If OTT isn’t already part of your paid media strategy, it should be.
As the Marketing Manager for Media Bridge Advertising, I took on the responsibility of “figuring out” what the heck OTT was all about in 2018. Over the course of 3 months, I developed a document I titled, “WOTT IS OTT?” (I’m not a dad, but I’m working on my jokes) that I would then go on to showcase to the rest of the agency. Since that original deck, I could have probably updated it 15 times with how much more we’ve learned as an agency, and how fast the world of OTT has evolved in a relatively short period of time.
The first question that comes up when talking about OTT is, “What does it stand for?” The answer is “Over The Top,” which is in reference to the fact that media consumed in this way is served “over the top” of your cable box.
The logical question that follows is, “What does that mean?” OTT refers to TV content that is accessed through internet/streaming, rather than through a cable box or broadcast signal. If media is not being consumed by way of the internet, it is NOT OTT. There needs to be a streaming device such as an Amazon Fire stick, Google Chromecast, AppleTV, Roku, Playstation/Xbox, etc. Most new TVs now have streaming capabilities built in, so the need for a 3rd party device to view this content is often no longer necessary, which essentially means most U.S. households have some way of experiencing OTT.
This is important, because one of the many benefits of OTT for advertisers is that they can target their ads to people who fit within certain demographics, psychographics and geographies (down to the ZIP code level), much like you can with Facebook and Google ads.
The most popular methods of viewing TV in this way are through Hulu, YouTube, Netflix and Amazon Prime video. Although these are the most common hubs of OTT content, there are hundreds upon hundreds of OTT publishers in the streaming media universe. Some are supported by subscriptions and have no ads, like Netflix. Some are completely free such as Tubi TV or Crackle, both of which let viewers watch TV and movies for free in exchange for ad insertions within content. And some give users the option to have a free ad-supported version or pay for an ad-free subscription, like Hulu.
Although OTT content is great for advertisers to reach their target audiences, it’s also important to note that not all OTT ad space is created equally. At Media Bridge, we are primarily going after Connected-TV (or CTV) content for our clients. This is one form of OTT, and it refers to content that’s being streamed on a large screen. We also want our clients’ ads to appear in Full Episodic Player (or FEP) content. And if you’re sick of the acronyms, you’re not alone! FEP is produced TV-like content that appears in full episode form (e.g., long form content vs. short video clips).
The combination of these two differentiators allows our buys to most closely mirror a traditional TV viewing experience, where ads viewed in this way are not clickable and not skippable. This is important to note, because some companies selling OTT ad inventory are ones that Media Bridge would NOT deem “OTT The Way It Should Be.” Meaning, they’re mixing in pre-roll or other lower-quality inventory to achieve a lower CPM to showcase a higher amount of impressions for your ad budget. We’ve found that a blend of quality and quantity is the key to having success as an advertiser with OTT.
One question we get often is whether OTT is considered a digital media buy or a traditional media buy. Our answer is that it’s a hybrid. If bought correctly, you have an efficient ad buy that consists of highly targeted impressions being served to an audience viewing TV or TV-like content on a large screen, with the ability to have some reporting and marketing KPIs that you wouldn’t have with a traditional TV buy. We’re even able to help track success by implementing a pixel on our clients’ sites that reports back the number of IP addresses that were served an OTT ad, then later ended up on the client’s site. This isn’t a perfect science, but it’s another “temperature check” data point to guide the conversation of optimization and success.
The State of OTT Today
As most things in the digital world do, OTT is evolving in real time as more advertisers become aware of it, more companies sell ad inventory in their streaming platforms, and expectations rise that every penny of an ad budget needs to be tracked, attributed and reported.
OTT existed before Media Bridge jumped on the bandwagon, but we were early adopters. The reality is that programmatic buying of video ads in streaming media in this way has only existed since the mid-2010s, and only open to advertisers of all sizes in the last couple of years.
2018 was the year Media Bridge gained an understanding of OTT and the ever-evolving landscape of advertising in an increasingly fragmented media world.
2019 was the year we became experts in this space. We educated our clients and implemented OTT/CTV advertising as a complimentary piece of many campaigns, totalling hundreds of thousands of dollars over the course of the year across various industries and geographies.
2020 has been the year that OTT has become a necessary piece of most campaigns. This is due to several factors:
- The continued trend of cord-cutting (OTT viewership is up YOY in terms of number of households and number of hours spent watching, see below from Comscore*).
- The steady inception of additional streaming publishers (such as Quibi, which launched on April 7, 2020 and is spending $470 million in 2020 marketing the platform).
- The stay-at-home impact of COVID-19, which has increased people’s use of streaming media to stay up to date on the news, as well as to escape it through entertainment media.
Nielsen expects streaming TV viewership to grow by 60% due to the pandemic**, which means more people are being exposed to OTT media than ever before. Because OTT ad inventory is dependent on how many people are watching, that means ad inventory is (or will be) the highest it’s ever been. This is great for advertisers, because it leads to more premium content available to advertise in. And while some advertisers remain on the sidelines, waiting to see what happens to the market, eCPMs are lower across the board due to higher supply and lower demand.
Publishers have caught wind of this surge, and premium content that would have previously been behind a paywall/subscription cost has temporarily been made free as a way to entice potential users to experience the platform while being forced to stay at home. For example, HBO is offering a selection of their shows, documentaries and movies for free in April.
Sports fans remain frustrated with the lack of live games due to all major sport leagues suspending contests until further notice, and especially given that March Madness was completely canceled just weeks before it was set to begin. Although exasperated, these fans are still consuming content elsewhere. Roku monitored this through their internal data, comparing the viewership of NBA and NHL fans for the week of 3/16 to the week of 3/2, and the results are below***. The findings indicate that sports viewers are shifting to news, film & TV, and lifestyle programming at a higher rate than the general streaming population.
With the majority of the population staying home, it’s not surprising that many are also trying to find new shows and movies to watch. Netflix conveniently released Tiger King, which kept people busy for a day to a week (depending on their binge-watching habits). Rotten Tomatoes released an editorial blog post highlighting 200 Fresh movies that are available to watch online for free****. Scrolling through this list, you’ll find that many of these movies are available to watch through Vudu, Tubi and Crackle—all of which are ad supported and gaining popularity.
The world of OTT will continue to evolve as the need for on-demand, easily accessible and free content becomes increasingly commonplace within households. And this trend will continue well beyond the pandemic.
Bottom line: If OTT isn’t already a part of your paid media strategy, it will be very soon.