As the digital advertising landscape has evolved, Over-The-Top (OTT) advertising has emerged as a powerful tool for advertisers to reach their audience with precision. According to a report by eMarketer, the number of US households that have access to OTT services is expected to reach 84.7 million by 2023. This growing trend presents a significant opportunity for programmatic companies to leverage OTT advertising to deliver highly-targeted campaigns to their audience.
What is OTT Advertising?
OTT advertising refers to the delivery of video content over the internet to devices that bypass traditional television distribution channels, such as cable or satellite providers. OTT content can be accessed via various devices, including smart TVs, streaming devices, gaming consoles, and mobile devices. OTT advertising allows advertisers to reach their audience with precision by leveraging data-driven targeting techniques to deliver relevant ads.
How is OTT Advertising Going?
The growth of OTT advertising has been phenomenal over the years. According to a report by Magna, OTT ad spending in the US reached $7 billion in 2020 and is projected to increase to $11 billion by 2023. Additionally, the pandemic accelerated the adoption of OTT services, with a significant increase in viewership reported across different platforms. With the growing popularity of OTT services, the opportunities for OTT advertising continue to expand.
Challenges for OTT Advertising:
Despite the growth potential of OTT advertising, it is not without its challenges. One of the significant challenges facing OTT advertising is ad fraud. Due to the high demand for premium ad inventory, bad actors are constantly looking for ways to manipulate the system and siphon off advertising budgets. Another challenge is measurement and attribution. Advertisers are looking for ways to measure the effectiveness of their campaigns and attribute success to specific actions or channels. The complexity of the OTT ecosystem makes it difficult to measure the impact of advertising campaigns accurately.
The big players in the OTT market have been expanding their digital advertising services in recent years, as they continue to grow their audience and provide more targeted and effective advertising opportunities.
🖥️ Netflix, for example, has been experimenting with sponsored content and product placements. As noted by Jessica Liu, Senior Analyst at Forrester, “Netflix has been exploring creative ways to monetize its platform without turning to traditional ads. Sponsored content and product placements offer a way to provide advertisers with access to the Netflix audience while maintaining a high-quality viewer experience.”
🖥️ Hulu, on the other hand, has been investing heavily in programmatic advertising, with a focus on delivering more targeted and effective ads to its viewers. As noted by Randy Cooke, VP of Programmatic TV at SpotX, “Hulu has been a pioneer in programmatic advertising, leveraging advanced targeting capabilities and real-time bidding to provide advertisers with better ROI and more engaged viewers.”
🖥️ Amazon Prime Video has also been expanding its digital advertising services, leveraging its vast data resources to provide more personalized ad experiences. As noted by Tim Halstead, VP of EMEA at SpotX, “Amazon has a wealth of data on its customers, which it can use to deliver more personalized and relevant ads. This makes the platform an attractive option for advertisers looking to reach a specific audience.”
🖥️ Disney+, which launched in late 2019, has yet to offer traditional advertising on its platform. However, the company has been exploring sponsorship and branded content opportunities, as noted by Brendan Gahan, Partner and Chief Social Officer at Mekanism. “Disney+ has a unique opportunity to provide advertisers with access to its family-friendly audience through sponsorships and branded content. This allows brands to align with the Disney brand and reach a highly engaged audience.”
🖥️ YouTube TV has been expanding its digital advertising services, offering advanced targeting capabilities and personalized ad experiences. As noted by Tony Marlow, Chief Marketing Officer at Integral Ad Science, “YouTube TV is a valuable platform for advertisers looking to reach cord-cutters and younger audiences. The platform’s advanced targeting capabilities and personalized ad experiences make it an attractive option for brands looking to connect with a specific audience.”
Technology Used in OTT Advertising:
The technology used in OTT advertising is continually evolving. One of the significant technologies driving OTT advertising is programmatic advertising. Programmatic advertising allows advertisers to buy ad inventory in real-time, using data-driven targeting techniques to reach their audience with precision. Additionally, OTT advertising leverages technologies such as Dynamic Ad Insertion (DAI) and Server-Side Ad Insertion (SSAI) to deliver targeted ads to viewers seamlessly.
Programmatic being helpull
Programmatic advertising has become increasingly popular in the OTT advertising ecosystem due to its ability to streamline the buying and selling of ad inventory. With programmatic advertising, advertisers can automate the process of purchasing ad space, making it faster, more efficient, and cost-effective.
According to Tal Chalozin, the Co-Founder and CTO of Innovid, “Programmatic is critical for OTT because it enables advertisers to reach specific audiences and deliver the right message to the right consumer at the right time.”
Programmatic advertising also allows for real-time bidding, which means that advertisers can bid for ad space in real-time, based on the viewer’s behavior and interests. This allows for a more targeted and personalized ad experience for the viewer, which has been shown to increase engagement and ROI for advertisers.
As Todd Gordon, the Director of Programmatic at Adobe, explains, “Programmatic buying of OTT inventory provides the same data-driven and audience targeting benefits that advertisers have come to expect from other programmatic channels.”
Moreover, programmatic advertising also allows for greater transparency and control over ad placements. With programmatic technology, advertisers can ensure that their ads are being shown in brand-safe environments, and can monitor the performance of their campaigns in real-time.
As explained by Jonathan Wilner, Vice President of Product Marketing at SpotX, “Programmatic technology can provide greater control over where ads are placed, and how much is spent, which is a major benefit for advertisers in the OTT space.”
In conclusion, the future of OTT advertising looks promising as more viewers shift towards streaming services. Despite challenges like fragmentation and ad-blocking technology, the industry has responded with innovative technologies like programmatic advertising and dynamic ad insertion. With more and more viewers opting for on-demand content, advertisers are increasingly turning to OTT advertising to reach their target audience with precision. These developments are making OTT advertising more efficient and effective, while also improving the user experience for viewers.
One trend to watch is the growth of the importance of data privacy and compliance. As data-driven insights become more critical to successful OTT advertising, advertisers must ensure they are collecting and using data in a responsible and compliant manner. This includes adhering to regulations like GDPR and CCPA, and adopting best practices for data collection, storage, and usage.
In addition to technological advancements and industry trends, publishers and advertisers are also crucial players in the future of OTT advertising.
Publishers are increasingly recognizing the value of OTT advertising as a revenue stream. By partnering with ad tech companies and leveraging data-driven insights, publishers can offer targeted and effective ad experiences for viewers.
On the advertiser side, there is a growing demand for more transparent and measurable advertising solutions. Programmatic advertising in OTT allows advertisers to access valuable data insights and target audiences with greater precision.
Overall, the future of OTT advertising is bright, with enormous potential for growth and innovation. As the industry continues to evolve, we can expect to see more personalized, targeted, and efficient ad experiences for viewers, as well as greater transparency and control for advertisers.
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