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OTT and You: A Beginner's Guide

Updated: Jul 29, 2022

People are watching more video content on their smartphones, as well as on their laptops and desktop computers. The trend of video acceptance on smartphones and laptops began with YouTube. Consumers may now watch longer-form content thanks to that sense of security. As a result, as consumer use of OTT Platforms rises, advertisers will have a more cost-effective opportunity to engage with customers in ways they may not have previously.

You've seen over-the-top (OTT) video content if you've ever binge-watched a show on IMDb TV, streamed a live event on Twitch, or seen your favorite network broadcast app, like Peacock on Fire TV. Any content that is supplied directly to consumers via a streaming video service over the Internet bypassing the traditional cable set box, and often seen on a TV, is referred to as over-the-top (OTT).

Marketers and brands can contact viewers directly over the Internet via streaming video services or devices such as mobile phones, laptops, and connected TV (CTV) devices, like Roku, via OTT (over-the-top) advertising. The word "over-the-top" refers to viewers' ability to bypass traditional TV providers like Xfinity and DirecTV, which regulate media transmission, allowing advertisers to reach their target audiences directly, and these audiences are enormous!

Cord-cutting, which is when a household cancels their cable or satellite TV subscription, is encouraging more people to watch videos on a connected TV. In 2020, more than six million households were predicted to cut the cord, increasing the total number of cord-cutters to 31.2 million. By 2024, that figure is expected to rise to over 46.6 million cord-cutter households, accounting for more than a third of all American families.

Brands have a great chance to include streaming TV advertising into their media plans as a result of this. Another distinction between OTT advertising and traditional broadcast advertising is that OTT advertising often reaches a smaller but more targeted audience, making it ideal for smaller or niche businesses.

Why Use OTT Advertising

Reach the Right Customers and Improve Audience Engagement

Remember the aforementioned cord-nevers and cord-cutters? Advertisers may reach this elusive population on their own terms with OTT. OTT's targeting capabilities allow marketers to reach specific people that they could previously only hope to reach with a wide TV ad plan. OTT allows almost any consumer to be recognized and provided. OTT services can target particular audiences, unlike traditional TV programming, which must serve a large audience. Your ad money will go further on an OTT platform, reaching a more targeted, niche audience than traditional types of advertising.

Not only are you reaching the right audience, but you are also ensuring you have their rapt attention. Fast-forwarding on TiVo, fleeing to the restroom, or changing the station are all options for avoiding advertisements using regular televised advertisements. On OTT services, however, ads are much more difficult to skip—users can't fast forward through commercials, and the digital format makes switching shows hard without losing your place. As a result, the majority of viewers watch OTT advertising all the way through.

Due to the sheer level of personalization that goes into what ads are shown to each unique customer, OTT ads are also more compelling to customers overall. OTT ads, unlike TV commercials, may micro-target client interests, increasing the likelihood of recall. When asked about a specific advertisement, 72% of OTT users could recall it. In fact, data shows that 47% of ad-supported OTT consumers find advertising "helpful or pleasurable."

The audience is also liable to see your ad across multiple devices. Tailored OTT adverts may appear many times. More views equal more desired replies to your advertisements, a principle called "effective frequency."

Higher Click-Through Rates

You've probably noticed that almost all of your YouTube advertising features a clickable link by now. That's because it is highly effective. For viewers, clickable advertising, like those found in YouTube videos, eliminates the "middleman" search step. OTT users, unlike TV viewers, do not need to use a second device to look up a product. They can get more information by just clicking on the advertisement. Ad traffic from television is faster, easier, and more trackable. While OTT's strength is frequently viewed as increasing brand recognition on par with television, research shows that it can also activate sales. After seeing an OTT ad, 30 to 40% of video viewers in APAC completed a purchase (in-store, online, or by redeeming a voucher/promotion).

Better Data Tracking

Brands no longer have to wonder if their ads were seen because of OTT. In a way that broadcast and linear TV never could, OTT advertising may deliver attribution. You can establish whether a person viewed an ad, whether they visited an advertiser's website, and how long they stayed once they arrived using pixel-based monitoring. Brands can collect this information regardless of the device on which viewers watch content.

Although some direct buying platforms, such as Hulu and Sling TV, offer some demographic targeting, programmatic OTT ad buys offer the most flexibility in terms of targeting the population you want to reach. We use addressable (household) geofencing at 7Social to select audiences and, in particular, specific households based on a variety of characteristics. The allure of OTT Programmatic Advertising is the cross-device matching that takes place. As a result, the same advertisement given to a smartphone device can also be delivered to a smart television device in the same household. Ads can be delivered to the proper audience across numerous devices as you curate an audience. The level of personalization that goes into choosing what customers see in advertisements also means you are going to gain more data about your customer base and the effectiveness of your ad spend.

Here are just some of the data variables that can be used for OTT advertising when working with 7Social.

