One of the biggest trends shaping advertising right now is the rapid rise of streaming video viewership, which now makes up 80% of all internet traffic.

With an estimated 147 million US adults now accessing streaming video with services like Hulu, CBS All Access, Sling, and devices such as Roku, Amazon Fire TV, Apple TV — a new medium known as OTT (over-the-top) advertising has emerged, allowing brands to reach their audiences directly within their living rooms.

Here’s a breakdown of OTT advertising and how brands are buying, targeting, and measuring the success of their OTT video campaigns.

“OTT advertising is a viable component of a brand’s performance media mix. Much more than just a branding and awareness play, it is a complete performance channel that offers scale, measurability, and data-driven targeting.”

jesse math

— Jesse Math, VP of Planning and Platforms at Tinuiti

 

Jump to a Section

 

1. What Is OTT Advertising?

2. Why Brands Are Investing in OTT Video

3. Where OTT Ads Display

4. OTT Platforms

5. How Do You Buy OTT Ads?

6. OTT Video Content Best Practices

7. OTT Audience Targeting and Measurement

8. Challenges of OTT Advertising

9. The Future of OTT

 

1. What Is OTT Advertising?

 

OTT (over-the-top) advertising is advertising delivered directly to viewers over the internet through streaming video services or devices, such as smart or connected TVs (CTV).

The term “over-the-top” comes from the ability to bypass traditional TV providers that control media distribution, giving advertisers the ability to reach their audiences directly.

ott devices

Going over the top allows media companies (and advertisers) freedom of movement without pre-planned broadcast schedules or geographic limitations.

 

2. Why Brands Are Investing In OTT Video

 

Just as streaming services are disrupting the traditional TV industry, OTT advertising is also reshaping the paid media landscape.

 

ott advertising channel

 

OTT Video Is a Viable Component of Performance Media Mix

 

Over the top video is a channel that can meet a wide variety of marketing and sales initiatives, thanks to growing capabilities in scaling, measuring, and data-driven targeting.

Many places talk about over the top in just the context of upper-funnel awareness or oversimplify OTT goals as being the same as TV goals. You can leverage OTT video as a full-funnel performance channel that does more than just build your brand; it can engage and move customers through the entire funnel.

 

“OTT can be a full-funnel performance driver. What makes Tinuiti unique is that our approach focuses on the right fit for each brand. This can include traditional goals of reach and frequency. Or it can mean digital measurement, programmatic, or sponsorship — it all depends on the brand’s needs,” explains Math.

 

Benefits of OTT video over traditional TV:

  • Precise targeting that eliminates waste

 

  • Enhanced ad relevance leading to increased engagement

 

  • Build and supplement base campaigns with focused, complementary strategies: incremental reach, manage frequency, target competitors, focus on lapsed customers

 

  • Improved accountability – quantify the effectiveness of TV; optimize future campaigns

 

OTT Stats: Viewership, Ad Investments, Apps Continue to Grow

 

Brands with advanced digital strategies are adopting OTT advertising as part of their performance mix because the future of TV is becoming more digital and data-driven.

OTT video stats show that viewing has gone mainstream in recent years, especially for younger audiences, whose viewing habits have shifted from cable viewing to streaming services and OTT apps such as Netflix, Hulu, Roku, Crackle, Plex, Pluto.TV, Vimeo, Vevo and more.

 

ott apps

There has been an explosion in OTT apps over the years. Source: Innovative Systems

 

About 60% of young adults say the primary way they watch TV is through streaming services, such as OTT apps.

Where viewership consolidates, so does ad spending. OTT ad spend is predicted to hit $2 billion this year, a signal that advertising on streaming services is growing at breakneck speeds.

 

 

Beyond growing OTT video viewership, over the top marketing platforms are becoming more sophisticated, giving brands full-funnel targeting and attribution capabilities that weren’t available just a few short years ago.

“We see OTT video as being ripe for two kinds of brands: TV advertisers that are looking to recapture some of the impressions and reach that are no longer available through traditional channels, and challenger brands that don’t have direct broadcast budgets but can play in the TV space for the first time through OTT.”

jesse math

— Jesse Math, VP of Planning and Platforms at Tinuiti

 

“Consumers are moving to OTT channels. So we need to start from the perspective that OTT can work; we just need to understand how to use it to advantage.”

 

3. Where OTT Ads Display

 

Over the top video advertisements can display across a myriad of devices (such as Roku or connected TV) and streaming services (such as OTT apps).

 

ott advertising ecosystem

 

OTT content delivery takes place on any device that streams video over the internet:

  • Mobile devices
  • Personal computers
  • Smart TVs/Connected TVs
  • Streaming devices (Roku, Amazon Fire TV, Apple TV)
  • Gaming consoles
 

 

However, OTT ads don’t just “appear” on any of these devices — content delivery is facilitated through a number of OTT distribution channels.

 

AVOD, SVOD, CTV, vMVPDs, Linear TV, Advanced TV… What’s the Difference?

