The OTT (over the top) media market hit an estimated $31.1 billion in the U.S. alone in 2021.
Program television's dominance has given way to the rein of OTT, and marketing approaches are changing with it.
T.V. commercials used to be scattered, often not finding the audience they are aiming to hit. Just ask a child whose Power Rangers viewing experience was ever interrupted by an ad for cholesterol medication.
Marketing the old way wasn't just guilty of missing the target, it was also limiting for small businesses.
At Easybins, we've created some successful bootstrapped and lower funnel marketing playbooks, but as we start to look at ways to attack the top of the funnel, OTT starts making more sense. With programmatic ad buying now a mainstay in most media plans, OTT is an attractive option for brands looking to reach audiences across screens.
The average American watches around five hours of live and time-shifted television per day, but that number jumps to nine hours when you include OTT viewership.
That's a lot of potential eyeballs that marketers can't afford to ignore, especially as OTT continues to grow in popularity.
What is OTT?
OTT advertising is video or audio content delivered through the internet, bypassing traditional cable and broadcasting models. OTT can be accessed on devices like smart TVs, gaming consoles, streaming boxes, and mobile phones.
No broadcasting services, no facilitatory corporations, nothing standing between the customer and the media service.
It is no longer necessary to ruin some poor kid's day with irrelevant, boring ads.
How are OTT ads delivered?
Delivered ads on YouTube require consideration of the way that the streaming platform interacts with the mobile device through Video Advertisement Serving templates or Video Player Ad Interface definitions (VPAID). OTT advertisements generally have two main delivery processes: An audience can be created: An OTT audience can be created from a subscription database but can sometimes be enhanced by additional household data. It may also contain first and third-party information — for example, users' favorite categories or specific shows that they watch on a platform.
OTT Ad-Insertion Methods
There are two main methods here, and even though this gets a bit into the technical weeds it actually does matter to marketers and media buyers. Client-Side Ad Insertion (CSAI) is the more popular method, but deliverability can be a problem when consumers are using ad blockers.
The other method is Server-Side Ad Insertion (SSAI), this method seems to be less common because of the technical complexity, but it delivers the ads in one stream with the content. Meaning it's impossible to block.
Tags used to communicate with OTT devices
There are three types of tags that OTT devices use:
- MAST (Media Asset Streaming Tags) for live streaming and DASH (Dynamic Adaptive Streaming over Hypertext Transfer Protocol) for VOD
- Apple HLS or MPEG-DASH
- Microsoft Smooth Streaming. OTT providers generally use one of the first two.
Advantages of Server-Side Ad Insertion in OTT
- OTT content is still a growing market, so there are fewer OTT ad blockers than traditional web browsers.
- Two OTT devices in the same household can be targeted differently with SSAI technology.
OTT Ad Placement and Measurement Solutions
The OTT platform is taking over, but that doesn't mean that OTT
What is the impact of OTT Ads?
OTT advertising has a significant impact on consumers' decision-making processes. OTT ads are effective in different ways than traditional television commercials, which rely heavily on branding and storytelling to create awareness. OTT advertisements are more informative and educational because they provide direct information about products or services that viewers can access immediately by clicking the link.
A study by the Video Advertising Bureau found that OTT viewers are more likely to take action after watching an ad than those who view ads on traditional television. OTT viewers are also more likely to recall the brand or product featured in the commercial.
Traditional TV advertising is no longer as effective as it once was, and OTT advertising provides a unique opportunity for brands to reach OTT audiences at scale. OTT advertising is becoming a growing option for targeted top-of-funnel advertising, and right now is a unique moment for marketers to leverage the opportunity.
OTT usage statistics
According to a study by Ooyala, the average American spends more than five hours watching traditional television content each day. That number drops down to just under four hours when you exclude broadcast news and children's programming. But that number jumps up to nine hours when you include OTT viewership.
That's a lot of potential eyeballs that marketers and media buyers can't afford to ignore.
What is the difference between OTT and IPTV?
