OTT advertising

What is OTT? The Advantages of OTT Advertising

In 2022 researchers predict that the revenue generated from OTT media services will exceed $83.4 billion.

Over the past decade streaming companies completely shook up the distribution method that reigned supreme for the better part of a century.

There has never been a more profitable time to take advantage of OTT advertising.

If you’re asking yourself ‘what is OTT?’, then you came to the right place.

In this article, we’ll cover everything you need to know about the media service and how you can start advertising on it today.

What is OTT?

OTT stands for an over-the-top streaming media service.

These internet-based services hop “over-the-top” of traditional programming distributors like cable, satellite, and broadcasting.

It can be accessed on a variety of devices like game systems and laptops, but it’s most popular on smart televisions, also known as CTV ads. Typically these types of services offer a combination of existing television and movie series, as well as original content.

What is CTV Advertising?

CTV or better known as connected TV is a type of media advertisement that is streamed through a connected television. Any TV that has an internet connection like a Roku TV, would be considered a CTV device. CTV refers more to the type of the device that the content would be streamed over-the-top of, rather than the content itself.

So how do OTT companies make money?

Typically through two methods:

  1. Subscribers
  2. Paid advertisements

Audiences today have a much lower tolerance for long stretches of ads. The traditional model of live commercials is steadily failing — many people don’t even stay in the room during commercials.

Many people will pay for a service like Netflix or Disney+ which offers streaming content for a subscription fee with no ads. Other companies use a combination of subscription and paid ad time. Viewers can either pay for the subscription or watch a few ads.

These over-the-top services are extremely popular. One recent study found that 71% of all internet users use an OTT service of some kind. You probably use some yourself — here are some popular OTT streaming services:

  • Apple TV+
  • Disney+
  • YouTube TV
  • FunimationNow
  • PlayStation Vue
  • Google Play Movies & TV
  • Sling TV
  • Hulu
  • Netflix
  • PlayStation Vue
  • Crunchyroll Pluto TV
  • Prime Video
  • VRV
  • DC Universe
  • iTunes
  • YouTube Premium

Why Is There a Need for OTT Advertising?

OTT advertising might seem like a minor part of the streaming services, but it holds a lot of importance for marketers.

Traditional broadcasting is failing in terms of advertising. One study found that around 27% of households no longer have cable or broadcast contracts.

Around 40% of these households completely ended their pay television service in favor of OTT programming. 60% of households never even subscribed to traditional broadcasting services in the first place.

And many of the households that do retain a television contract reduce their plan to the bare minimum services.

For advertisers, these new OTT services offer a refreshing marketing change. Traditionally, an ad tries to reach the largest demographics possible — usually at the expense of audience engagement.

Ads delivered through internet streaming services offer the ability to target more specific audience segments.

The ability to create individualized ad content dramatically increases the likelihood of making an impression. If you want to learn more about OTT advertising, then you can check out our guide here.

What are some of the Advantages of OTT Advertising?

Many of the benefits of OTT ads revolve around a positive experience for both the consumer and the advertisers. Let’s take a look at some of the main advantages of investing in OTT advertising.

Precise Audience Targeting

OTT services receive precise geographic, topic, behavioral targeting, and demographic information from their consumers. This info all makes it much easier to segment audiences. How do segmented audiences help advertisers?

If you can deliver relevant content directly to your consumers, then it gives you the freedom to make more specific content. Instead of engaging with a wide variety of people who don’t need your service, you can focus on the people who do.

Flexible Ad Insertion Methods

With OTT services you not set to one commercial strategy. If you find your strategy is ineffective, then it’s easy to replace it with a new creative insertion with minimum loss.

Broad Reach to Users

The most compelling reason for advertisers to pay attention to OTT content is the volume of people using the services.

820 million video devices use the services and the number is only going to continue to grow. If you want to reach the current largest segment of media consumers, then invest in internet streaming marketing.

Strong Data Analysis

It’s important to measure the effectiveness of ad campaigns. Many OTT services provide helpful data analytics regarding the people who saw your ad and how they responded.

If you use this information effectively, then you can make an even more engaging commercial strategy with your next campaign.

Stream on Multiple Devices

Traditional broadcast methods are limited to the television. This means that most of your ads aren’t making it beyond the living room.

Since OTT services use the internet, viewers can watch content on their smartphones, tablets, laptops, video game consoles, streaming boxes, and HDMI supported devices.

The ability to stream on multiple devices increases the amount of time individuals spend watching. This also increases exposure to advertisements.

Great Creative Video

It’s never been easier (or cheaper) to create great video content. OTT ads give your business the ability to present specific ideas to a ready audience.

Advertisers that take advantage of the same creativity present in the OTT content will find it clicks with audiences. Some video platforms like YouTube let you create video content directly on your account.

If you use this OTT provider, then you can significantly increase exposure to your business. Check out our five reasons why you need a YouTube channel.

What are Some of the Disadvantages of OTT Advertising?

Unfortunately, over-the-top internet streaming services are still relatively new, which means they come with some problems. Here are some of the main disadvantages of advertising on OTT services.

