Heading Upstream: Leveraging Advertising on OTT Streaming Services

As people “cut the cord” and abandon cable for streaming media services, a new cord is taking its place. Over-the-top (OTT) devices including Chromecast, Roku, smart TVs, Apple TV, gaming consoles (PS4), or streaming stick (Amazon FireTV) are growing in popularity. OTT refers to any device or service used to stream digital content on a device or to a TV. Meanwhile, consumers are becoming more tolerant of advertising as they get programming for low or no cost, which presents advertisers with great opportunities.

What Is OTT Advertising?

A Pew Research Center survey found more than 60 percent of Americans age 18–29 watch television through streaming services. As a result, the advertising experience is shifting to streaming platforms with ad placement on OTT video content. With more homes making the switch to OTT, ad revenue on OTT is set to increase from 45 percent to 60 percent over the next decade.

Strong Targeting Opportunities

OTT allows advertisers to personalize and localize campaigns in an efficient way that few platforms can offer. Instead of sending out an excessive number of ads that land on the wrong audience, OTT allows companies to work with advertising businesses to target a population in specific geographical locations, demographics, and topics.

Data Analysis Capabilities

OTT platforms provide users with data analysis reports for their products that give better insight on impressions to different advertising strategies, according to the target market and data types. By having different types of data available, users can subdivide the information with placement, targeting, and improved measurement of audience engagement.

Budgeting Flexibility

OTT allows companies to tailor a desired volume of outreach, allowing more flexibility when it comes to budgeting. A company can purchase a specific number of views and maintain a flexible budget throughout the marketing campaign. This maximizes efficiency while keeping costs lower because a specific number of impressions can be purchased.

Increasing Competition

OTT-based advertising hit $2.7 billion in revenue in 2018. Hulu and Roku have built sizable ad businesses. Amazon is also upping its efforts to collect more ad revenue. In this growing marketplace, competitors will have to leverage forward-thinking technologies to build a solid infrastructure and framework for OTT advertising. This will prompt more engaging ad formats that will offer better value proposition for advertisers, publishers, and consumers.

OTT Ad Types

Dynamic ad insertion allows advertisers to swap out ad creatives in linear, live, or video-on-demand content. When OTT ads are delivered, it requires reconciliation of how the streaming platform communicates with the OTT device. This includes video ad serving template (VAST) or video player-ad interface definition (VPAID) tags, along with the ad-insertion method, which will be served client side (CSAI) or server side (SSAI).

CSAI is generally considered to be the legacy method, in which ads are loaded within the OTT box itself before they get displayed to the viewer. However, this method is more susceptible to ad blocks. With SSAI, the ads are served as a seamless stream. It “stitches” the content together with ads, which reduces or eliminates pauses between the actual video and ads.