What is OTT Advertising? - Nummero

What is OTT Advertising?

The world of OTT is both nearby and far away.
On the one hand, we’re all too acquainted with Netflix and YouTube, and we either own or know someone who has a smart TV or a Roku.
On the other hand, we (or at least the majority of us) have no notion of what OTT stands for.
But don’t worry, I’ve prepared this tutorial to help you with that.

What is OTT?

OTT is an abbreviation meaning “over the top.”
And here is why.
So the correct word for a cable box is a set-top box.
Because they used to sit on top of the TV when TVs were giant clunkers and cable boxes were little.
Even after displays became flat and cable boxes were relocated, the name “set-top box” persisted.
Streamed material, on the other hand, is provided via the internet and does not require a cable box.
It goes around or above set-top boxes.
As a result, the word “over-the-top” was coined.

Is OTT the same as connected TV?

The terms over-the-top (OTT) and connected television (CTV) are not interchangeable.
CTVs are only one type of device that can play OTT media.

OTT devices

An OTT device is essentially any gadget that shows video and connects to the internet.
This includes the following:

  • Smartphones, desktops, tablets, and laptops are all examples of electronic devices.
  • Televisions that are linked
  • Smart televisions (Apple TV, Amazon Fire TV, Android TV).
  • Regular televisions that use a device (Roku, Amazon Fire TV Stick, Chromecast).
  • Gaming consoles are used on regular televisions.
  • Blue-ray players with WiFi.

What are OTT services?

The apps that broadcast over-the-top content to your smartphone are known as OTT services.
There are several OTT services and applications available, each with its model.
Transactional video on demand (TVOD)

  • This is the section where you may pay for particular pieces of material.
  • TVOD streaming platforms like iTunes, Google Play, Vudu, and Vimeo are examples.

Advertising-based video on demand (AVOD)

  • Streamed content is available here for free, but with advertisements.
  • TubiTV, YouTube, Hulu, Pluto, and Crackle are examples of AVOD streaming services.

Subscription video on demand (SVOD)

  • Those who do not wish to see advertisements can pay a membership fee to view ad-free material.
  • Disney Plus, Hulu Plus, Amazon Prime Video, and Netflix are examples of SVOD streaming services.

Multichannel video programming distributors(MVPDs)

  • These are suppliers of streaming material, where you pay for a combination of streamed and broadcast content.
  • MVPDs include AT&T Now, Sling, and YouTube TV.

What is OTT advertising?

With a better understanding of OTT devices and services, the concept of OTT advertising becomes clearer.
It is the practice of displaying advertisements to customers when they are watching streaming (OTT) media.
You may accomplish this in a variety of ways, including:

  • Automation is used in programmatic advertising to distribute OTT advertisements across various networks using demand-side platforms (DSPs) such as Rocket Fuel, MediaMath, APPNexus, TubeMogul, and others.Although programmatic distribution provides greater targeting and might be less expensive, you have less control over where your advertisements appear.
  • Platform direct: This is where you would buy advertisements straight from the OTT device’s supplier (such as Roku or Amazon Fire TV from our connected TV illustration).
  • Direct from the publisher: The trade takes place directly with the OTT service provider in this case (our OTT streaming services above). Direct OTT advertising gives you more control over where your advertisements appear, but it is more expensive and does not provide as much general exposure.

What are the benefits of OTT advertising?

There are several reasons why advertisers are turning to over-the-top advertisements
as a viable revenue source.

1. Ad-supported OTT services are on the rise

According to Cox Media, the growth rate for ad-supported streaming services in
2020 will be roughly double that of ad-free streaming services.
Yes, the epidemic played a role, but the tendency persists.
As compared to prior years, OTT streaming rose by 115 percent in 2021.
As a result, many media companies are understanding the need to
either starting to stream content or developing an ad-supported version of their service.

2. Consumers prefer ad-supported streaming

Ads, on the other hand, are disliked by customers.
So, why are ad-supported streaming services becoming more popular?
Consumers are increasingly resorting to streaming material in order to view a video on demand.
After all, you can do that with cable or satellite TV nowadays.
It’s also for financial reasons.
So it seems to reason that these “cord cutters,” as they’re dubbed,
would rather watch a few commercials if it meant free (or cheaper) entertainment.
This was true even before the epidemic.
According to a Deloitte survey, 62% of customers chose less costly (or free)
ad-supported services over more expensive ad-free ones.

3. Better targeting

The only method to target conventional cable TV advertising is to select a specific market region (DMA).
These are huge territories (there are only 210 in the whole United States),
so you’ll inevitably end yourself in places you don’t need (or want).
You may use OTT advertising to target:

  • Zipcodes are a type of postal code (much like with
  • PPC geotargeting)
  • Devices
  • Demographics
  • Behaviours

4. OTT advertising works without third-party cookies

Streamed material is not only getting more popular,
but it also allows for cookieless targeting.
Here’s how to do it:

  • The first type of advertising is contextual advertising, which does not require cookies because it targets categories of TV/video content rather than people.
  • Second, streaming subscription services acquire enough first-party data from users (during registration and logged-in behaviour) to enable effective targeting.
  • So you’re utilizing their first-party data without having actual access to it.
  • Third, utilizing IP addresses and timestamps, you may still report on the effectiveness of your OTT advertisements.

