than 3 times per day.
Retargeting: You can retarget people who've visited your client's website by matching them to streaming devices (often via IP address matching). For instance, someone browsed a car on your site, and later that evening, they get your OTT ad on their Roku TV – that's retargeting in action.
In summary, OTT targeting brings the full arsenal of digital ad targeting to the TV environment. You're no longer "shouting into the void" or blanketing broad demographics indiscriminately. Instead, you can pinpoint specific audience segments and serve highly relevant, personalized ads. This improves efficiency – your budget goes toward viewers likely to convert – and it means even with smaller budgets, you can make an impact by zeroing in on niche groups.
Pro Tip: When crafting an OTT media plan, mix different targeting layers smartly. For awareness, you might keep targeting broader (e.g., all adults 18-49 in certain geos). For retargeting or promotions, you might layer on behaviors or run separate campaigns for specific segments (e.g., a travel client could target "beach travelers" with one message and "adventure travelers" with another). The key is to exploit OTT's targeting without over-segmenting to the point that your audience is too narrow to scale. Always check the potential reach of your targeting criteria; if it's tiny, broaden it, or you'll have trouble delivering ads.
Not all streaming platforms are created equal – and for advertisers, the platform's business model determines whether and how you can run ads on it. The main OTT platform types include:
Platforms where content is free to the viewer but supported by ads. Users can watch on-demand movies or shows but must sit through commercials, much like traditional TV. AVOD services include major free streaming apps like Pluto TV, Tubi, etc., which let viewers stream at no cost in exchange for watching ads. YouTube is another example – viewers watch videos for free with ad breaks (unless they pay for YouTube Premium). For marketers, AVOD services offer a wide reach to cost-conscious audiences and ample ad inventory. Ads on AVOD are often sold programmatically or via platform partners, and targeting can be fairly granular, given that these platforms often require user login or device data.
FAST is a specific subcategory of AVOD that closely mimics the linear TV experience, but delivered via streaming. FAST platforms stream curated live channels or scheduled programming that viewers can flip through, all for free with ads. Examples include The Roku Channel, Xumo, and Samsung TV Plus.
Viewers don't choose individual episodes on demand; instead, they jump into continuous streams of content (e.g., a channel playing crime dramas 24/7).
From an advertising perspective, FAST channels offer mass reach and TV-like ad pods, and are great for brand awareness campaigns. FAST has exploded in popularity as cord-cutters seek a "lean-back" channel-surfing experience without a cable bill. The content on FAST is often older or syndicated shows/movies, but the ad experience is like TV – mid-roll breaks and all – so marketers can repurpose TV creatives here effectively.
Platforms where viewers pay a subscription fee for ad-free (or limited-ad) content. Think Netflix, Disney+, HBO Max (now just Max), Amazon Prime Video, etc. Traditionally, SVOD meant zero ads in exchange for a monthly fee. However, many top SVOD services have recently introduced ad-supported tiers at a lower price (for example, Netflix's "Basic with Ads" or Disney+ with ads). This hybrid model gives advertisers access to what were previously walled gardens of ad-free eyeballs. SVOD services are attractive because they have premium content and huge user bases, but ad inventory is more limited (only subscribers on the ad tier see ads) and often more expensive per impression.
Still, the ability to reach coveted audiences on platforms like Disney+ – now that they allow ads – is a game-changer. As of 2025, advertisers can finally reach viewers on nearly all major streaming services, either via direct deals or programmatic channels, thanks to the rise of ad-supported options on SVOD.
Less relevant for ongoing ad campaigns, TVOD refers to pay-per-view or rentals (like renting a movie on Apple TV or Amazon). There are also Hybrid models (e.g., Hulu is often a hybrid of SVOD+AVOD: subscribers pay a fee and still see ads unless they pay a premium for no ads). In the U.S., Hulu, Peacock, and Paramount+ are popular hybrids – they have subscriptions but also show ads to those on the basic plans. For our purposes, just know where there are ads, there's an opportunity to buy ads. Pure subscription platforms without any ad options are essentially off-limits for advertising (for example, HBO Max used to be ad-free only, but now they even has an ad tier).
When planning an OTT buy, consider the platform type in relation to your client's goals and target audience. AVOD and FAST services can provide broader reach and cost-efficient CPMs (since they're free to consumers, they attract large audiences willing to watch ads) – great for top-of-funnel awareness.
