What Is OTT Advertising? OTT advertising is a relatively new phenomenon, and many marketers are still unsure of how to use it effectively.
With OTT you can target your audience directly within their living rooms. This means that you no longer have to worry about the clutter on TV or digital ads being viewed alongside your content.
The best thing about OTT advertising is its performance-based targeting options, which allow for unparalleled precision in reaching your desired audience. Unlike other forms of media, such as print or outdoor ads, with streaming platforms like Hulu and Netflix, brands can now run campaigns based on specific demographics (age range), interests (sports fans) or behaviors (binge watching). These highly targeted ad units will help increase the effectiveness of your campaign while also increasing ROI because they require less money spent per impressions to drive results.
- 1 What is OTT Advertising?
- 2 Why Brands Are Investing In OTT Video?
- 3 Where OTT Ads Display?
- 4 OTT Advertising Platforms
- 5 OTT Advertising Costs
- 6 How Do You Buy OTT Ads?
- 7 Challenges of OTT Advertising
- 8 OTT Video Content Best Practices
- 9 What Does The Future Look Like For Advertisers?
- 10 What Is Next?
What is OTT Advertising?
OTT, which stands for over the top, is a phrase that describes services such as Netflix and Amazon Prime Video. TV viewers can stream content from these OTT providers directly to their TV with apps like netflix and Amazon prime video without requiring an internet connection or streaming device (e.g Firestick or Roku). OTT advertising is simply the
Why Brands Are Investing In OTT Video?
OTT video has gone mainstream in recent years
OTT video viewership is experiencing a boom in nearly every market globally. The following number of people who actively stream this type of content has also increased:
- In the US, 58% of adults stream videos from OTT providers
- In Germany, 70% report using OTT video content regularly.
- In Japan, over half of young viewers watch online videos every day. In China alone, 98 percent of all smartphone users have OTT apps installed on multiple devices. The rapid growth of smartphones and mobile devices has driven the popularity of OTT video platforms.
OTT advertising is simply the method of promoting products and services directly to your target audience, whether through pre-rolls, banners, or native ads. Advertisers can buy ad slots within live videos, on-demand content (e.g movies), or on social media websites like YouTube or Facebook. With the recent rise in popularity of OTT, this form of digital advertising has become a much more viable option for brands that were previously limited to traditional broadcast advertising.
OTT video is a channel that can meet a wide variety of marketing and sales initiatives.
Marketing initiatives of OTT advertising include:
- Audience targeting – OTT provides the ability to target an audience that you know is interested in your product or service. For example, if a baby goods brand wants to reach women who are expecting a child, an OTT ad delivered on-demand video content can do just that.
- Cross-platform promotion – Since OTT operates across multiple devices, the adverts that you create can be served to a variety of consumers. Brands can use this capability to reach people who are watching on laptops, TVs, and mobile phones.
- Targeting consumers at specific moments – Because brands can serve ads based on location or demographics they have insight into what viewers are watching and
- Personalization – Viewers are able to skip an ad after 5 seconds. However, if they choose not to skip the ad then the brand has the opportunity to create a more personal experience for them. For example, McDonald’s recently released their ‘Lovin’ Beats Hating’ campaign where viewers were encouraged to submit ‘Lovin” messages through social media
Where OTT Ads Display?
Over-the-top content can be viewed on a wide variety of devices and streaming services—all of which support advertising.. This includes smart TVs (which can also be watched on-demand), PCs, mobile devices, and tablets. Common OTT platforms include:
- Smart TVs – For those who prefer to watch TV content through their set-top box, apps like Netflix and Hulu allow advertisers to serve video ads directly on the home screen or during other commercial breaks.
- Streaming Services – Companies like Netflix, Hulu, and Amazon Prime Video are the most popular streaming services. However, other companies that provide internet-based content include Crackle, Mubi, and Pluto TV.
- Mobile Devices – Brands are also advertising on live mobile video apps which can be accessed through smartphones or tablets. These include Facebook Live videos as well as live video streaming apps like Periscope and Meerkat.
- PCs – When it comes to accessing OTT content through a computer, brands can advertise on social media sites such as YouTube and Facebook which both support pre-roll ads.
