OTT Advertising: What Is It and How Does It Work?
Over the years, there has been a shift in the viewers’ television viewing habits, which has changed the science of TV ads. This change began in the 1970s when cables were used to replace linear broadcasting and have now developed to use internet-powered devices.
That’s where OTT advertising was developed, as it improved the importance of online advertising on TV. In 2020, this advertising strategy was adopted by many advertisers due to the change in consumer viewing habits. And this is a piece of good news for companies that are looking to cut TV ad costs.
So, if you want to learn about OTT advertising, how it works, and how to create it, keep reading this article.
What Is OTT Advertising?
OTT (which stands for over-the-top) is a direct transmission of TV/Video content to the internet. This benefits consumers and companies as TV/video content can be accessed without viewers subscribing to a satellite provider or traditional cable.
OTT advertising involves purchasing ad space on an online streaming video platform. These OTT ads reach their target audience as the TV/video content is viewed on internet-connected devices. Companies of various sizes have adopted OTT ads to attract their target audience uniquely.
OTT advertising is now an essential type of advert to boost your audience reach and develop frequency. Thus, OTT is just like TV advertising, but it is purchased through different means, streaming platforms, or programmatically. There are various examples of OTT advertising you can use, which can be found in the linked article.
Where Are OTT Ads Displayed?
Unlike traditional television advertising, OTT ads are displayed across many streaming platforms and devices. Virtually any internet-powered device can display an OTT ad. These devices that support OTT video content include:
- Tablets
- Smart TV/Connected TVs
- Mobile Devices
- Laptops
- Gaming Consoles.
How Are OTT Ads Delivered?
There are several distribution channels by which advertisers deliver OTT content. The various streaming media platforms have different ways of communicating with OTT devices through Video Player-Ad Interface Definition (VPAID) or Video Ad Serving Template (VAST) tags. The standard method of delivering OTT ads by advertisers:
Audience Creation: OTT audiences are created based on the number of subscribers, including first and third-party data. This data can include the most preferred shows viewed by the audience and the categories viewers watch.
Audience Matching: the ad campaign is then pushed. The platform matches an audience to the list of TV subscribers on several OTT platforms.
Ads Display Via OTT Devices: tags such as VAST and VPAID are used to communicate with OTT devices, depending on the streaming platform.
Reporting: The OTT operator sends an ad-exposure result back after the platform has generated a campaign report. Included in the advertiser report is the first and third-party data.
OTT Ad-Insertion Methods
There are two primary ad-insertion methods used for delivery purposes, served client-side (CSAI) and server-side (SSAI).
CSAI
The client-side ad insertion is a legacy method in which many ads are loaded in the OTT box before the content is shown to the audience. Though this ad-insertion method is vulnerable to an ad blocker and is not ideal, it is still the most used method in OTT platforms among advertisers.
SSAI
The server-side ad-insertion method involves ads delivered as a seamless stream with visual content. In this method, ads are mixed up with video content, given in real-time frame-by-frame without interrupting the audience.
Unlike CSAI, SSAI is not vulnerable to ad blockers. Ad blockers find it challenging to distinguish which frame is the leading video content and which are ads. SSAI is an effective method against ad blockers software. But there is a process that limits advertisers known as “stitching.” CSAI remains the most used ad-insertion method in the advertising industry.
How to Create an OTT Advertising Campaign
Research Ad Platforms
Firstly, research platforms that provide OTT ads or CTV ads. When you have found the best fit for your business criteria for quality ad placement, compare their prices and ability to reach targeted audiences.
Check the Creatives the Platforms Offers
Various companies provide creative setups, some of which include videos, media ads, and banners. The creative sometimes depends on your budget, as a five-second online video ad will cost your business less than a longer-duration option.
Focus Audience Targeting
Your targeting has to be set, so you will only show your ads to people who have business with your products or services. Boxing your audience with targeting can help your business increase conversion rate and decrease the cost of the ad.
Analyze
Ensure you use in-built OTT platform tools to generate results and analyze things that function and those that don’t.
Limit Frequency
This can reduce the amount you spend on the OTT ad. Platforms such as programmatic allow advertisers to limit the number of times the ad is shown to viewers daily. So this will reduce irritation by viewers.
How Are OTT Ads Purchased?
You can buy OTT advertising programmatically or directly from streaming providers or resellers. Streaming providers offer deals for ad placement now to advertising agencies and agents. And the ad agencies and agents can choose how, when, and where their ads are displayed.
OTT ads resellers are known as middlemen who sell streaming ad space pre-purchased from streaming providers. They also get access to OTT ad space through auction-based ad exchanges.
Buying an OTT ad space programmatically involves advertisers purchasing ad space without having any significant obligation to the streaming providers. There are two main currencies used to buy an OTT ad space, either you are buying from a reseller or programmatically:
- Cost per mile, otherwise referred to as cost per thousand impressions.
- Cost per completed view. Advertisers are charged when a viewer watches the content.
Conclusion
OTT advertising offers a variety of opportunities. It grants advertising agencies and companies a new method to reach targeted audiences.
Suppose your business urgently needs a cutting-edge advertising strategy to reach its audience. In that case, an OTT advertising campaign is your best bet. Its increasing popularity in the advertising industry shows its potential and how lucrative it is for businesses and advertising agencies.