Premium SVOD tiers with ads might have higher CPMs but could deliver more engaged viewers or specific demographics (e.g., a high-income audience on Netflix's ad tier). Often, a mix yields the best results. For instance, you might run a campaign across several AVOD/FAST channels for scale (Pluto, Tubi, Roku Channel) while also securing some spots on Hulu or Max's ad platform for targeted reach during prestige content. We'll talk about how to buy ads on these in the upcoming steps.
One major advantage of OTT advertising is that you can actually measure results in ways traditional TV never could. However, OTT measurement isn't always plug-and-play; it requires setting up the right tracking and understanding new metrics. As an agency marketer, you'll want to demonstrate the Return on Ad Spend (ROAS) of your OTT buys to clients, linking the ad spend to tangible outcomes like site traffic, conversions, or sales.
Before the campaign launches, decide what success looks like. Is the goal brand awareness (if so, metrics might be reach, frequency, video completion rate, or brand lift survey results)? Or is it direct response (metrics: clicks, site visits, conversions, ROAS)? Perhaps it's a bit of both. Having clear KPIs will guide what tracking you need. For example, if ROAS (revenue per ad dollar) is key, you need a way to attribute revenue (like e-commerce tracking of purchases after ad exposure).
Want to dive deeper into what metrics matter and how to track them? Read the full guide on OTT advertising metrics →
As an agency, determine what KPIs you're targeting. If the goal is broad awareness, you'll want enough budget to achieve frequency (e.g., 3+ impressions per viewer) across your target audience. If your target audience is, say, 1 million people, to get 3 million impressions (3 per person) at $30 CPM, you'd need about $90,000.
For test campaigns or niche audiences, you might start smaller (e.g., $15k to reach a narrow demographic with frequency). Always align budgets to campaign goals and the scale of the audience. OTT can be very efficient, but it's not "cheap" in the absolute sense – video inventory is premium, and you need sufficient spend to gather data and avoid appearing to too few people.
Think in CPM and Total Impressions: Educate your clients to focus on the value of targeted impressions rather than the sticker shock of CPM. Explain that a $30 OTT CPM, delivered to the right 1,000 people, can be more cost-effective than a $10 CPM local TV spot that mostly hits irrelevant viewers. Many OTT platforms also allow cost-per-completed-view or cost-per-action models now, but CPM is still the common currency. If using a performance model (like cost-per-visit or cost-per-install offered by some platforms), ensure you have historical data or start with a test to set those bids appropriately.
Budget Allocation Tips: If you have a limited budget, consider focusing on one or two platforms at first to get meaningful data, rather than spreading thinly across many. For example, instead of $5k each on five platforms, maybe do $25k on the one platform that best reaches your audience (say, Hulu if targeting young adults, or Roku if you want a broad household reach). This way, you achieve sufficient frequency and presence to be noticed. You can also use dayparting or geographic concentration to make the most of a small budget – e.g., only run ads during prime streaming hours (evenings) to avoid paying for middle-of-night impressions that few see, or target just a few key markets instead of nationwide.
CPM Benchmarks in 2025: To give a rough sense for U.S. OTT CPMs by type: General AVOD/FAST inventory – $20–$30 CPM (often lower end for untargeted national buys). Premium SVOD tier inventory – $30–$50 CPM (higher if in exclusive shows). Live sports streaming – $40+ CPM (sports commands a premium). Local/regional targeting – add $5-10 to CPM in many cases due to a smaller audience. Highly specific data-targeting (e.g., auto intenders) – could raise CPM by 20-50% due to data costs. Always check with your platform or vendor for the latest, as marketplace demand fluctuates.
Creative Production Budget: Don't forget to budget for the creative itself. Your video ad needs to be high-quality to make the spend worthwhile. A rule of thumb: allocate about 10-15% of your media budget for creative development if you don't already have video assets. For agencies, this means advising clients that an OTT campaign might require some upfront investment in producing a great 15 or 30-second spot, but it's worth it to avoid running a subpar ad that underperforms.
