OTT Advertising: Explanation & Statistics
The way of advertising has changed in recent years. The OTT system influenced this change. As people switch to OTT services, new forms of ad targeting appear to reach users of video streaming platforms. In this article, we are going to observe what OTT advertising is and how to advertise on your OTT platform.
Let’s dive into the details.
What is OTT advertising?
OTT stands for “over-the-top.” The term refers to platforms that allow access to different kinds of content over an internet connection. We focus on video content here. Therefore, OTT advertising is advertising via OTT video streaming platforms.
OTT advertising is a method of delivering ads directly to the devices of end-users over the Internet. Everything happens via OTT video streaming platforms.
OTT advertising is better than TV commercials for many reasons. For example, OTT platform functionality can offer powerful targeting capabilities. They help to show ads accurately to people who can be interested in the product or service displayed. Consequently, there are more chances that these people will buy a product or service, and the revenue the advertiser receives will increase.
OTT advertising is on the rise
Let’s look at some statistics and facts. According to Statista, OTT video advertising revenue is expected to reach $119 billion in 2023. And the total number of AVOD (Advertising-based Video-On-Demand) services is predicted to reach 3,349 billion people by 2025.
Moreover, 65% of people having a second screen observe service or product information while watching OTT content. And 40% of viewers pause content to learn more about the product or service advertised.
72% of OTT users can remember an ad they saw while viewing content.
Remember about subscription fatigue. It shows that people who recently subscribed to video streaming services start using ad-based services now. They are tired of subscriptions. That’s why they look for services that offer free content. They accept the fact that they will see ads at any time during the video. 25% of OTT viewers admitted that they are happy to watch a 10 minutes advertisement if the content is free.
OTT ad-insertion models
There are two primary methods of inserting advertisements in video content:
- SSAI. SSAI stands for server-side ad insertion, or sometimes it is referred to as dynamic ad insertion. It is when a bunch of manipulations happens on the server side. The result of SSAI advertising is the ad inserted in the video. The ad and the video are stitched together so that the ad blocking doesn’t generally work.
- CSAI. CSAI stands for client-side ad insertion. CSAI is delivering ads to devices, including smartphones and desktop computers. The video player sends a request to the server to stream an ad when a certain ad-marker is reached during the playback.
SSAI can be higher in terms of price than CSAI. However, it can bring more ad impressions. Ad blockers are less effective because there is tighter integration between a video and an advertisement. What is more, ad blockers were configured to prevent CSAI ads.
With varying bandwidth conditions, SSAI can provide high-quality video streaming, which improves the viewing experience. Users are more satisfied because ads don’t cause them much trouble.
People are turning to advertising-based video streaming services because they reduce the number of subscriptions they have and save them money. With a million such services out there, people can save a fortune. However, ad-based still can bring a service provider a lot of revenue.
If you want to create an ad-based video streaming service, contact Setplex. They have an appropriate OTT solution and will help you launch.