5. OTT video ads have higher completion rates

Viewers can’t skip OTT advertisements, install ad blockers, or change the channel
(they’re only on one), thus your ad has a far better chance of being seen all the way through.
They could leave the room, but with customers consuming material on mobile devices
(for example, on the train or in the vehicle), this is not an option.
You may be concerned that this produces a bad user experience for your audience,
but keep in mind that people prefer ad-supported content since it is free.
In other words, they are aware of what they have agreed to.

6. Measure and optimize

You’ll be able to see performance statistics if you serve your
OTT advertising programmatically, which will help you understand what’s working and what isn’t.
This allows you to eliminate inefficient and money-wasting efforts,
make improvements to current campaigns, and grow your most successful ads.

7. Save money

With OTT advertising’s targeting capabilities, better completion rates,
and capacity to monitor and improve, these sorts of video commercials
provide several options to make the most of your money and increase your advertising ROI.
Furthermore, it is only one more component of your cross-channel marketing approach.
Marketing across many channels helps to raise brand recognition,
and the more channels you have working together to improve the effectiveness of
the others, the more successful your entire paid media plan will be.

Is OTT advertising for local businesses?

While over-the-top advertising may appear to be a sophisticated marketing
technique unsuitable for small or local firms, the statistics below may persuade you otherwise.

It’s a better form of local TV advertising

For starters, local TV advertising has long been a successful marketing technique for small businesses.
OTT advertising is the same thing as traditional advertising, but with far better targeting and reporting.
Remember that you may target by zip code if you like.

Production costs may be lower

Furthermore, video advertisements on the internet have a distinct appearance and feel from video ads on traditional television.
So, using stock video, animation, voiceovers, and simple video editing tools,
you can make current and engaging video commercials without having to shoot any material at all.

It’s not just for big brands

Most consumers don’t first identify over-the-top or streaming advertising with small or local companies
since it appears to be a sophisticated approach reserved for large corporations.
Keep in mind, though, that OTT advertising includes YouTube advertising,
which may be done via the Google Ads platform.
Even if you want to promote on other OTT networks, you may do it by using a
programmatic advertising vendor.

Cord cutters prefer local OTT ads

Ramandeep Ahuja, the co-founder of ZypMedia,
writes in his Street Fight piece on the issue that a study they conducted with
The Harris Poll revealed that 62 percent of viewers of free or ad-supported
streaming favoured local advertisements over national ads.
This proportion was greater among viewers of local streaming services as well as among millennials.

More local advertisers are using OTT

According to Ahuja, his business witnessed local marketers boost their
OTT media spending by 127 percent in 2019 compared to 2018.
Looking at the figure below, you can see that cable
TV homes are continuing to decline while OTT households are increasing.
Local marketers are already boosting their OTT advertising spending in 2019
when pay-TV consumers exceed non-pay TV households, and it would behove
them to continue leaning toward OTT as ad-supported TV
households would ultimately overtake pay TV.

We can expect local OTT apps to rise

Local media firms have an edge in that customers enjoy free local content
(news and sports), but to compete in today’s market,
these companies will likely need to provide such content through OTT applications, according to Ahuja.
This will provide additional possibilities for local companies to advertise on
streaming material, with the goal of it ultimately (possibly) being the standard.

Challenges of OTT ads

There are advantages and disadvantages to every plan for, well, anything in life.
So, let’s look at some of the drawbacks of OTT.

Management can be a challenge

The lack of cookies on OTT devices is a positive thing, but it
also makes tracking performance more difficult than on a browser.
It is difficult to monitor performance metrics or control your advertising in
real-time unless you serve your OTT ads programmatically.

Limited regulation

Because OTT is still in its early stages, there are no standards or regulations in place to ensure the quality of OTT advertisements
(think about how many Google Ads disapprovals there are).
And, while OTT devices are less vulnerable to fraud, numerous protective rules have yet to be implemented.
While these are only two drawbacks, each has a major influence on your ability
to deliver excellent advertisements, maximize your budget, and do it safely and securely.
As a result, programmatic OTT advertising is the way to go.

Tips for creating OTT video ads

Creating effective OTT advertisements entails adhering to the same
best practices as any other type of video advertising:

1. Target your personas

When you know your audience well, you may utilize language, pictures,
and themes that are meaningful to them.
When developing OTT video ad scripts and concepts,
keep all of your client profiles in mind.

2. Be relatable

Traditional TV commercial advertising, for the most part, feels “remote” from us.
We have the impression that a brand is promoting to us.
Viewers demand more relevant and personable content with online video advertisements and tailored targeting.

3. Market with emotion

This is a recommended practice for any type of marketing,
but a video is the most effective medium for emotional marketing.
Use emotive pictures, music, and words to leave a lasting and profound impression on your audience.
Can I use the word “emotional” one more time?
(Yes.)
And, certainly, laughter is an emotion.

Conclusion

OTT stands for over-the-top, as it refers to content that bypasses
or goes over the top of the set-top box (more familiarly known as the cable box).
Ad-supported streaming services are becoming more popular.
Ad-supported video content is preferred by consumers
Since it is the most cost-effective alternative.
By 2024, the number of ad-supported OTT households is expected
To outnumber pay-TV households.
Targeting, analytics, cookieless advertising, and greater ROI are
all advantages of OTT advertising.
You may contact us since we are the best digital marketing company in Bangalore.

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