Getting your ad in front of the right audience on the right platform is only half the battle – the creative needs to resonate. OTT viewers can't generally skip ads (except in some cases like YouTube), but they can and will tune out if the creative is dull, irrelevant, or annoying. Plus, on a big TV screen, production quality counts. Here are the best practices to ensure your OTT video ads hit the mark:
Keep it Short and Sweet: The consensus is that 15 seconds is the sweet spot for OTT ads, with 30 seconds as the upper limit in most cases. In fact, some OTT platforms now offer even 6-second "bumper" ads (very short spots great for quick brand messages). A good rule: aim for 15s, but have a 30s version if the story truly needs it. Grab attention in the first 2–3 seconds with your key message or something visually engaging – because even if viewers can't skip, you want to hook their interest. Remember, OTT viewers often have a remote in hand; if an ad is boring, they might mentally check out or even pause/exit the content. Use concise storytelling and avoid slow build-ups. Front-load your branding or offer so that even partial viewers get the point. "Short and immediate" is key: one source suggests OTT viewers can easily skip or ignore, so make an immediate impression and keep ads ~15-30s.
Design for the Big Screen (but Consider Small Screens too): A large portion of OTT content is watched on actual TVs in a living room (Connected TV). On a big HD or 4K screen, visual quality matters. Use high-resolution video and clear imagery, and avoid tiny text – what might be readable on a phone could be microscopic on a TV 10 feet away. Conversely, some OTT viewing does happen on mobile or tablets. Ensure your creative is legible and effective on all screen sizes. That means using clear voiceover or captions (many viewers still look at their phones during ads – captions can help catch their eye or deliver the message even if muted, though on TV sound is usually on). If you expect a lot of mobile OTT viewers (e.g., someone watching Hulu on an iPad), keep in mind they could be holding it vertically – but generally, OTT content locks to horizontal video, so you're safe using a 16:9 aspect ratio. Test your ad on a TV screen in the office to see how it looks; you might catch lighting or color grading issues that aren't obvious on a laptop monitor.
Match the Tone to the Content/Platform: OTT platforms have different vibes. A gritty drama on Hulu might allow for a more serious, cinematic ad. A lighthearted show on a free service like Pluto might welcome a fun, snappy ad. Wherever possible, make your ad feel native to the viewing experience. For example, if you're advertising on a FAST channel that shows retro sitcoms, a nostalgic or humorous creative style might resonate. Also consider the audience mood – binge-watchers at night might react differently than news streamers in the morning. While you can't custom-tailor to every show, you can at least ensure your ad's tone aligns with the platform's general audience. And definitely keep OTT ads PG-rated unless you specifically target mature content; streaming has all ages, and you don't want to shock or offend inadvertently.
Include a Clear Call-to-Action (CTA): Just because it's on TV doesn't mean people can't act on it. Make it clear what you want viewers to do next: visit a website, scan a QR code, visit a local store, etc. Include a URL or short code on-screen. QR codes have become a popular tool: a quick QR on a TV ad can let viewers scan and go directly to an offer on their phone. If using one, mention it verbally ("Scan the QR code to…") and leave it up long enough. At minimum, have a vanity URL or memorable tagline that sticks. For example, "Visit BrandSite.com/offer" or "Call 1-800-XXX" for older audiences. A strong CTA can dramatically improve the measurable impact of an OTT ad.
Leverage Storytelling – But Front-Load the Value: Storytelling in video is powerful, but with short ads, you don't have time for a full narrative arc. Instead, use smart editing and storytelling techniques to get your message across quickly. One approach is the "AIDA" model compressed: Grab Attention (hook in first seconds), build interest (show product or problem-solution), drive Desire (benefits, maybe a quick testimonial or demo), then prompt Action (CTA). Another tip: show the product or brand in the first few seconds – don't wait till the end to reveal who you are. Many OTT advertisers ensure the brand logo or name appears early (even if subtly). Because OTT viewers are often multitasking, repeating the brand name or showing it throughout can aid recall.
Avoid Creative Fatigue & Repetition: If a viewer is binge-watching, they might see your commercial multiple times. Nothing irks viewers more than the exact same ad every break (we've all been there!). If the budget allows, prepare multiple creative variations to rotate. Even a slight change (different opening, alternate tagline, or swapping visuals) can reduce ad fatigue. Many platforms support creative rotation or even sequential messaging (show Ad A first, then Ad B later). This not only prevents annoyance but can improve conversion by telling a bit more each time. If you only have one asset, at least set frequency caps in your buys (like max two impressions per hour). We'll revisit the frequency of pitfalls, but it starts with creative planning. Have some backup variations if possible.
Compliance and File Specs: Ensure the tech specs (file format, bitrate, dimensions) meet each platform's requirements. Most want an MP4 or .MOV in 16:9, 1920x1080, with certain file size limits. No need for super cinematic 4K – 1080p HD is standard for ads. Also, mind the safe area – keep any important text within a central frame so it doesn't get cut off on older TVs. Loudness standards (like TV commercials, OTT ads should conform to -24 LKFS average volume so they're not blaring). Platforms usually auto-adjust, but it's best to deliver compliant audio.