OTT is the delivery of video content over the internet and OTT services include YouTube, Netflix, Hulu, Amazon Prime Video, etc. IPTV refers to an Internet-based TV service that allows users to watch all types of media (movies and television shows) on demand. OTT and IPTV are similar in that they both use the internet, but OTT is more focused on delivering media using a streaming service.
Current Status of OTT advertising
OTT advertising is still in its early days, and there are a few things that need to be worked out. For example, measurement and verification of OTT ad campaigns can be difficult because of the number of different platforms and devices that are used. But as OTT continues to grow in popularity, these issues will likely be resolved.
In the meantime, OTT advertising presents a unique opportunity for marketers and media buyers to reach OTT audiences at scale. OTT is becoming a growing option for targeted top-of-funnel advertising, and it's important that you stay ahead of the curve by adding OTT to your media mix now.
OTT is the only viable alternative to traditional TV commercials
OTT has become a vital revenue stream for many traditional TV networks, which is why we’re seeing more OTT advertising options pop up. Today OTT reaches over 60% of US households, and that number continues to grow as OTT consumption increases among all age groups (not just the younger generations). OTT advertising is growing quickly because it’s the only viable alternative to traditional TV commercials.
Plus, OTT gives you a lot of targeting options that just aren’t available with linear TV. You can target by device, operating system, app usage, age and gender, interests, and more. OTT also offers very precise location targeting, down to the zip code level. That’s something you just can’t do with linear TV.
Best of both worlds
OTT is the best of both worlds. OTT ads provide a lot more flexibility and targeting options than linear TV, but OTT advertising doesn’t suffer from the same inventory issues you find with digital display or paid social. OTT ad inventory is abundant, making OTT even more attractive to advertisers looking for reach in their media mix at a reasonable cost. OTT is growing because OTT doesn’t cannibalize TV budgets like a digital display and paid social do, but it gives advertisers the kind of targeting options they are used to with those channels.
OTT advertising is now table stakes for any marketer who wants their ads to be seen by consumers on connected TVs.
Bigger screen, wider audience
In addition to all of the targeting options, OTT advertising also offers a bigger screen and a wider audience. OTT consumption is growing quickly because it’s an immersive experience that can’t be matched by any other channel. OTT gives you the chance to reach consumers when they are engaged and attentive, which is why more and more marketers are adding OTT advertising to their media mix.
Benefits of Over the Top Advertising
Viable Complement To Your Overall Media Mix
OTT advertising is becoming a viable complement to your overall media mix. Many marketers and media buyers are still unsure of how OTT advertising works and what its benefits are. OTT, or Over the Top, advertising is the term used for video advertisements delivered through streaming services like Netflix, Hulu, and Amazon Prime Video.
Compared to traditional television advertising, OTT advertising offers a more targeted approach. Advertisers can specifically target their desired demographic by choosing the streaming service they want to advertise on, and then further targeting viewers based on factors like age, gender, location, and interests. OTT advertising is also a great way to reach viewers who have already opted-in to watching commercials.
Increased Engagement and Recall
OTT advertising also offers increased engagement and recall. OTT ads have an average click-through rate of 0.84%, which is significantly higher than the average CTR for online display ads (0.06%). OTT ads are also more engaging, with a median view time of 31 seconds compared to just six seconds for online video ads. OTT advertising also offers a higher recall rate than OOH or radio at 65%, compared to just 36% and 38%.
Strong audience targeting opportunities
OTT ads are becoming an increasingly popular option for targeted top of funnel advertising, which gives OTT the edge when it comes to audience targeting opportunities. OTT allows brands and marketers more flexibility with how they target their audiences based on factors like age, gender, location and interests. OTT also offers more options for how your brand will engage with viewers through OTT ads. OTT advertising is a great way to reach an audience that has already opted-in to watching commercials.
Reach audiences who have cut the cord
More than 33 million households in North America are “cord cutters”, meaning they have cancelled their cable or satellite subscription in favor of streaming services only. OTT advertising is a great way to reach these viewers who may have otherwise been unreachable through traditional television advertising.
