Over-the-top (OTT) media services have disrupted traditional television and video distribution models in recent years. As more consumers cut cable subscriptions in favor of streaming platforms like Netflix, Hulu, and Amazon Prime Video, opportunities abound for brands looking to engage these audiences with targeted digital video advertising.
What Is Over-the-Top Media?
Over-the-top (OTT) media refers to film and TV content provided directly to viewers over the internet. This bypasses traditional distribution platforms like cable, broadcast, and satellite TV networks.
Some examples of popular OTT services include:
- Subscription video-on-demand (SVOD) services like Netflix, Amazon Prime Video, Disney+, HBO Max, and Apple TV+, where subscribers access large on-demand libraries of content.
- Ad-supported video-on-demand (AVOD) platforms like YouTube, Tubi, and Roku Channel which offer free movies and shows supported by ads.
- Live TV streaming from providers like Hulu Live, YouTube TV, and Sling TV is an alternative to cable TV packages.
The term “over-the-top” stems from the fact that this content rides on top of existing internet network infrastructure without the involvement of a multiple-system operator like a cable or satellite company. It goes directly “over-the-top” to the consumer.
Benefits of OTT Advertising
As more viewers cut the cord on traditional pay TV and migrate to internet-delivered streaming services, the advertising industry is following suit. OTT advertising offers distinctive advantages for both marketers and consumers when executed effectively.
More Targeted Ad Delivery
Unlike broadcast and cable, OTT platforms can leverage viewer data and analytics to enable more personalized and relevant ad targeting.
Streaming services know what shows you watch and can target ads appropriately to reach their ideal customers. This helps avoid advertising waste and fatigue from seeing the same ill-fitting ads over and over.
Better Viewer Experience
Related to better ad targeting, OTT advertising can lead to a better experience for viewers. Rather than sitting through abrasive collections of random commercials, the ads you do see are more likely to be for products or services that match your interests and needs. This makes consumers more receptive to — and less annoyed by — ads.
New Brand Connection Opportunities
OTT advertising allows brands to organically embed themselves in top shows through product placement or sponsorship opportunities.
Rather than interrupting the entertainment experience, this advertising style smoothly integrates brands in a way that provides value rather than annoyance. It also enables more creative marketing partnership activations between brands and producers.
Measurement and Optimization
The data-driven nature of OTT presents new opportunities for in-depth ad analytics. Streaming platforms can track not only impressions and basic conversions but also advanced metrics like completion rates.
This enables advertisers to closely monitor performance and fine-tune aspects like ad length, format, and placement to optimize results.
OTT Ad Formats
Over-the-top (OTT) platforms provide a variety of video ad formats for brands looking to engage streaming audiences. While pre-roll and mid-roll ads still make up the bulk of OTT video advertising, native formats blend messaging more seamlessly into the viewing experience.
Pre-Roll Video Ads
Short video commercials running before a selected video begins playing are the most ubiquitous OTT ad unit. Pre-rolls allow for flexible audience targeting based on consumer data and content relevance.
Since viewers actively chose to watch the video, pre-roll completion rates tend to be quite high. This format works well for quick impact.
Mid-Roll Video Ads
As the name implies, mid-roll video ads play in the middle of content during natural break points in programming.
Mid-rolls can feel more intrusive and disruptive compared to pre-rolls, given their mid-stream placement. As a result, brands should use mid-roll ads judiciously and primarily across longer-form content.
Display Advertisements
Standard display ad formats — including pop-ups, overlays, and banners — still have a place on OTT alongside video advertising. Display ads, however, see significantly lower viewer engagement on streaming platforms. These units work best to promote brand awareness or drive traffic to long-form video content.
Sponsored Content
Native OTT advertising embedded directly into content provides a seamless experience for streaming audiences. This includes recommendations widgets promoting relevant video titles alongside recommendations.
Promoted videos seamlessly blended among organic results also fall into sponsored content. When labeled transparently as “sponsored,” this format builds trust and acceptance.