 

Here’s where things can get rather complicated. The streaming video landscape is complex and fragmented among devices, channels, platforms, and publishers.

It’s important to remember that the term ‘OTT’ is not a catch-all for the industry. Those who are super familiar with the concept are likely to use terms like AVOD/SVOD. Those who are somewhat familiar with the concept might substitute OTT with CTV, Connected TV or Addressable TV,.each of which are slightly different and don’t mean the same thing but are accessed similarly from an ad standpoint.

nii ahene

— Nii Ahene, Chief Strategy Officer at Tinuiti

 

On the surface, streaming video may seem like it’s all one channel. Underneath all of the streaming video, there are a number of competing business models (and devices) that determine how we access streaming content.

Here’s a breakdown of today’s most popular OTT distribution services and related terminology:

 

SVOD (subscription video on demand): streaming services that require a subscription (Netflix, Hulu, & Amazon Prime Video)

 

AVOD (advertising-based video on demand): streaming services that offer free, ad-supported streaming video (Crackle, Tubi, Vudu)

 

vMVPDs (multichannel video programming distributors): a streaming service provider that has paid-TV programming (AT&T Now, Sling, YouTube TV)

 

CTV (connected TV): a television device that is connected to the internet

 

Linear TV: traditional television that is broadcasted at a scheduled time (not OTT)

 

ott ad networks

 

4. OTT Advertising Platforms

 

Brands that invest in OTT video do so using a variety of different OTT distribution channels:

  • TV publishers
  • OTT native services
  • Streaming linear services
  • OTT devices

 

ott advertising platforms

 

While we won’t mention all of the platforms in this article, we’ll briefly dive into some of the more popular OTT channels that you’ve probably heard of, which include:

 

Roku Advertising

 

Roku is unique in that it is both a streaming device and platform — and one of the largest at that with 37 million users. Not only is Roku popular with cord-cutters, but it’s also considered one of the pioneers and leaders in OTT advertising.

Source: Roku

 

Roku’s native ad platform offers 15 and 30-second ad spots in addition to interactive video, overlays, and sponsorships.

You can learn more about Roku’s advertising solutions here.

 

Hulu Advertising

 

Hulu is the second-largest on-demand streaming service, with over 29 million viewers as of 2019.

 

 

Like Roku, Hulu also has its very own ad platform that includes a robust set of options for bidding, targeting, measuring, as well as different ad types.

You can learn more about Hulu’s self-serve ad platform and solutions here.

 

Tubi TV Advertising

 

Not far behind Hulu is another major OTT channel: Tubi TV. With over 25 million active users and content rights that span over 250 partners, Tubi’s ad platform offers 15 and 30-second ad spots that are non-skippable.

 

tubi tv

Source: Tubi

 

5. How Do You Buy OTT Ads?

 

Accessing OTT ads can also be complicated for newcomers, simply due to the fragmentation of platforms and the many different business models that distribute inventory.

In general, there are two ways brands buy OTT advertising: Guaranteed IOs (insertion orders) and Programmatic.

ott advertising ecosystems closed versus open

Breadth vs Depth: there are trade-offs to different OTT purchasing models.

 

Guaranteed IO (insertion orders) buys are set-priced, set impressions, usually based on reach and frequency.

Data-Driven Programmatic buys are based on a real-time bidding environment that allows the advertiser and the agency to maintain control of targeting but does not guarantee set impressions or frequency.

 

the two ways to buy ott advertising

 

Buying OTT Ads: Closed vs. Open Ecosystems

 

An important consideration for buying over the top inventory is what Math distinguishes as open versus closed ecosystems.

When you buy through Amazon OTT, for example, “you get access to all OTT inventory served through Amazon devices,” explains Ahene.

Open ecosystems, such as NBC Universal, enable brands to access inventory across multiple publishers.

“When planning your OTT buying strategy, the conversation is about open ecosystems versus closed ecosystems. Amazon is a closed ecosystem in terms of inventory, measurement, data, and buying entry points. For some brand initiatives, it might make sense to work within a closed ecosystem such as Amazon or Google to access their data and measurement. However, for others, it might make sense to buy programmatically from Universal to access inventory and reach audiences across multiple devices and channels.”

jesse math

— Jesse Math, VP of Planning and Platforms at Tinuiti

 

“The truth is that there’s no one platform that sells everything. Ad inventory in any given hour can be split among several publishers, which is why it can be difficult to stay close to your audience if your inventory is consolidated with a single publisher. There are trade-offs with each,” explains Math.

 

ott ad inventory is fragmented

OTT video ads on a given channel can be split between multiple publishers in a single hour-long segment, which is why it can be beneficial to diversify your OTT across multiple services to ensure your message is reaching your audience.

 

6. OTT Video Content Best Practices

 

OTT ads are essentially video ads, but for a much more advanced audience. OTT audiences expect top-notch ad experiences.

Here are a few best practices to consider when creating and deploying your OTT ads.

hulu tv ad

 

Make sure video can be formatted for multiple devices

When OTT ads are inserted into video segments, they can appear across multiple device types. Don’t assume that your ads will fit on a large screen TV. Identify sizing best practices so that your value prop and call to action is immediately apparent on all screen types.