Lacks Functionality of an Internet Browser

When you run a web browser it collects all types of helpful search history data through things like cookies.

Unfortunately, many OTT services lack the functionality that comes with the browsers. While many streaming services do provide metrics of some type, this flaw severely limits their potential in terms of targeted advertisements.

Few Advertisement Regulations

Since OTT service is new, there are very few current regulations placed on them. This fact means that there is no way to screen for the quality of the ads being run.

Ad fraud is a huge problem for these types of services — especially YouTube. If one ad leaves a bad impression, then it’s easy for your ad to get grouped with it in terms of quality.

Difficult to Obtain Measurements

OTT services provide some data analytics, but they also withhold a lot of them too. For example, you cannot measure the success of OTT ads through useful click-throughs.

Since there are few regulations in place on these internet streaming services, you’re at the mercy of your OTT provider in terms of what types of measurements you receive.

Some smaller providers may try and make it seem like there’s more traffic than there is.

Limited Inventory

As of now, many of the big players in OTT deliver either ad-less content, like Netflix, or their ads, like HBO. In many cases, you are limited from some of the larger percentages of streaming users.

How Do Most OTT Ad Campaigns Work?

You can break down most OTT ad campaigns into four simple steps — we’ll walk you through them.

1. Create an Audience

First things first: you need to know who you’re targeting. This means creating an ideal audience who uses the service and then finding them.

Once you picture your ideal consumer, it’s time to research which OTT services offer access to this market.

Generally, you will want to consult with the OTT service so you can access data about who watches certain videos related to your business strategy.

2. Start the Campaign

This step involves filming the content and pushing it with the OTT service of your choice. This step can vary depending on what OTT service you go through. For example, YouTube comes with a less regulated process than Hulu.

This process involves negotiating and sending the content over to the OTT service. They’re then in charge of downloading it and protecting it during the ad campaign.

3. Ads Play on the Service

At this point, the ads are delivered to the audience through the OTT player.

You give the OTT player instructions on how to play through tags like the Video Player-Ad Interface Definition (VPAID) tag or the Video Ad Serving Template (VAST).

The VPAID communicates how the ad will be displayed and where the portal will send them. It also contains the length of the commercial and determines whether or not it will be skippable.

The VAST tag deals more with interactivity. They encourage active over passive ad experiences and contain additional view ability measures.

4. Analysis

Advertisers need to know whether or not their ad was helpful. Information from the ad campaign can help them decide whether the content needs any tweaking, or if it’s still a good investment for their budget.

Ad exposure reports give a good idea about the kind of reach an ad generated.

OTT Ad Insertion Methods

There are two types of ways you can insert your OTT ads into videos: Client-side Ad Insertion (CSAI) and Server-side Ad Insertion (SSAI)

Client-side Ad Insertion (CSAI)

Client-side Ad Insertion is the more traditional method. It involves the advertiser inputting the add directly into the OTT box where it waits for the viewer.

Even though most video ads get inserted this way it does come with some problems. It’s vulnerable to both hackers and ad-block on the browser. They also display lower video quality because the content is interrupted by the ad.

Server-side Ad Insertion (SSAI) or Stitching

Server-side Ad Insertion offers a more intuitive insertion method than the CSAI in terms of ad-block. The SSAI bypasses the problem by displaying a rotating list of ads and core content frame-by-frame.

This real-time exposure makes it difficult for ad blockers to figure out which frame is an ad and which ones not.

Server-side Ad Insertion also works much better on live streaming programs like sports. It doesn’t cause the actual even to lag after the ad plays.

How to Make Money Off Advertisers on an OTT Platform

YouTube serves as a great OTT platform for connecting video channels seamlessly to advertisers. Whether you’re an individual or business, you can make money off of YouTube sponsorships.

Sponsorships allow people to pay a monthly cost for premium content provided by you. The subscription does cost $.95 per month, but you get to keep 70% of the profit. YouTube keeps the remaining 30%.

However, only relatively popular channels can qualify for sponsorship. If your channel has over 30,000 subscribers, then you can start the process.

For tips on how to grow your channel into a YouTube sponsorship, you can check out our link here.

The Importance of SEO Consulting in OTT Ads

We hope this article helped you answer the question ‘what is OTT advertising?’. You should keep in mind that over-the-top advertising is one step of an online marketing strategy.

If it’s your only component in your marketing strategy, then you may be disappointed. Ads help you gain brand exposure, but people still need to find you. That’s where search engine optimization comes into play.

SEO strategies ensure that your website comes up when people search for you or your services. If someone sees your OTT ad, then they can type your business name into Google and get instant results.

SEO campaigns are also extremely effective at gathering target information about your audience base. You can then use this information on your OTT ads.

However, you still require an SEO consulting company that understands the ins and outs of the system.

Go Florida SEO is your solution.

We walk you through everything you need to know including PPC campaigns. These campaigns guarantee traffic toward your site. If you need help with SEO or web marketing, then you can contact Go Florida SEO by visiting this page here.