More people are watching shows and movies through streaming apps than ever, and that shift changes where local businesses should put their video advertising budget. Traditional TV still reaches a broad local audience, but OTT advertising (ads delivered through streaming platforms) lets local businesses target specific households and track results in ways traditional TV can't. Here's how the two compare, and when each one makes sense.
Traditional TV advertising means placing a commercial on a local broadcast or cable channel during a scheduled time slot. It still reaches a wide local audience in a single buy, and the buying process is well established, which is part of why so many local businesses have used it for years.
OTT stands for "over-the-top," meaning the ad is delivered over the internet instead of through a cable box or broadcast antenna. When someone streams a show on a smart TV, streaming stick, or app, OTT advertising is the video ad that plays before or during that content.
Note: OTT advertising and connected TV (CTV) advertising overlap, but they're not identical. CTV refers to the device the ad plays on (a connected TV), while OTT refers to how the content is delivered (streamed rather than broadcast).
Traditional TV buys are built around a broad viewing audience in a market, so a portion of every ad buy reaches people who were never going to be customers. OTT advertising narrows that down. Because it's delivered to specific devices and households, a local business can point its budget toward the audience most likely to actually respond, and spend less on impressions that don't lead anywhere.
Traditional TV usually asks for a bigger production investment and a set schedule commitment before a business ever airs a single spot.
OTT advertising tends to have a lower entry point and more flexibility to adjust the budget, timing, or targeting as a campaign runs.
That combination is a big part of why OTT advertising cost questions come up so often with local business owners: It's often the more budget-friendly way to get video ads in front of local households.
Traditional TV reporting is built around estimated reach and ratings for a broad market, which makes it hard to tie a specific ad to a specific result.
OTT advertising, because it runs through digital platforms, can report on metrics like completion rates and impressions by audience segment, giving a local business a clearer sense of whether a campaign is actually working, not just whether it aired.
For some local businesses, this isn't really an either-or decision.
Used together, they cover more of a local audience than either channel does alone.
Generally, yes. OTT advertising typically has a lower entry point and more flexible budgets than traditional TV, which requires a larger production and placement investment upfront. Exact costs depend on the market and campaign goals, so it's worth talking through specifics with a video advertising specialist.
An OTT advertising agency plans and places streaming video ads on a local business's behalf, handling audience targeting, platform selection, creative requirements, and performance reporting so the business doesn't have to manage those pieces alone.
Yes. One of the main advantages of OTT advertising over traditional TV is that budgets and schedules can flex to fit what a smaller business can spend, rather than requiring the large upfront commitment traditional TV often does.
Not necessarily. Many local businesses use OTT advertising to extend their reach to streaming households while keeping some traditional TV or radio presence for broad market awareness.