OTT ads are more engaging and offer increased engagement and recall rates when compared to other forms of video advertising. OTT advertising is a great way to target viewers who have already opted-in to watching commercials. OTT advertising is also becoming a more viable complement to your overall media mix.
OTT appeals to a younger audience
OTT advertising also has the advantage of appealing to a younger audience. 78% of OTT viewers are 18-49 years old, which is significantly higher than the number of people who watch traditional TV (55%). OTT advertising is a great way to reach a younger demographic that is increasingly difficult to reach through traditional television advertising.
OTT advertising is becoming an increasingly popular option for targeted top of funnel advertising, which gives OTT the edge when it comes to audience targeting opportunities.
Cheaper than traditional broadcasting
OTT advertising is also more affordable than traditional broadcasting. OTT ads are less expensive to produce, and OTT platforms offer more flexibility for shorter ad spot lengths with OTT ads ranging from six seconds to 30 minutes.
OTT advertising is becoming a viable complement to your overall media mix. OTT advertising has the added benefit of appealing to a
One of the main advantages of OTT advertising is the ability to track viewer engagement through powerful analytics tools. OTT platforms offer detailed insights into how viewers are engaging with your ad, including information like how long they watched it for, where they were when they watched it, and what devices they were using. This information can help you optimize your OTT advertising strategy and make sure you’re reaching your target audience.
OTT platforms also offer attribution tools that can help you measure the effectiveness of your OTT advertising campaigns. Attribution tools track how viewers interact with your ad and then assign a value to those interactions. This information can help you determine whether or not OTT advertising is benefiting your business and provides insights into which aspects of your campaign are most effective.
Advanced marketing attribution techniques can help to further optimize your OTT advertising campaigns. By pairing OTT advertising with sophisticated attribution modeling, you can gain a deeper understanding of how different marketing channels work together to drive sales and ROI.
Attribution modeling can help you to understand the role of each marketing channel in driving conversions and sales. By assigning a value to each marketing interaction, you can get a better idea of which channels are most effective at driving ROI. This information can then be used to allocate your budget more effectively across different marketing channels.
Flexibility in budget
OTT advertising also offers flexibility in budget and length. OTT platforms offer more flexibility for shorter ad spot lengths, with OTT ads ranging from six seconds to 30 minutes. OTT advertising is also a more affordable option than traditional broadcasting, making it a great choice for businesses of all sizes.
Micro & Geotargeting
Micro and geotargeting are two of the most important features of OTT advertising. With microtargeting, you can target your ads to very specific demographics, making sure that you're reaching the people who are most likely to be interested in what you have to offer. Geotargeting allows you to target people based on their location, so you can make sure that your ads are being seen by people in the right area. These two features make OTT advertising a very powerful tool for reaching your target audience.
Larger audience. Reach
Media buyers should always be looking for ways to reach the largest possible audience. OTT advertising is a great way to do that, as it allows you to target viewers who are watching TV on their smart TVs or connected TVs. OTT advertising reaches a large audience and provides an opportunity for marketers to reach people who are already engaged with media. That's why it's such an important part of any media mix.
Non-skippable ads & high watch rates
OTT advertising also offers the advantage of non-skippable ads. Viewers can't just skip past your ad like they can with traditional online advertising. This means that your ad has a better chance of being seen and heard. In fact, OTT advertising has some of the highest watch rates out there, so it's a great way to get your message across. OTT advertising has become a powerful way for marketers and media buyers to reach their target audience.
OTT advertising also offers the ability to include audio. This can be a great way to connect with viewers and really capture their attention. Audio can help to create an immersive experience that engages viewers and makes them more likely to remember your ad.
How to Buy OTT Ads
There are a few different ways to buy OTT advertising. You can work with an agency, an OTT provider directly, or you can use a programmatic buying platform that supports OTT inventory.
Working with an Agency for OTT Broadcasting
This one is probably the easiest and most straightforward buying method. Agencies or media buyers can broker connections between SMBs and popular streaming services, while also providing valuable data, tracking results, and helping SMBs adjust their marketing strategy accordingly.
