What Is OTT? The Guide You Need To Read

Do you belong to the media or entertainment industry? Have questions around what is OTT? Or perhaps you’re doing some heavy advertising work? Then you need to use effective ways to reach out to more people.

Such a task became even more challenging because of the COVID-19 pandemic. Advertisers and other types of businesses are feeling the backlash of the situation. Thus, you need to connect with your target market in the most effective ways possible.

And this is where over-the-top or OTT advertising comes into play. But what is OTT to begin with? It is a form of broadcasting that uses the internet as its medium.

Since it relies on the internet, it veers away from traditional broadcasting methods. But how exactly do you use OTT? How do you make it work?

What is the impact of OTT in today’s current situation? Continue reading below for a comprehensive guide on OTT advertising.

What is OTT? The Straight Definition

Let us go back to our main question: what is OTT? OTT is a form of advertising that doesn’t use traditional distribution channels. 

These channels or methods include your cable TV and satellites. Instead, OTT uses the internet to deliver the content. On the consumers’ end, all they need is an internet-ready device.

These are your smartphones, smart TVs, tablets, and laptops. Surveys reveal that the average American home subscribes to roughly three streaming services. This is crucial in the changing landscape of how people consume content. 

How Does It Work?

Does OTT sound simple? Yes, it may. But some intricacies surround the over-the-top advertising. 

To understand how OTT works, you need to understand some technical stuff. We already established that OTT relies on the internet to deliver content. In doing so, it particularly uses open internet and ditches unmanaged networks.

Furthermore, OTT uses Content Delivery Network (CDN) and Adaptive Bitrate (ABR) to ensure the best user experience (UX) possible. CDN is the one responsible for delivering your content to multiple devices.

On the other hand, it is the ABR that provides support for video streaming. The ABR pulls this off across multiple networks to ensure top-notch UX.

OTT also comes in three variants: the OTT services, the OTT devices, and the content delivery OTT apps. 

OTT services pertain to alternative services that replace traditional methods that require management using tangible materials. A perfect example of an OTT service is a stock trading app. Here, you don’t need the help of a real stockbroker to buy the stocks on your behalf.

As for the OTT devices, examples are Roku, Chromecast, and Fire Stick. Last but not least are the content and message delivery OTT apps. These are your popular streaming services like Hulu, Netflix, Disney Plus, and YouTube. 

Statistics reveal that YouTube has over 2 billion global users. Moreover, YouTube is one of the most appealing platforms for consumers. 

Think about the advertising potential YouTube offers.

OTT’s Marketing Impact

To get a better appreciation of OTT, you need to have an idea of its impact on the market. Considering people’s transition from traditional programming to a more digital one, adapting the OTT approach can do wonders for your business. 

Neilsen study revealed that young adults are watching less TV. Instead, they prefer viewing content through their mobile devices and laptops.

A big factor for this change is the dynamic lifestyle of the younger generation. Most of them are either in school or out in the field. Since they cannot bring a TV set with them, they rely on devices to view content anytime and anywhere.

And as a business owner, you want to maintain your connection with your target market. Going the OTT route will give you exactly that. OTT’s versatility translates into how consumers react to your ads.

With OTT, your audience can take immediate action concerning your ad. With a few taps on their smartphones, you can pique their interest and convert their action into a sale.

The younger generation of consumers wants quick results. If they see something of little value, they want to move onto something different in a matter of seconds.

And compared to TV ads that last 30 seconds, your audience doesn’t need to wait that long for the ads to finish. OTT ads are not as interruptive as traditional TV ads.

Opportunity to Monetize

It is also vital to discuss how you can monetize OTT video content. Let’s start with the ad-based video-on-demand or AVOD. This is the most common form of monetization that you can incorporate in OTT.

Instead of having your audience pay a fee for the content you deliver, AVOD lets you serve ads to users. The perfect example of this method is YouTube’s model. They don’t charge users whenever they watch YouTube videos.

Instead, they give them 10-second ads that appear before the start or in the middle of the videos. As for these ads, it is the sponsors who pay for them.

Another OTT monetizing option is through subscriptions or SVOD. Here, your viewers will subscribe to your service to enjoy your content. They pay a certain subscription fee in monthly, quarterly, or annually fashion.

The best example of this is the streaming giant Netflix. They stream untethered content in exchange for a subscription fee. Their content showcases a plethora of shows.

They have movies, TV series, original series, and documentaries. Netflix uses OTT’s versatility by allowing its viewers to consume content using any of their devices.

As long as you have internet connection or data, you can enjoy any of their shows. You can also jump and skip to certain parts of the shows anytime you want. 

One other option for monetizing OTT is through pay-per-view (PPV). With PPV, the audience will pay a certain amount only for the shows that they want to watch.

Key Benefits of OTT

When it comes to the advantages of using OTT, there are many. For starters, it offers targeted advertising. It comes with tools that let you track the responses of the audience, which you can use to improve your strategies.

Also, OTT lets you segment your customers. With the granular data that you will have, you can use it for customer segmentation. In turn, you can see your customers’ geography, episode retention, and the types of devices they use.

Furthermore, OTT will save you from infrastructure costs. For example, OTT lets you buy a license to broadcast a major sporting event from broadcasting networks. This means you can stream the event without using any broadcasting equipment.

Bright Outlook for OTT

If you’re looking to boost your advertising, adding OTT in your strategies is a wise move to make. 

Analysts predict that the OTT industry will grow to $161 billion by the end of 2020. Though the pandemic slowed down the industry as a whole, it will likely bounce back and stabilize by 2023.

The changing behavior of people will play a huge role in the promising future of OTT. Gone are the days when all family members sit down and watch TV together. Today, kids are enjoying their cartoons from their tablets.

Parents are catching up on their favorite series on their smartphones during office breaks. Though cable TV and the huge networks are here to stay, they are starting to embrace the changes that come with the OTT revolution. 

And if there is a perfect time to engage in OOT, the time is now.

OTT Best Practices

There are best practices to consider if you’re going to take the OTT plunge. When creating OTT videos, you need to ensure payment security.

If you are asking your customers to pay for certain fees, you need to give assurance that their money and personal information are safe. Keep in mind that hackers are everywhere.

They know how to spot loopholes in payment structures. Thus, you need to practice encryption when securing payment information.

Another non-negotiable practice is securing the delivery of your video streams. This means keeping your content exclusive and safe from digital piracy.

You also need to practice server-side ad insertion. This will help minimize the impact of ad-blockers that your users may have on their computers. Though these ad-blockers protect users from malware, they may hurt your revenues.

To bypass this, you need to insert ads on the server. You must do this before your video content reaches your audience.

Last but not least, you need to have a solid marketing plan. This may be confusing for start-ups. But hiring a reputable digital marketing company should do the trick.

Let’s Work on Your OTT Ads, Today!

Now that you can answer the question “what is OTT,” you can review your business plan and determine how it can increase your audience reach. But if you already have too much on your plate, we can step in and give you a helping hand.

Connect with us today and let’s discuss your OTT options. We offer full-service digital marketing that also includes YouTube Ads, Audio Ads, Web Design, and SEO. Tell us about your business plan and let’s work on your OTT, today!

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