With streaming viewership projected to reach nearly 198 million users this year, a new medium has emerged – OTT advertising.

Regardless of size, both large and small businesses can leverage the benefits of OTT advertising. In this guide, we’ll discuss what OTT advertising is, the different types of OTT advertising, and how OTT ads can help improve your brand’s advertising strategy.

What is OTT Advertising?

Over-the-Top (OTT) advertising is an internet-based content format where advertisers deliver ads directly to viewers through online video streaming services and devices, such as smart and connected TVs (CTV). OTT platforms use the internet to provide content to users instead of traditional media such as cable or satellite.

One of the most significant advantages of OTT advertising is that it allows marketers to reach a smaller but more targeted audience with non-skippable advertisements.

Suppose you go beyond the larger streaming platforms. In that case, there are plenty of smaller, niche OTT channels offering limitless opportunities for advertisers to reach audiences no matter where they consume their content.

Types of OTT Advertising

OTT Television

OTT television is the most popular type of OTT advertising. Advertisers incorporate OTT advertisements that appear on “television” into streaming services. Video distributors control access through applications located in the streaming services headquarters..

The number of streaming services available continues to grow; you’ll want to do a little research to find out which service is best suited to reach your target audience.

Examples of popular streaming services:

Netflix
Hulu
BBC
Apple TV
HBO (Go, Max, Now)

OTT Messaging

OTT Messaging includes any third-party online instant messaging or chat room available to users. These services are an alternative to text messaging and are provided by mobile networks.

Examples of OTT messaging include:

WhatsApp
WeChat
Skype
Facebook Messenger
Snapchat

Keep in mind that each platform can support different OTT ads. Some will display OTT advertisements as a banner, while others offer short videos. Each service uses different demographics, so you will want to research various messaging services to find the right fit for your target audience.

OTT Voice Calling

Voice calling applications and websites also provide an opportunity for OTT advertisement. Any online service that can replace a traditional voice operator is considered a voice-over-internet protocol (VOIP).

Examples of OTT voice calling services include:

WeChat
Viber
Skype
WhatsApp

Voice calling OTT ads can appear on websites as banners, short videos, or standard webpage advertisements. Once again, doing a little research will help you decide which platform best supports the type of OTT advertisements you’d like to place.

OTT vs. CTV: What’s the Difference?

Over-the-top (OTT) and Connected TV(CTV) devices are two popular methods for streaming content online, but people often confuse them with one another. Understanding the difference between the two will help you develop your digital strategy.

Connected TV

A Connected TV is a device that connects to or is embedded in a television to deliver video content via the internet. Xbox, Playstation, Roku, Amazon Fire TV, Apple TV, and more

Over-the-Top (OTT)

Content that streams directly from the internet. Delivered streaming or video-on-demand (VOD). Netflix, Hulu, Amazon Prime. Networks are also creating their own OTT services, such as Disney+ and Paramount+.

Experts call the rise of CTV and OTT “cord-cutting”– viewers are canceling their cable and satellite subscriptions in favor of streaming and VOD formats.

Popular OTT Distribution Services

A variety of OTT distribution channels are available for brands to invest their marketing budget. These channels fall into four main categories:

TV publishers
OTT devices
Streaming services
OTT native services

Here are a few of the most popular OTT platforms for OTT advertising:

Roku Advertising

Roku has an estimated 155 million subscribers, offering advertisers the opportunity to reach and engage with TV streamers. Roku’s native ad platform allows you to leverage proprietary segments and third-party validation. Ads are available in 15 and 30-second spots and interactive videos, overlays, and sponsorships.

Hulu Advertising

With more than 92 million ad-supported viewers, Hulu ads operate on a native ad platform with robust bidding, targeting, and measurement options. The new self-service advertising option caters to small businesses with lower minimum campaign bids, start/stop whenever you want, and ongoing support and resources.

Tubi TV Advertising

Tubi TV is a free internet TV network similar to Hulu. With over 33 million monthly active viewers, Tubi delivers commercials to ensure the platform remains accessible to viewers. Tubi’s CrossReach ad platform offers targeting, data insights, multiscreen delivery, and reporting for 15 and 30-second ad spots that are non-skippable.

OTT Ads: The Basics

Where are OTT ads displayed?

OTT ads display across various streaming services (OTT apps) and devices (Amazon FireTV or connected TV).

Any device that streams video over the internet can support OTT content, including:

Mobile devices
Laptops
Tablets
Gaming consoles
Smart TVs/Connected TVs

How are OTT ads delivered?

Advertisers deliver OTT content through a number of distribution channels. Each streaming platform communicates differently with OTT devices via Video Ad Serving Template (VAST) or Video Player-Ad Interface Definition (VPAID) tags.

The typical delivery method of OTT advertisements:

Audience creation: Creating an OTT audience based on subscription data and first and third-party data, such as preferred show categories and shows watched.
Audience matching: The platform matches an audience to the specific TV’s subscribers list on various OTT platforms. It then pushes, downloads, and buffers the ads by the OTT devices.
Ads display on OTT devices: This is where VAST and VPAID tags communicate with OTT devices.
Reporting: Ad-exposure results are sent back, and the platform generates a campaign report. First- and third-party data is typically included in the advertiser reports.

Two ad-insertion methods used for delivery–served client-side (CSAI) and server-side (SSAI).

CSAI

Client-side ad-insertion is where an ad is loaded within the OTT box before it is displayed to the viewer. The original ad-insertion method CSAI is susceptible to ad blockers. While not ideal, it continues to be the most widely used method in OTT devices in the advertising industry.

SSAI

With server-side ad-insertion, ads are delivered as a seamless stream with the video content. A mix of ads and content are provided frame-by-frame in real-time without any interruption to the viewer.

Ad blockers are not able to differentiate between which frames are ads and which are core content. While SSAI is effective against ad-blocker software, the “stitching” process poses some limitations to advertisers. Therefore, CSAI continues to be the most commonly used ad-insertion method for advertisers.

Improve Your OTT Strategy

While a relatively new advertising trend, OTT advertising provides an opportunity for brands to reach and engage audiences in new ways. An advertising agency can help get your message in front of the right audience at precisely the right time.

New Path is a pioneer in programmatic advertising. We work with the leading programmatic providers to execute campaigns that influence every step on the path to purchase.

Since the beginning, we have been committed to maintaining end-to-end control of our digital advertising practice. We plan, build, execute and optimize our programmatic display and video campaigns in-house.

Our programmatic display and video solutions include:

Display & Video 360
OTT (video advertising)
YouTube Advertising
Amazon Advertising
Adelphic DSP
Campaign Manager

The outcome? Accelerate campaign launch times, optimizations, and increase your overall return on investment. Ready to start? Schedule a free consultation.