What is OTT?
Over-the-Top (OTT) refers to any audio, video, or other media that is delivered over the internet, without a multiple-system operator in control over the distribution of the content. The term encompasses services such as Netflix, Amazon, Spotify, and Disney+.
Some of the other terms that are included in the OTT sector are video on demand (VOD), VoIP, and IPTV. For the sake of this blog, we will be focusing on the video section of the OTT sector.
Source： OTT revenue worldwide 2024 | Statista
What is CTV?
Connected TV (CTV) is any TV, or device that uses a TV as a display, that can be connected to the internet to access content online. Additionally, CTV refers to devices that can be connected to a TV, such as the Apple TV or a game console.
CTV is often used synonymously with OTT, but there is a difference. CTV refers to the television devices that are connected to the OTT services.
What is OTT Advertising?
OTT advertising is very similar to advertising on traditional television but delivered through streaming media on OTT platforms. The technology for CTV and OTT is expected to improve significantly this and last year.
With more and more young consumers foregoing traditional television for OTT services, brand marketers are fighting for CTV ad inventory. Traditional media over indexes to an older audience due to the shift of media consumption in the younger audience. OTT ad revenue is expected to expand significantly in the upcoming years.
Why is OTT and CTV advertising getting more popular?
Source： OTT revenue worldwide 2024 | Statista
According to a Statista report at the end of 2019, OTT revenue is expected to reach 158.84 billion U.S. dollars by 2024. It is estimated that there are over 180 million OTT users in the US alone with the most popular services such as Netflix touting over 150 million subscribers worldwide.
With more than 66% of media consumption of millennials and gen-x being outside of traditional media, as reported by Hearts and Science, OTT is more important than ever before for targeting a young tech-savvy audience. OTT advertising has benefits from the digital ads industry such as detailed demographic targeting, and worldwide reach.
Utilizing multiple years of development in digital ad tech, OTT advertising adopted scalable programmatic systems early. Advertisers are given the ability to leverage real-time bidding, fast data, and a large variety of publishers that traditional media does not have the capability of. With geofencing and other targeting options, advertisers can hit their target audience with more confidence that their marketing dollars will not be wasted.
But with rapid changes in technology, blindspots are bound to occur. OTT may bring with it a sophisticated ad model, but the layers of protection and reporting from more mature sectors are falling behind.
What are some of the issues with OTT?
Cross channel attribution is still not an easy task identifying unique IDs across an individual is still not possible outside of the big 3. It is not possible to attribute installs on a seperate device, such as a mobile phone, if the impression is served on a separate device. The lack of cross channel attribution limits incremental performance marketing optimization.
Traditional media does not buy traffic with the same level of requirements as performance advertising does. Traditional media tends to focus more on reach or top-funnel metrics which has kept the need for third-party tracking down. It wasn’t until recently that third-party verification has been added to OTT advertising.
Example cases of fraud
In 2020, DoubleVerify announced a certification program for programmatic platforms to protect advertisers from fraud and invalid traffic in the CVT space. This was in response to a 120% increase of ad fraud year-over-year.
Pixelate helped uncover a fraudulent attack against the online dating app Grindr. The ad fraud attack designed specifically for OTT and Roku devices named ‘DiCaprio’ would spoof several different highly-rated apps and inject false app information.
Pixelate also identified another ad fraud scheme called ‘Monarch’. Similar to DiCaprio, the actual apps are spoofing more brand-safe apps while the ads are being displayed on questionable apps.
CTV and OTT are currently relatively left unchecked. With ad dollars being funneled to this newer form of media consumption, people are looking to take advantage of marketers. With careful vigilance and the right tools, you can identify and eliminate ad fraud from your campaigns. At SpiderAF, we are always researching the ever evolving ad fraud ecosystem.
Frequently Asked Questions about OTT Advertising
What exactly are OTT ads and how do they differ from traditional TV advertising?
OTT ads are advertisements delivered through streaming services over the internet to OTT devices like smart TVs, Amazon Fire TV Stick, and gaming consoles. Unlike traditional TV advertising, which broadcasts to a general audience, OTT advertising can target specific demographics and allows for more interactive and trackable ad formats, such as pre-roll ads, mid-roll ads, and post-roll ads.
Can you provide some OTT ad examples?
OTT ad examples include video ads that play before (pre-roll), during (mid-roll), or after (post-roll) a video streaming session on platforms like Amazon Prime Video. Other examples are overlay ads that appear on top of video content, banner ads on the menu screens of OTT platforms, and server side ad insertion which integrates ads into the streaming content to minimize disruptions.
What are the primary benefits of OTT advertising compared to traditional tv advertising?
The benefits of OTT advertising include advanced targeting capabilities, the ability to measure engagement through detailed analytics, high-quality premium video content, and reaching audiences who have moved away from cable TV to streaming services. Furthermore, OTT video ads are less likely to be skipped and can bypass ad blockers often used in web browsers.
How does OTT advertising work?
OTT advertising work involves placing video ads within streaming content accessed through OTT platforms. Advertisers can buy OTT ads space programmatically, and ad campaigns can be customized to target specific demographics. Techniques like server side ad insertion ensure a seamless viewing experience by integrating ads directly into the content stream.
What is the difference between subscription video on demand and ad-supported based video on demand?
Subscription video on demand (SVOD) services like Netflix charge a monthly fee for access to their content library without ads. In contrast, ad-supported based video on demand platforms offer streaming content for free or at a reduced cost by including video ads that viewers watch during their streaming session.
What kind of ad spend is involved in OTT advertising?
The ad spend for OTT advertising can vary widely depending on the OTT platform, the ad formats chosen, the length and quality of video ads, and the targeting specifics of the ad campaigns. While generally higher than traditional digital advertising, OTT advertising cost is justified by its targeting precision and engagement rates.
How are ad campaigns affected by the use of ad blockers in OTT streaming?
Ad campaigns on OTT streaming are less impacted by ad blockers because OTT devices and smart TVs do not typically support ad blockers, which are more common on web browsers. This allows for more reliable delivery of video ads to the intended audience.
Can you explain what server side ad insertion is?
Server side ad insertion is a technology used in OTT advertising where ads are inserted into the streaming content at the server level, before it reaches the viewer's device. This method ensures a smooth and uninterrupted transition between content and ads, enhancing the viewer experience and reducing the effectiveness of ad blockers.
How can one effectively buy OTT ads for an advertising based video campaign?
To buy OTT ads effectively, one should consider partnering with an OTT advertising platform or use programmatic OTT advertising methods. It's important to define the target audience, choose the right ad formats, and set clear KPIs for the advertising based video campaign. Using an experienced agency or a demand-side platform can also help in planning and buying effective OTT ad campaigns.
