Over-the-top (OTT) is redefining the concept of TV. According to a recent estimate by eMarketer, there will be more than 200 million OTT users in the U.S. by 2019.
Today’s advertisers and marketers are recognizing a growing need for more targeted, more data-driven, and more creative advertising experiences within the OTT environment. That’s helping to push the entire industry forward and creating better experiences for advertisers, marketers, media agencies, and consumers as a result.
OTT advertising comes with a range of advantages over traditional TV advertising. But what are those advantages? Let’s dig in to find out.
What is OTT?
OTT is short for over-the-top, the term used for the delivery of film and TV content via the internet without requiring users to subscribe to a traditional cable or satellite pay-TV service like Comcast or Time Warner Cable.
OTT applications can be anything that disrupts the traditional delivery model. Examples of OTT include services like Sling TV, Hulu, channel-specific apps, and more.
According to IAB, OTT video is “video content transported from a video provider to a connected device over the internet outside the closed networks of telecom and cable providers.”
It’s high-quality content, often broadcast or HD in quality, and usually long-form (movies and TV shows), rather than the shorter clips you might find on news publisher websites. And, given that it’s delivered via a digital stream, it comes with granular ad-targeting capabilities. Learn more about OTT here.
What is Linear TV?
Linear TV refers to traditional television viewing. In order to watch a show, the viewer must tune in to a specific channel on a television at an appointed time.
Viewers access linear TV via subscription to cable or satellite services, or through over-the-air broadcasts.
Understanding the Difference Between OTT and Linear TV Advertising
This comparison gives an overview of linear broadcast television advertising and OTT advertising.
Traditional or Linear TV Advertising
- Targets demographics according to ratings and time of day.
- Advertisers pay for viewership based on the viewer ratings.
- Actual viewership is estimated and not precise.
- The viewer must tune in to a specific channel at an appointed time to watch content on a traditional TV.
- Viewership location is unclear.
- Rates are based on ratings and the ratings are based on estimates and projections of potential viewership at a specific time.
- Targets customers according to their needs, interests, and location. Marketers and advertisers can target via a range of data variables, like demographics, psychographics, locations, and even past ad exposures to enable sequential messaging.
- Advertisers pay for the ad impressions/ad views.
- Ad performance can be tracked in real-time reports, giving ad managers the ability to optimize as they go.
- The viewer can watch OTT video content at any time, any place, and on any device. Over one-third of OTT visits are over an hour long and viewers complete most of all premium video ads. FreeWheel found that OTT viewers, on average, complete 98% of video ads as compared to ad completion rates on other devices.
- Viewership location is a digital data point and can be tracked by advertisers and media agencies to report data via interfaces, graphs, and maps.
- Rates are based on CPM. Advertisers only pay for actual ad views/impressions, entirely independent from ratings and projections.
Why OTT Is Where You Should Be
OTT viewing combines the power of digital advertising with the premium content of traditional television, creating one of the most compelling environments for viewers to engage with both the content they are watching, along with the advertiser’s message.
There’s a strong appetite for OTT advertising as advertisers know that they must follow their audiences. According to TDG Research, ad spend in OTT is rapidly growing and projected to hit $40 billion by 2020, which is nearly half of the $85 billion in forecasted total TV ad revenue.
With Gen Y and Millennial content buffs increasingly cutting the cord to their linear TV services and also starting their own families, their preference for uninterrupted video on demand is being passed down to their offspring. Young children in these households are now less familiar with the concept of ad breaks and have high expectations when it comes to variety and quality of video content. As today's children grow up, access to content on demand will only increase.
OTT services have been a benefit for consumers, allowing them to watch their favorite content whenever and wherever they want. Advertisers and media agencies now know that OTT is where their potential customers are increasingly spending their time.
If you want to align your brand with viewing trends, you need to follow the eyeballs and shift to over-the-top digital advertising.
By adopting OTT as an ad-delivery platform, you have the opportunity as an advertiser to better segment the market, build your user base, reach a new set of customers, and offer them a more diverse experience than ever before.
ZypMedia specializes in local OTT digital video advertising. We can help you place your OTT ads in front of your audience while helping you drive sales and generate a positive ROI.
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