What's a good CPM for OTT?

Lauren Ridgley
Nov 4, 2024
3 min read

One of our most frequently asked questions from clients is "what's a good CPM for OTT?"

My answer is usually diplomatic.

But, the correct answer is, "you're asking the wrong first question about OTT."

If you are comparing OTT vendors, the most important metric isn't a number like CPM.

Don't get me wrong, CPM matters, but OTT success hinges on where your ads run and who they reach. Premium inventory with precise targeting almost always outperforms cheap impressions.

So before you compare price, compare inventory quality and audience quality.

OTT vendor comparison: inventory + audience quality

Recently, we reviewed our inventory against a leading OTT vendor and here is a snapshot of how things stacked up:

Vendor comparison for OTT chart with two sections: Vendor XYZ and Left Hand Agency. Details include inventory source, audience, and CPM type. — OTT vendor comparison: inventory source, audience options, and CPM model.

Here's a deeper dive into that graphic:

Vendor XYZ
- Primary Inventory Source: ~45% FAST (ex: Pluto, Tubi, Roku Channel)
- Audience: Demo-only
- CPM: Fixed
Left Hand Agency
- Primary Inventory Source: ~16.75% FAST (Premium Inventory (non FAST) like Peacock, Paramount+, Spectrum, HBOMax, and DirecTV were in our top 10 list.)
- Audience: Custom (built per advertiser + campaign to maximize likelihood of conversion)
- CPM: Dynamic (we estimate up front)

Why it matters: A lower “good CPM for OTT” on paper often reflects heavier FAST usage, weaker controls, and fewer optimizations—not better results.

FAST vs. AVOD: why inventory mix matters when determining a "good CPM for OTT"

FAST (Free Ad-Supported Streaming TV)

Big reach and lower CPMs
Typically more ad minutes per hour (often up to ~10 minutes), creating lower share of voice
Limited targeting and weaker brand-safety controls
Reporting/analytics can be less robust → harder to prove impact

AVOD (Ad-Supported Video on Demand)

Fewer/shorter ad breaks (~4–6 minutes per hour), so higher share of voice
Stronger targeting, frequency caps, and brand-safety controls
Often more premium audiences and stronger engagement
Usually higher CPMs than FAST, and often higher return

Takeaway: If you’re defining a good CPM for OTT, factor in share of voice, engagement, and brand suitability—not just the price tag.

Now, there is nothing wrong with some FAST channel inventory, but it should not account for half of your inventory.

Audience strategy: demo-only vs. custom audiences

Demo-only buying leaves performance on the table. We build custom audiences per campaign (e.g., shopper behaviors, category intenders, geo + retail proximity, and more) to push delivery toward likely converters. This typically yields better efficiency—even if the CPM isn’t the absolute lowest.

Dayparting: a silent driver of OTT performance

Some vendors forbid dayparting or charge more for it. We don’t. A spot at 8 pm is far more memorable than the same impression at 4 am. Control your schedule and you’ll often redefine what a good CPM for OTT looks like after results roll in.

Fixed CPM vs. dynamic CPM

A fixed CPM can incentivize vendors to buy the cheapest inventory to protect their margin. Our dynamic CPM approach passes savings back to advertisers when market conditions allow without downgrading quality.

“We don’t buy the open exchange” ≠ guaranteed quality

You can still end up with heavy FAST inventory via programmatic supply paths. The safeguard isn’t the buying method, it’s curating premium apps and monitoring your top-10 inventory sources.

So…what is a good CPM for OTT?

A good CPM for OTT is the price you pay for premium, well-targeted impressions that hit your daypart goals and drive measurable outcomes. In other words: the CPM that supports brand safety, reach quality, and results—not just a low number.