● Age Range

● Consumer Credit Data

● Home Ownership Status

● Income

● Language

● Life Events

● Personal Interests and Hobbies

● Race/Ethnicity

● Vehicles Owned

At 7Social Agency, we can help you track the effectiveness of your OTT campaign using the KPIs listed below.

● Ad Pacing

● Click-Through Rate (CTR)

● Cost Per 1,000 Impressions (CPM)

● Cost Per Action (CPA)

● Cost Per Click (CPC)

● Device Level Performance

● Impressions

● Pause/Mute Rate

● Percent Of Video Watched

● View Through Conversions

Getting Started With OTT

Now that you have learned more about what OTT is, you are probably itching to get your feet wet and get the ads rolling. Due to the diversity of platforms and the numerous ways to exploit OTT inventory, gaining access to OTT ad space can be difficult for new advertisers and brands. Traditionally, you couldn't specify which shows you could serve your ads on unless you were performing a non-programmatic direct IO or platform buy, but programmatic OTT advertising enables detailed audience targeting, negating the need to focus on certain channels to advertise on.

Some platforms restrict your audience targeting options, while others force you to purchase directly. Guaranteed IO's (Insertion Orders) and Programmatic Ad Buys are the most popular and widely used methods of buying.

Guaranteed insertion orders are when you order a specific number of impressions for a specific price. This cost is determined by the frequency with which adverts are displayed and their potential reach. This is the strategy taken by several online TV streaming sites (such as NBC's Peacock).

Here are some of the pros of using Guaranteed insertion orders.

● Custom Units and Sponsorships

● Impressions Are Guaranteed

● Make Goods for Under-delivery and Use Non-dynamic CPMs.

● Opportunities for Added Value, Such as Brand Lift Studies

When you buy ad placements via a bidding marketplace, you're using data-driven programmatic advertising. You can control your targeting, budget, and more here. The most significant disadvantage worth emphasizing is that impressions and frequency are not guaranteed. You will only be charged for what is received. This option is commonly used by platforms like Hulu and Roku.

Here are some of the pros of using programmatic buying.

● Advertisers Have More Influence Over Audience Targeting Data.

● Bidding Takes Place in Real-Time

● Brands Can Control Reach and Frequency with Dynamic CPMs Based on Supply and Demand. You

● Conversions Can Be Measured Both Online and Offline.

● Users Can Use Both Private Markets and Programmatically Assured Placements.

Both alternatives have the advantage of simply charging for the views you receive. All you have to do now is figure out which platforms you want to promote, what options you have, and what would work best for your business strategy.

Best Practices

Keep it Short and Sweet

Having a high-quality video for premium television placement is a must; make sure your ads aren't too long. That is, you should limit them to 15 and 30 seconds at most. Anything more than 30 seconds requires you to be on inventory, which isn't optimal from a cost standpoint. Furthermore, given the attention of the audience viewing over-the-top television, 15 and 30-second spots typically perform better than 60-second spots, regardless of whether the majority of the inventory is non-skippable.

Keep in Mind the Use of Multiple Devices

People move from one device to another with more frequency than ever before. One minute you're checking your social media on your phone; the next, you're streaming a YouTube video on your tablet, and in the morning, you could be doing work on your laptop. Your customers are the same way. When OTT advertising is put into video segments, it can display on a variety of devices, including connected television devices like mobile, desktop, and smart televisions. Don't assume your commercials will fit on a big screen. Determine the optimum sizing methods so that your value proposition and call to action are visible on all screen sizes.

Keep it Personal and Consistent.

Your videos should have the same appearance and tone and feel as your target audience. All of these can be combined to inform your OTT content's creativity. Even if it's as easy as including the physical address and website URL, your logo and brand will clearly send out strong signals to personalize and prompt action from your audience.

However, keep in mind that most individuals watch streaming video while holding or near a digital device. Keep your logo and URL visible throughout to capitalize on the direct-response aspect of this ad channel and let viewers know who you are and where they can learn more. So even when you personalize your customer's experience, they should always know it is your brand they are interacting with.

Know the Best Formats and File Sizes

This goes along with what we said earlier about the use of multiple devices. You want to make sure that the sights and sounds of your advertisements are melodious and pleasing to the eyes and ears. The basic dimensions we recommend for OTT/CTV campaigns are listed below.

● The optimum video advertisement format is mp4 (h.264).

● The maximum video file size should not exceed 200MB.

● 1920 x 1200 px or 1920 x 1080 px are the optimal resolutions for these films.

● Your video bitrate should be at least 5.4 Mbps.

● Your audio bitrate should be at least 160 kbps.

Final Thoughts

Local brands are only touching the surface of OTT advertising acceptance and usage. Advertisers will learn about the advantages of OTT advertising and include more into their marketing strategy as more people cut the cord and choose to avoid traditional broadcast television. With additional OTT advertising and on-demand services improving targeting, technology, and analytics capabilities, the future of OTT marketing for businesses is bright and open for decades to come.

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