What Does OTT Mean for Advertising?

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Over-the-top (OTT), or over-the-air, services continue to gain popularity because of their general appeal and convenience. An OTT platform allows content to be delivered to subscribers or viewers over the internet once they have devices such as smart TVs, PCs, or even mobile phones.

The model has given rise to other opportunities, such as OTT advertising. Instead of having to deal with radio or TV network owners and their influence over media distribution, advertisers can get directly to their audiences by capitalizing on the paradigm shift to the consumption of digital media on any OTT platform.

Going this route takes advantage of globalization, eliminating geographic boundaries and set schedules.

Today, you get to delve deeper into OTT advertising, the advertising-based video on demand (AVOD) model, and server-side ad insertion (SSAI). The idea is to help you understand how beneficial this workflow can be for the owner of an OTT platform, its viewers, or the advertisers.

Understanding The Surge in OTT Advertising

OTT advertising provides access to a very dynamic style of media. As marketing strategies evolve, they need greater capabilities that can evolve with them. This kind of internet-based model is conducive to that.

These technologies allow for greater scaling and capitalizing on new technological standards. Creating greater performance, it means more and better ways for consumers to access the content they desire, meaning even greater advertisement professionals.

First, there is the matter of precision targeting. OTT advertising will not be the only marketing type that seeks to qualify a subset of potential leads for a business. However, what often happens is that traditional advertising methods create waste by reaching a bunch of persons who fall outside of the target audience.

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While it isn’t impossible to appeal to an unexpected person, that is the exception and not the rule, which means it makes less than good business sense. Imagine being able to target anime-based fighting games exclusively to anime viewers. OTT content delivery makes that kind of thing possible.

It means that ad relevance is at its peak, creating greater engagement. Why wouldn’t advertisers be more interested in being able to have their ads displayed to the people they want to reach the most? On the flip side, doesn’t it create a way less frustrating or annoying experience for the consumer when an AVOD channel only presents ads that they may be interested in?

This is not too far removed from the way cookies work on websites, using your history and interests to tailor some of the advertisements you see. The internet, in this sense, is always going to offer more flexibility than other media methods. 

Of course, the advertising process goes beyond displaying ads to viewers. Marketing teams want to know how ads are doing to optimize strategies and improve engagement even further. Now that the scope of the display is so optimally narrowed, this becomes much easier to do.

On top of all that, statistics continue to show that VOD viewing continues to increase. Younger audiences are a big part of this, and one can only assume that as these younger people progressively get older, the statistics for the older demographic should also improve.

Spending on advertising also becomes streamlined for advertisers. If so many of the people that ads are intended to reach are converging in one place, wouldn’t it make greater business sense to consolidate spending in that one place too? In doing so, the advertising budget begins to decline, which translates to greater potential for profitability.

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AVOD for OTT Advertising

You may have seen the concept of advertising-based video on demand (AVOD) thrown around a couple of times earlier. While it’s not a complicated concept, there is a slight difference between it and your subscription video on demand (SVOD) service. 

Netflix falls under the SVOD umbrella, while YouTube would fall under the AVOD umbrella. 

SVOD is simply a video-on-demand service that requires a recurring subscription, whether monthly or annually. This subscription or every new one largely supports the streaming service provider.

AVOD, on the other hand, offers video content for free. Still, the streaming platforms need to sustain themselves to be able to continuously provide the service they do for users. So, how do they do this? Put simply, they leverage the power of OTT advertising.

To this end, advertisers use the services of these platforms to display ads to the relevant viewers. The revenue generated from the said ads helps to keep the platforms afloat and even helps to pay content creators too!

That’s not to say that you are never going to see an ad on an SVOD platform, but it’s not necessarily at the core of the financial support that it gets.


The final concept to be introduced is that of server-side ad insertion (SSAI). There is a disconnect between advertisers and viewers. People want to be able to watch their on-demand content uninterruptedly, while OTT platform owners need to be able to monetize their platforms, often with the assistance of ads. 

This means that advertisers must come to terms with the fact that the best way to bridge the gap is to offer a service with ads that are not disruptive. This is where ad personalization enters the mix.

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By going this route, consumers no longer feel bombarded and no longer wish to employ methods to block ads from popping up. Therefore, the monetization aspect is preserved.

SSAI allows for the use of statistics and usage data to be put into an algorithm that helps with this optimal ad display. It’s also universal across various device types.

Client-side ad insertion would be an alternate solution, but several performance issues would be introduced. First, the code that allows for these ads to be displayed would need to be tweaked to meet the requirements of individual devices. Furthermore, the added processing required would create greater latency.

Final Remarks

OTT advertising is a big part of revenue for every platform owner, as well as the companies doing the advertising. The only challenge is that it’s essential to bridge the gap between the monetization need and the optimal viewing experience.

Thanks to SSAI, it’s possible to create a more user-friendly advertising landscape, allowing ad runners to target their audiences in a much more subtle and effective manner.

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