OTT Advertising Platforms
Platforms that can be used to deliver OTT advertisements include:
TV Networks – Video advertising is the most effective way for many brands to advertise on TV. This is because it offers them a captive audience who are unlikely to switch channels during commercial breaks. The networks which offer this type of content are typically free-to-air, so prices for OTT advertising placements tend to be lower than other TV options.
Video Networks – Not all video content needs to be broadcast through a television set, and there are also companies that specialize in broadcasting videos over IP networks. For example, YuMe works with brands like Johnson & Johnson and Volkswagen to deliver their ads on internet-based channels such as YouTube.
OTT Advertising Costs
OTT adverts can be bought through a range of different companies, including traditional TV networks and online video channels. Costs vary depending on many factors, including the network or platform you choose to advertise with and the size of your target audience. For example, a study conducted by Nielsen found that average CPMs for OTT ads were $25.10.
How Do You Buy OTT Ads?
Advertising on OTT platforms can be accessed through multiple companies, including traditional TV broadcasters and online video networks. Online ad networks that are most commonly used to deliver OTT ads include AOL, Brightroll, Hulu, JW Player, LiveRail, SpotXchange, and YuMe.
Traditional TV networks can also advertise on over-the-top platforms including ABC, The CW Network, Comcast, FOX, and NBC. These companies provide their OTT advertising inventory through an ad sales team or through a specialist company like Alphonso which specializes in delivering ads for brands that operate across multiple devices.
Challenges of OTT Advertising
One challenge that brands face when advertising on OTT content is viewability. It’s not always clear whether an ad has been viewed by consumers, but this information can be used to negotiate the cost of an OTT campaign. A Nielsen study found that nearly half (44%) of video ads are never seen by viewers, with 14% being watched for less than one second.
To counteract this, the IAB has drafted standards for viewability which are currently being discussed by its members. They include ensuring that an ad is at least 50% on-screen for two continuous seconds and allowing consumers to skip ads after five seconds (or three seconds if the viewer does not engage with it).
OTT Video Content Best Practices
Even if you choose to work with an ad network, it’s also important that you understand the best practices for creating video content. This includes:
- Keep ads short – Shorter videos are more likely to be viewed than longer ones (6-10 seconds vs. 15-20 seconds). Also, shorter videos get higher skip rates, according to a study conducted by runtastic.com.
- Target ads based on geography – In addition to targeting by demographic, you should also consider tailoring your video content for specific geographies, since some ad networks only offer regional OTT advertising opportunities.
- Include a call-to-action – Even if viewers don’t opt into a subscription, you should always include a call-to-action that will encourage them to visit your site or download your app.
- Be aware of data caps – Not all OTT platforms allow you to track data about the performance of your video ad, so it’s important to find out what information is available before you invest in an advertising campaign.
What Does The Future Look Like For Advertisers?
In many ways, OTT video is evolving into a hybrid between broadcast and online video streaming services. Live events are naturally a good fit for OTT advertising. Brands can join the audience that is watching their favorite team or concert in real-time while simultaneously reaching potential customers who are interested in this type of live event.
In addition, multiple screens and online connectivity create many more opportunities to reach viewers with interactive ads. The device you choose to watch videos doesn’t define your demographic anymore.
Here are some examples of how brands can use OTT ads to reach their target audience:
Brands can incorporate interactive features, such as games or product catalogs, into ads for shoppers who watch on-demand videos at home.
For instance, an ad for a fashion clothing brand could allow users wearing items from the product catalogue to virtually “try them on” before making a purchase.
Ads can also capitalize on the popularity of giant screen TV’s by targeting ads at gamers who watch content from their console, as well as users who stream videos from their mobile devices. In both cases, interactive ads that appear on these screens can help brands increase awareness and drive traffic to their websites.
What Is Next?
OTT advertising is still a new concept for many brands and marketers, who continue to seek the most effective way to reach their target audience. For advertisers looking for a simple solution with a big return, OTT represents an opportunity to put more money in your pocket by reaching more of the right people.
As OTT platforms continue to grow, brands will have more opportunities to target consumers with interactive ads that are designed to build brand awareness and drive sales. Marketers continue to experiment with new OTT advertising strategies as this form of online video consumption becomes even more mainstream in the coming years.