What the hell is OTT (Over-the-Top Content) and why should I care?!
The world is a-changin’ and it isn’t slowing down any time soon. We live in an age where the traditional TV ad spend has decreased by 50% since 2015; according to eMarketer, millennials are spending less time watching TV than ever before. In fact, recent studies have found that brands can increase customer engagement by up to 75% when they advertise on OTT platforms such as Hulu or Roku compared to traditional television advertising.
OTT Advertising in the Age of Streaming: Hulu, Roku, and More
OTT advertising is a growing trend, and it’s easy to see why. OTT advertising allows you to reach your target audience in a way that no other medium can match. The ability to deliver your message directly into someone’s living room or mobile device gives you an unparalleled opportunity for engagement and brand awareness.
But how do you get started with OTT advertising? What platforms should you consider? How much will it cost? In this article, we’ll answer all these questions and more so that when the time comes for your business or organization to make its first foray into OTT advertising–or if you’re already doing so–you’ll know exactly where (and how) to go from here!
What Is OTT Advertising?
OTT advertising is a subset of OTT, which stands for “over-the-top.” It’s a broad term that refers to TV content delivered over the internet – such as Hulu, Roku and Apple TV. OTT advertising is delivered through an app or web browser and can be targeted based on demographics, interests and location.
The Rise of OTT Video Ads
OTT advertising is an emerging industry, but it’s growing fast. According to a report by eMarketer, OTT ad revenue will reach $28 billion in 2022–and that doesn’t even account for the additional revenues generated by companies like Amazon, who don’t share their data with third parties.
In addition to being a big business, OTT advertising is expected to become even bigger: The same report predicts that by 2025 there will be $56 billion spent on digital video ads across all platforms (including traditional pay TV).
How Much Does Programmatic OTT Video Advertising Cost?
Programmatic OTT advertising is more expensive than traditional TV.
While you may be thinking that this is bad news, it’s actually good–the higher price tag means you can get better results from your ads on these platforms. The industry is still figuring out how much programmatic OTT video costs, but we do know that there are some standard rates for different types of inventory (e.g., clean ad space vs. brand safe). For example, Hulu has been able to sell its premium ad slots at $7 CPMs while Roku has sold ads at around $10 CPMs (or even higher). While these numbers seem high compared with traditional television ad buys with linear networks like NBCUniversal or Fox Broadcasting Company (which charge around $20-$25), they’re actually quite low considering how targeted these audiences are compared with traditional cable viewers who watch whatever channel happens to be airing their favorite show at any given time during prime time hours!
OTT Advertising in the Age of Streaming
OTT advertising is the future of digital advertising. It’s more effective than traditional TV, and it lets you reach your audience on their terms–on their screens.
Here’s why: OTT delivers a better user experience by taking advantage of modern technology (e.g., streaming video) and avoiding legacy infrastructure (e.g., cable boxes). This means that viewers get to watch what they want, when they want–without having to sit through ads or wait for buffering times. And because OTT is all about content curation and recommendation engines, it creates an environment where brands can be relevant without being intrusive!
Streaming Device Options
The best streaming devices are the ones that offer the most flexibility and customization. Here’s a list of some of the most popular options:
- Apple TV
- Amazon Fire TV (and Stick)
- Chromecast (and Mini)
- Google Chromecast
- Amazon Fire Stick
- Android TV
- Xbox One S/X * PlayStation 4 Pro
The next time you watch a show on Hulu, take a look at the opening sequence. You’ll notice that it’s different from most other streaming services–and for good reason. Hulu was created to be more than just another place to find your favorite TV shows and movies; it’s also an all-in-one portal for entertainment enthusiasts who want their content delivered in one place.
The service offers live and on-demand streaming from dozens of networks including ABC (Disney), Fox, NBCUniversal and WarnerMedia as well as its own originals like The Handmaid’s Taleand Future Man. It also gives users access to premium channels HBO Nowand Showtime Anytime at no extra cost if they sign up for those subscriptions through Hulu instead of directly with each network or service provider individually (though some restrictions may apply).
Roku is one of the most popular streaming devices on the market. It’s easy to use and has a wide variety of content, which makes it perfect for cord cutters who want to watch their favorite TV shows from services like Hulu.
Roku also offers a large user base: it has sold more than 20 million units since its founding in 2002 (and that number continues to grow). The company has an advertising platform called Roku Audience Solutions that allows advertisers to target specific viewers based on their interests and location–or even what they’re watching at any given moment. This can help businesses reach their target audience more effectively than traditional forms of advertising ever could!
The Future of OTT Advertising
OTT advertising is still in its infancy, but it’s growing fast. The future of OTT advertising is bright, but it’s also uncertain and full of change.
As with any new medium that has the potential to disrupt an old one (like TV), there are always going to be naysayers who don’t believe in its power or longevity–or simply have no interest in seeing their favorite shows interrupted by commercials. But if you look at the numbers from 2018 alone, you’ll see why this might just be the future:
- Hulu had over $1 billion in revenue last year thanks mostly to their ad revenue stream; they expect that number will double this year
- Roku’s total revenue increased by 41% last quarter thanks largely due to ads running on their platform
In order to succeed in the streaming era, brands need to understand how their audience consumes content.
To succeed in the streaming era, brands need to understand how their audience consumes content. They need to understand the importance of quality and relevance; engagement; targeting; brand safety; measurement.
…but at the end of the day, your ad content matters.
The bottom line is that OTT advertising is a great way to reach your target audience, but at the end of the day, your ad content matters.
- Content needs to be relevant to the target audience (and not just because they’re watching Hulu).
- It needs to be engaging enough that people want to watch it–even if they don’t want to buy anything right now or sign up for something immediately afterwards!
- The quality of your video will play into this as well; if you have poor production values or sound quality issues with audio/video syncing issues then viewers will find themselves distracted from what’s being said in order for them instead focus on how terrible everything looks and sounds like. And no one wants that!
OTT advertising is a dynamic new medium that can be used to reach your target audience in ways that traditional television ads cannot. But before you jump into this new world, it’s important to understand how OTT ads work and what they mean for your brand. If you’d like to see what an OTT Campaign can do for you and your business, we offer free consultations! Click here to get started!