Creative Innovation: Consider trying the newer creative formats if they serve your goals. For example, Interactive Ads on OTT can let users use their remote to request more info, play a mini-game, or choose an ad experience. These can be highly engaging – e.g., a car brand could let viewers navigate a 360° view of a vehicle with their remote. If you have the resources, these interactive or shoppable ads (like an "Add to Cart" directly from the TV ad) are cutting-edge and can wow clients. Another trend is dynamic creative optimization (DCO) on CTV – automatically tailoring the ad (different offers, products, or messaging) based on data like location or audience segment. For instance, a retailer's ad could show the nearest store's address dynamically to different viewers. This requires integration with the platform, but it is doable with some partners.
Test and Learn: If uncertain how your creative will perform, many platforms allow A/B testing even in OTT. You can run two versions to see which gets higher completion (if skippable) or which drives more post-ad actions (visits, searches, etc.). Collect learnings and refine future ads. Because OTT is often a top-of-funnel medium, consider follow-up surveys or brand lift studies to gauge if your creative moved the needle on awareness or favorability.
In essence, treat OTT ad creative like a blend of TV and digital video best practices. It should have TV-quality production and storytelling, but digital-like brevity, branding, and CTA. And always think of the viewer's experience – you're in their living room or on their personal device, so make the ad as engaging (or at least as painless) as possible.
With a strong creative in hand, you'll need to measure its impact. Let's move to how you can measure, attribute, and prove ROAS for your OTT campaigns.
Before you launch your next OTT campaign, run through this short checklist to ensure you've covered all the bases:
Clearly Defined Goals & KPIs: Know whether the campaign is meant to drive awareness, consideration, conversions, or a mix. Set specific KPIs (reach, VCR%, site visits, CPA, ROAS, etc.) so you can measure success.
Audience Insight & Targeting Plan: Identify your target audience and how you'll reach them (demographics, interests, geo, etc.).
Platform Selection & Buying Strategy: Decide which streaming platforms to prioritize based on where your audience watches.
Budget & CPM Alignment: Set your budget aligned with expected CPMs and impression goals. Input frequency caps and pacing settings to spread the budget optimally over the campaign flight.
Creative Assets Optimized: Produce OTT-optimized video creatives (recommended 15s or 30s). Test that creative on a TV screen. Include clear branding and a call-to-action. Prepare multiple versions if possible for testing.
Tracking & Measurement Set Up: Implement Skybeam Pixel to track web conversions, website visits, etc., and verify it works.
Campaign Launch Review: Before hitting go, do a thorough QA: correct targeting applied, correct creative, budgets entered correctly, frequency cap set, dayparting scheduled (if using), and so on. It's easy to mix up a setting – double-check everything.
Monitoring & Optimization Plan: Schedule when and how you'll monitor performance. For example, plan to check key metrics after the first 2-4 days to ensure delivery is on track. Set weekly optimization meetings or reports. Know in advance what levers you can pull – for instance, "If CTR is below 0.1% by week 2, we will swap in Creative B".
Communication with Stakeholders: Keep your client or team informed about what to expect. Share the plan details – platforms, targeting, spend, and creative – so everyone is on the same page. If the client has multiple campaigns (social, search, etc.) concurrently, coordinate messaging timing (maybe align OTT launch with a big PR announcement, etc.). Also clarify reporting cadence and deliverables (e.g., "We will deliver a mid-campaign performance report and a final analysis with insights and recommendations.").
Using this checklist, you can confidently launch and manage OTT campaigns without missing critical steps. It encapsulates the major points of understanding OTT, picking platforms, targeting, budgeting, creativity, measurement, and optimization.
OTT media buying may seem complex, but with the knowledge from this guide, you're well-equipped to execute it like a pro. The future of advertising is undoubtedly streaming – more and more viewers are unreachable on linear TV but deeply engaged on OTT platforms. By leveraging OTT's targeting precision, engaging creative, and robust measurement, you can drive real results for your clients and stay ahead in the evolving media landscape.
Now go forth and conquer those OTT campaigns – your agency's clients will thank you when their ads are streaming on TVs across America, reaching the right people at the right time.
Olena Svietlova
2025-08-29 • 13 min to read