Also, agencies are often more comprehensive, helping SMBs run ad campaigns on social media, develop B2B marketing relationships, and more. The downside is that this can cost a more money, but this can take some of the risk out of the investment and also provide some other tangible benefits like optimizing the delivery and creative.
Working with A Publisher
Publishers differ from agencies in that they can help your content get on various OTT media services but don’t necessarily offer the full-service strategy and marketing plan of an agency. Some publishers are full-service and double as an agency, but if you elect to use just their publishing services, you will be responsible for your broader marketing plan. The main thing publishers offer is their Rolodex; so, make sure they can give you a clear picture of their connections and portfolio upfront.
Sometimes, publishers will take their cut or most of it off the back end. This can make it easier for SMB’s needing to line their pockets a bit before paying for ads.
How to serve OTT ads programmatically?
By using a programmatic buying platform that supports OTT inventory, you can reach exactly the right audience with your advertising message. Programmatic platforms make it easy to target OTT viewers based on their demographics, interests, and behaviors.
Plus, programmatic buying allows for real-time auction bidding, so OTT advertisers can get the inventory they need at a great price.
A programmatic OTT ad platform allows you to reach OTT viewers with your advertising message in real-time and for less money than other OTT buying methods.
Transactional video on demand (TVOD)
TVOD is a type of OTT service that allows viewers to purchase or rent individual video content items, such as movies and TV shows.
Premium video on demand (PVOD)
PVOD is a type of OTT service that allows viewers to purchase access to all the content in a streaming media library, usually for a monthly subscription fee.
Challenges of OTT Advertising
OTT Ad Targeting
One of the biggest OTT advertising challenges is OTT ad targeting. OTT viewers are notoriously difficult to target because OTT viewing habits are hard to track. OTT advertisers must rely on third-party data and platform analytics, which can make it challenging for them to reach their target audience with an effective message.
OTT Ad Spend
Another challenge for OTT advertisers is the high cost of OTT ad inventory. Because OTT viewership is growing so rapidly, the demand for OTT ad space has outstripped the supply. This has driven up the prices for OTT ad inventory, making it difficult for some advertisers to justify spending their advertising budget on OTT ad space.
OTT Ad Attribution
Another OTT advertising challenge is OTT ad attribution. OTT ads are served in a variety of formats, including pre-roll, mid-roll, and post-roll ads. Given the difficulty of tracking OTT viewers, it can be challenging for advertisers to know if their OTT ads are actually driving any results.
Getting Started With OTT Advertising
OTT advertising is a great way for OTT advertisers to reach OTT viewers with their advertising messages and generate brand awareness. OTT ad inventory is growing rapidly, so now is the perfect time for OTT advertisers to start buying OTT ads before prices skyrocket as they did with CTV ads.
Creating A Strategy for OTT Advertising
Before you start buying OTT ad inventory, it’s important to create a strategy for how you will use OTT advertising in your media mix. Here are some things to consider when creating your OTT advertising strategy:
- What is your target audience?
- What type of content do you want to advertise?
- What type of OTT ad format is right for your brand?
- What OTT advertising platform will you use to buy OTT ads?
- How much OTT ad inventory do you want to purchase?
Choosing Your OTT Ad Platforms & Partnerships
Now that you’ve decided how OTT advertising will fit into your overall marketing strategy, it’s time to choose your OTT ad platforms and partnerships. There are a variety of OTT ad platforms available, so it’s important to do your research to find the one that best meets your needs.
See the chart above that I used to decide which OTT ad platform to use.
Remember that not all OTT ad platforms are created equal, so be sure to ask the right questions to find the platform that is best for you.
OTT advertising is becoming a growing option for targeted top-of-funnel advertising, and right now is a unique moment for marketers to leverage the opportunity. OTT ad inventory is growing rapidly, so now is the perfect time for OTT advertisers to start buying OTT ads before prices skyrocket as they did with CTV ads. Before you start buying OTT ad inventory, it’s important to create a strategy for how you will use OTT advertising in your media mix.
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