Changing consumer behavior and technological advances in content delivery have resulted in a new media landscape, and this digital shift is prompting the marketplace to rethink definitions and approaches to video advertising from traditional TV to Connected TV via over-the-top (OTT) digital video ads.
The OTT space is still relatively new and that in and of itself can be daunting, as is understanding the complex jargon that dominates the industry. With terms like ‘co-viewing’ and acronyms like ‘AVOD’ thrown around casually in conversations, you can feel left out.
To help you cut through the jargon with confidence, here is a quick and simple guide to some of the most commonly used terms, acronyms, and phrases that you need to know as you take your media business over the top and online for your clients and fans.
A glossary of OTT terms and acronyms to help you navigate like a pro in the OTT world.
OTT Advertising and Technology
OTT Content: Over-the-top (OTT) content is a term used in broadcasting and technology business reporting that refers to audio, video, and other media transmitted via the internet without an operator of multiple cable or direct-broadcast satellite television systems (so-called multiple-system operators) controlling or distributing the content.
OTT Device: A device that can connect to a TV (or functionality within the TV itself) to facilitate the delivery of internet-based video content (Roku, Apple TV, Smart TVs, game consoles, etc.).
OTT Video: Video content transported from a video provider to a connected device over the internet outside the closed networks of telecom and cable providers.
VOD (Video On Demand): Video content that is controlled, enabled, and consumed whenever a viewer desires after its official release date or original air date and time. VOD content can be found on set-top boxes, OTT devices, mobile web, mobile apps, and video streaming services.
Ad-Based VOD: A streaming video service that offers consumers access to a catalog of on-demand content and contains advertisements.
Connected TV: Any type of TV screen that can stream digital video. Connected TV (CTV) doesn't require a TV set that comes out of the box with an internet jack, the so-called smart TV. Viewers can feed TV-over-the-web to their sets using streaming devices like a Roku, an Amazon Firestick, or a video game console. With CTV, information can flow both ways, and ads can do new things.
Streaming: A technology that permits continuous audio and video delivered to a device from a remote website.
Channel: A mechanism of distribution that refers to live or on-demand online content stream(s) featuring user or publisher content curated together.
Live-Streaming: Video content streamed digitally in real time as the event or program takes place. Content can be streamed on mobile devices, computers, smart TVs, or internet-enabled TVs.
SVOD (Subscription Video On Demand): An OTT video streaming service that users have to pay for. It is a type of service that allows you to access an entire library of videos for a fixed recurring fee. This fee may be charged daily, weekly, monthly, or annually.
AVOD (Advertising-Supported Video On Demand): This is an ad-based digital video service that is free to its users. In this model, ad revenue is used to offset production and hosting costs and monetize the content. SlingTV, Roku, and FuboTV are examples of AVOD OTT services.
TVOD (Transactional Video On Demand): Video platforms and services that allow users to buy or rent individual pieces of content. Think iTunes or Amazon.
EST (Electronic Sell-Through): See TVOD.
In-Stream Video Ad: Played before, during, or after the streaming video content that the consumer has requested (pre-roll, mid-roll, or post-roll). These ads cannot typically be stopped from being played (particularly with pre-roll). This format is frequently used to monetize the video content that the publisher is delivering. In-Stream Video Ads can be played inside short- or long-form video and rely on video content for their delivery.
STB (Set-Top Box): An internet-connected device that streams OTT video. Apple TV is one of the most popular STBs on the market.
DMA (Designated Market Area): DMAs are a way of designating particular geographic markets and are often ranked by the size of the population.
App: App is short for application. These are the programs you download to hardware and ecosystems from their given stores. Example: Downloading the Roku app from the App Store.
OVP (Online Video Platform): A place for users to upload, store, and distribute content online.
DTC (Direct to Consumer): When your content skips over an intermediary and goes directly to the consumer. For example, Netflix doesn’t need to find a TV channel to show its content; it’s delivered DTC.
RAF (Roku Ad Framework): Advertising on the Roku set-top box.
Co-Viewing: A traditional TV term that's coming to life in connected TV. Nielsen does its best to estimate how many people watch traditional TV, even when a group of people watch a single TV set at once. Advertisers already pay for each person who Nielsen estimates sees its spots. (Problems arise when outsiders show up at Nielsen family homes and aren't counted in the room.) Streaming TV providers also eventually want credit if multiple people watch, but the metrics so far treat each stream as a single viewer. There's no industry standard for tackling the problem, so expect some spirited negotiating down the line.
Cross-Screen Measurement: Tracking and measurement of video metrics across Mobile/Tablet/Out-of-Home/Television/Advanced TV/Desktop.
Frequency: Another traditional TV term that's becoming essential to connected TV. Ad pacing is a big deal in any setting. Nobody wants to see the same ad constantly. But as CTV audiences grow, the current blight of repetitive ads is becoming a bigger problem. Technology can help digital video platforms keep tabs on frequency, and frequency capping can prevent ads from running after a predetermined time. But marketers' demand for streaming video is the biggest factor in making sure there's a variety of spots available to rotate through.
vMVPD (Virtual Multichannel Video Programming Distributor): A virtual MVPD is a service that provides multiple television channels through the internet without supplying its own data transport infrastructure (i.e., coaxial cable, fiber, or satellite technology). These services are also sometimes called “skinny bundles” as they often contain fewer channels than a traditional cable or satellite subscription. You may be familiar with some vMVPDs such as Sling TV, DirecTV Now, PlayStation Vue, Fubo, Philo, YouTube TV, and Hulu Live.