Keep it 30 seconds or less for non-skippable ads

While you may want your ad to evoke the high-quality of a premium television channel placement, don’t fall into the trap of making it as long. Remember, OTT viewers have different expectations when it comes to streaming content. Keep it short and to the point (think 15 to 30 seconds) for non-skippables.

Leverage dynamic creative to deliver relevant, personalized experiences

The look, sound, and feel of your videos should reflect that of where your audience is. This can include the day of the week, time of the day, geo-location, weather, and behavior signals. All of these can be combined to inform the creative of your OTT content.

 

7. OTT Audience Targeting and Measurement

 

One of the powerful components of OTT is that it offers multiple layers of audience targeting.

Depending on the platform and your approach to buying OTT, you can target based on the provider’s audience data, or in some cases, with layering your own customer data.

over the top ott audience targeting

 

Most of the larger OTT platforms allow you to target against:

  • Interests and behaviors
  • Demographics
  • Location
  • Custom audiences (based on your first and third-party data sources)

 

OTT’s Power Lies in Cross-channel Targeting

 

If you take a cross-channel approach to OTT, you can target and retarget the same audience across multiple channels and screens.

For example, with the right OTT strategy, you could reach your audience on their TV screens, then retargeted across OTT, audio, display, and more, creating a truly connected cross-channel ecosystem that moves the needle for your brand.

“You can literally take a unified approach across all screens. This means targeting the same segment on Facebook, Display, Programmatic Audio, and OTT. You can retarget people that have been to your website, reach them with your video across OTT, and then sequentially target them in audio and display effectively building a seamless experience around the customer.”

jesse math

— Jesse Math, VP of Planning and Platforms at Tinuiti

 

How to Measure the Success of Your OTT Investment

 

Like any digital channel, a measurement plan is key to determining the success of your investments, which means you need to take video completion and attribution KPIs into account.

One of the strong points of OTT is that of ad delivery: the video completion rate (VCR) for OTT ads is usually between 90% and 100%. This is because most devices and platforms feature non-skippable ads that are always in-view because they can’t be minimized or switched to a different a tab.

Attribution tracking can include visiting a particular website or landing page, downloading an application, or even in-store foot traffic.

The nature of OTT viewing means that most ads aren’t clickable; however, which means a third-party attribution solution is required. This can mean working with a company such as Nielsen or Oracle to track device IDs and across platforms as well as offline touchpoints (such as entering a physical location, like a store).

 

8. Challenges of OTT Advertising and How Tinuiti Can Help

 

Beyond being a very fragmented landscape with competing business models, OTT is still a newer channel with inherent challenges for any brand looking to make the leap to the big screen.

ott advertising challenges 2020

Source: eMarketer

 

Transparency

“The number one way brands access OTT inventory is through a reseller or an aggregator,” explains Math.

“Unfortunately, this means that many brands are losing out on transparency because it’s difficult to determine whether their ads are showing on premium channels or less-than-popular segments. By using a partner like Tinuiti, on the other hand, brands have more control, transparency, and access to data with first-party OTT publisher partnerships.”

At Tinuiti, we own and operate all of our deals directly with virtually every TV and OTT publisher and platform. This gives us—and you—full transparency into each dollar spent, and the ability to granularly optimize for performance.

 

Measurement

Because OTT campaigns are delivered via television, there are challenges when it comes to attribution tracking.

Unlike other digital channels, tracking clicks or in-store traffic isn’t as straightforward and can require a third-party to understand the full impact of your OTT ads.

Tinuiti’s OTT partnerships and technology ensure that you are tracking post-OTT exposure in terms of digital performance (such as website visits and conversions) as well as offline impact (such as brick and mortar visitation).

Whether you’re looking to measure visits and sales on your website, foot traffic to your stores, brand lift, or something else, it’s not a question of if OTT will work for you, but how.

 

Media Planning & Targeting

Buying OTT media is one thing, but understanding how your OTT campaigns fit into your larger media mix to impact your audience’s decisions requires a sophisticated strategy helmed by subject matter experts.

The real magic of our OTT program lies in our strategic cross-channel approach, which unifies the data strategy with sequential messaging across your media mix. This cross-channel strategy enables a unified audience experience across all channels and screens, and a sequential retargeting strategy that surrounds the consumer and drives conversion.

 

9. The Future of OTT

ott advertising

OTT is disrupting the industry for good. As traditional TV continues to lose viewers, adults will use streaming apps and ad-supported OTT services like Hulu, CBS All Access, Sling, and Pluto.

By adding this new channel to your media mix, you have an unprecedented opportunity to target new audiences in new ways — and to do so ahead of competitors who aren’t as ad-savvy.

As OTT viewership continues to explode, so will the opportunities for brands adopting OTT video to support their sales and marketing goals.

If you want to learn more, get in touch with one of Tinuiti’s OTT experts here.

 

 

 

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