OTT Advertising – Can a Business Benefit from It?
The video streaming market is changing. Recent events show that advertising-based (AVOD) video streaming services will likely be more popular in the near future. Viewers are turning to AVOD services because they are ready to watch several minutes of commercials in exchange for free content.
In some regions, AVOD services seem to replace subscription-based platforms. It looks like this trend is getting stronger.
Let’s give a closer look at ad-based video streaming services.
What is OTT Advertising?
OTT refers to over-the-top – these are platforms that distribute media content over an internet connection. Therefore, OTT advertising is running commercials on OTT video streaming services.
It is better than TV advertising for multiple reasons. To begin with, OTT platform functionality provides powerful targeting tools. As a result, the ads are shown to people who might be really interested in the product or service advertised. Consequently, a lot of chances are that viewers will click on the ad and obtain the product or service.
To compare, TV commercials are shown to all viewers regardless of their interests and preferences.
Many people use several video streaming services. There are a lot of chances that some of these services are ad-based. Furthermore, these services are available on multiple devices, including Smart TVs, smartphones, tablets, and computers. It means that you can reach a wider audience.
Statistics on OTT Advertising
The experts predict that ad revenue for OTT advertising will reach almost $162.2 billion by 2026. It will take 58% of all OTT revenues.
OTT commercials proved their efficiency as 66% of people discover a new product or company via ads. What is more, 65% of viewers having two screens used the second one to explore the product. And 40% of people paused the video to research or pay for the product displayed.
Remember the subscription fatigue phenomenon. Viewers are switching to ad-based services to save their money now. They are looking for platforms that offer free content. People can handle several minutes of commercials during video playback.
However, it seems like the turning-to-ad-based-plans trend is more popular in the USA than anywhere else.
Ad-Insertion Models
There are two primary models of inserting ads in video content:
- SSAI (server-side ad insertion). Sometimes, it also refers to dynamic server-side ad insertion. SSAI means that all manipulations occur on the server side and result in the smooth insertion of an ad in a video. The ad and video are stitched together in one piece. One of the additional positives is that ad blockers cannot detect commercials and block them. As a result, your revenue is saved.
- CSAI (client-side ad insertion). CSAI delivers ads to devices. The server receives a request from the video player to stream an ad when an ad marker is reached.
SSAI can be more expensive than CSAI but also more profitable. It can bring more impressions. Furthermore, ad blockers are less effective because the video and ad are tightly stitched together. An ad-blocker sees them as parts of a video. In fact, ad blockers are often configured to prevent CSAI ads from playing.
SSAI can also provide high-quality video streaming, which improves the user experience.
Final Thoughts
Netflix made a lot of buzz with its launch of an ad-based tier. Many video streaming services also got involved in implementing new packages. The reason is viewers opt for services offering free content. They don’t mind watching several minutes of commercials during a video in exchange for saving money.
Researchers also projected the growth of the advertising-based video streaming market.