DAI (Dynamic Ad Insertion): This is the ability to swap out one ad in a TV show for another. This can be done in video on demand, for example, to avoid playing an outdated commercial for a viewer who's watching weeks after a show's first air date. But as more linear TV streams are delivered over the internet, the desire is growing to dynamically insert ads there more often and for more reasons, ideally sending different messages to different consumers watching the same program on the same day.
View: The most popular metric in digital video. Trouble is, the definition of view changes depending on the platform. Facebook and Instagram measure views at three seconds, while Snapchat and Instagram Stories count views as soon as the video starts playing; YouTube, meanwhile, can count a view anywhere between the start of a video and 30 seconds in. This has made it difficult for advertisers to assess the value of viewership on different platforms.
Viewability: A metric in digital advertising that measures the likelihood of an ad being actually seen. For video ads, the MRC standard is 50 percent of the ad being in view of the screen for at least two seconds. GroupM, the biggest ad spender on the planet, has more rigid standards.
MRC (Media Rating Council): An industry watchdog that sets the standard for measurement in the media industry and audits companies to ensure they are complying with those standards.
Nielsen Rating/Share: The number indicates the percentage of TV households that were watching a particular show. For instance, a Nielsen rating share of 5.0/10 means that out of all TV households in the U.S. (over 118 million), 5 percent were watching that show; and out of all U.S. TV households that had a TV in use, 10 percent watched that show. A ratings share can be broken down into age and gender demographics as well.
AMA (Average Minute Audience): This concept is one of the biggest reasons why it is hard to compare TV views to online video views. In TV, programming has an AMA measurement, which tells advertisers the average number of people who watched a particular program at any 60-second interval.
CPA (Cost Per Acquisition): Cost of advertising based on a visitor taking some specifically defined action in response to an ad. Examples of “Actions” related to video include such things as engaging with the overlay unit, clicking to the client site after completion, or completing a purchase.
VCR (Video Completion Rate): Also known as View Through Rate (VTR), VCR – not to be confused with the videocassette recorder – is the percentage of all video ads that play through their entire duration to completion.
CPM: Cost per thousand impressions, calculated as CPM = Total Cost / Total Impressions x 1,000. For example, a website that charges $1,500 per ad and reports 100,000 impressions has a CPM of $15.
CPCV (Cost Per Completed View): Pricing model in which the advertiser pays for every time a video ad runs through to completion, calculated as CPCV = Total Cost / Completed Views. Rather than paying for all views, some of which may have been stopped before completion, an advertiser only pays for ads that finished playing.
CPV (Cost Per View): Pricing model in which the advertiser pays for every time a video ad starts (each start is counted as a view), calculated as CPV = Total Cost / Total Views.
VCPM (Viewable Cost Per Thousand): Pricing model in which the advertiser pays based on the cost of 1,000 viewable impressions, calculated as VCPM = Total Cost / Total Viewable Impressions x 1,000. A viewable impression refers to an opportunity to view an ad for more than two seconds.
VCPV (Viewable Cost Per View): Pricing model in which costs, views, and viewability are all taken into account to determine what the advertiser pays. Calculated as VCPV = VCPM / CPV where “view” usually means a completed view.
CPAOT: It is the cost per audience on target.
CPE/CPI (Cost Per Engagement/Cost Per Interaction): Pricing model in which the advertiser pays for every time a user actively engages – or interacts – with an ad. For example, when a user hovers over a lightbox ad to expand it, that’s an engagement/interaction.
Time-Based Pricing: CPH (cost per hour) and CPS (cost per second) are pricing models in which the advertiser is guaranteed a minimum exposure time for their viewable impressions and then charged based on how much time 1,000 impressions create. Read more about how the Financial Times implemented this measurement.
CPM (Cost Per Mille): The cost of an ad that an advertiser will pay for every 1,000 impressions.
CPCV (Cost Per Completed View): A more popular metric in video, which allows advertisers to pay based on when a video ad has played to completion.
Ad Impression: An ad impression is a single viewing of a single ad by a single individual.
Didn’t find the term you were searching for? Look out for that term on our digital video and TV glossary here. The ZypMedia Blog reports on OTT advertising trends and information. Subscribe to the blog to stay up to date on the latest and greatest in this quickly changing industry.
The OTT industry is continuously changing and growing. Whatever happens, it provides a great opportunity for media agencies and advertisers looking to reach more and engaged and targeted users.
Incorporate OTT advertising into your mix to better segment the market, build your user base, reach a new set of customers, and offer a more diverse experience than ever before.
ZypMedia specializes in local OTT digital video advertising. We can help you and your organization place OTT ads in front of your audience while helping you drive sales and generate a positive ROI.
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