Interactive Video Ads
Interactive OTT video ads create two-way engagement between brands and viewers. Options like choose-your-own-adventure prompts, trivia questions, product configuration modules, and polls keep audiences invested in messaging. The hands-on component makes interactive video ads more memorable.
Branded Entertainment
Branded entertainment experiences mark the pinnacle of integrated OTT advertising. Examples range from custom mini-episodes to innovative show sponsors to product placement inside original streaming series.
OTT creates avenues for brands to organically build themselves directly into entertainment franchises. The interactive, streaming-first formats highlight the unique creative advertising potential unlocked by over-the-top media.
Viewer Data and Audience Targeting
One of the biggest advantages OTT advertising unlocks is the ability to leverage robust viewer data to define and target audience segments with precision well beyond traditional demographics.
First-Party Viewer Data
Major OTT platforms have access to millions of first-party registered user accounts complete with rich behavioral data. By connecting viewing behaviors with personal interests and self-reported details, they can construct detailed profiles to inform targeting.
Third-Party Data Integrations
Platforms augment their own first-party data by tapping into additional third-party consumer intelligence firms. This adds extra dimensionality through data like purchase history, channel preferences, and internet browsing behaviors.
Device IDs get matched between data sets to tie behaviors together for each user. Missing details also get filled in through predictive modeling for a complete view.
Ad Buyer Targeting Capabilities
For advertisers and media buyers, these robust data funnels unlock deep targeting abilities. Whether executing programmatic buys or direct deals, buyers can specify parameters like past purchases, location, device types, income brackets, and life events to zero in on their highest potential customers.
Content and messaging can be tailored to viewing habits with surgical precision, down to the zip code if desired.
Contextual Alignment
Further contextual targeting through semantic analysis allows ads to be aligned with video content topics. This keeps the viewing experience cohesive while also enabling granular brand safety controls. Overall, minding the context and avoiding ad fatigue is key in sustaining relevancy with streaming viewers.
In an advertising landscape plagued by blindness and approximations, OTT provides a level of measurable precision unmatched by linear television or even social platforms. Advertisers who leverage the data capabilities stand to cut through the noise to drive real awareness and conversion growth.
OTT Media Buying Strategies
To make the most of OTT advertising budgets, savvy buyers use a combination of acquisition channels and tactics to engage viewers across devices.
Programmatic Buying
Programmatic trading streamlines the OTT media buying process through demand-side platforms. Algorithmic buying powered by data facilitates real-time bidding on ad inventory to find the desired streaming audiences. This automated efficiency helps stretch budgets further.
Direct Deals
Alternatively, advertisers can establish direct buying relationships with OTT publishers like Roku, Amazon, or Samsung. This allows access to selective high-value ad placements, premium content segments, and beneficial pricing not available programmatically. Brands build tighter control over positioning and transparency.
Cross-Screen Campaigns
With video viewing behaviors shifting fluidly across devices, unified cross-screen campaigns provide consistency. Connected TV, mobile, desktop, and tablet can all be targeted in tandem to coordinate messaging as audiences migrate across screens.
Frequency Capping
Capping the number of exposures each unique user sees is crucial to prevent oversaturation and ad blindness. Giving viewers breathing room between ad exposures across their viewing experience keeps engagement higher.
Carefully choreographing spending across OTT programmatic marketplaces, direct publisher relationships, screens, and frequency thresholds provide the flexibility and consistency needed to maximize campaign performance.
The Rise of Streaming Video: An Unmissable Opportunity for Brands
The accelerated shift of viewers from broadcast television to internet-delivered video platforms presents a major opportunity for advertisers. OTT advertising allows brands to break outside the constraints of traditional TV to tell compelling stories merged directly into diverse programming contexts.
With greater targeting capabilities and cross-device visibility, marketers can zero in on high-value streaming audiences with surgical precision.
