Television ad sales dropped by 3% in 2019. From 2020 to 2021, the number of American households that paid for traditional TV dropped by 7.5%, with this decline expected to continue steadily. 

With ad sales dropping and cord-cutter households increasing, streaming services are booming. Experts estimate that, by 2024, United States subscription video viewership will reach 220 million people.

The vast majority of these viewers will stream videos through an over-the-top (OTT) device, like a Roku or Amazon Fire TV. And that is precisely why many advertisers are shifting their budgets away from cable and satellite TV and toward OTT advertising.

In this post, we examine what OTT advertising is and how it can benefit publishers. Keep reading for more information. 

To learn more about OTT advertising for your brand, talk to the video advertising experts at Playwire. 

What Is OTT Advertising?

The term OTT comes from the days when your primary streaming video option was a box-like device that you placed over the top of your television. 

In a few short years, OTT devices have come a long way. Now, OTT refers to any type of streaming content coming through Roku devices, Amazon Fire TV sticks, smartphones and tablets, gaming consoles like Playstations, and even in-browser streaming on a laptop or desktop computer.

OTT advertising is the simple act of placing ads on streaming channels. Amazon Prime, Hulu, and Netflix are some of the better-known and widely available streaming channels, but thousands of publishers have created their own OTT channels. Most of these are monetized with ads. Because OTT is all about video, the ads on OTT content tend to be video, too. 

OTT vs. CTV

When publishers start looking into OTT advertising, they often encounter loud voices using the wrong terms. Let’s clarify something now: OTT is not the same thing as a connected TV (CTV).

OTT refers to the content you stream. CTVs are the devices you use to stream content, such as smart TVs, consoles, and Rokus.

Clearly, the two terms are related. Most OTT content is viewed via CTV. But when you discuss advertising in the streaming video world, publishers want ads on OTT content — not on CTVs themselves.

Benefits of OTT for Publishers

OTT advertising is a wide new world of revenue opportunities for publishers. Here are the primary ways OTT can benefit publishers:

1. Cross-Channel Content Availability

If you run a content site and get most of your audience from mobile and desktop web browsers, that’s great. But wouldn’t you like to expand that audience to include more than just the people who are browsing the internet on their phones or laptops?

By making your video content available on an OTT channel, you can do exactly that. OTT is distributed to countless devices. If you have an OTT channel for your content, you have content that’s available everywhere, from gaming consoles to the family TV. And then, you can place ads on that content to boost your revenue.

2. Expanding Content Libraries and Fostering Growth

Publishers work hard to build a body of content that keeps viewers engaged. When you dive into OTT, you find more opportunities to build exclusive OTT content and put your existing content library in front of more faces.

That fosters growth — both for your audience and your advertising revenue.

3. More Opportunities for Ad Revenue

Yes, building out an OTT channel provides another spot where you can sell inventory to advertisers. That’s great. But OTT ad revenue opportunities go deeper than that.

How? By providing what advertisers view as a “premium” viewing experience. Think of it like this: A video ad on your website is awesome, but a video ad on a 4K 75-inch TV is an experience. And that means you can charge advertisers more for your OTT inventory.

That’s not to mention the fact that streaming content to televisions and similar devices leaves open the possibility of co-viewership when multiple people are watching TV together, and all see the same ad. That gives advertisers more bang for their ad bucks and is another justifiable reason for publishers to increase their prices.

4. Less Volatility

Web publishers who have been in the game for a while know how volatile the publishing and advertising world is when you rely on one company’s rules (Google) for both search engines and the world’s most popular web browser. 

When Google updates its search algorithm or releases new advertising standards, it’s chaos. Too many publishers lose revenue as a result. 

Diversifying revenue streams can be as important for publishers as diversifying investments can be for brokers. OTT advertising is a reliable way to diversify ad revenue.

Why? Because this is a nascent industry with fewer rules than internet advertising. And OTT channels are immune to search algorithm updates — if a user has downloaded your OTT channel, they’re exposed to your content no matter what Google or any other search engine does.

Creating an OTT Channel

We should take a quick break to talk about what many publishers view as their biggest barrier to entry for OTT advertising: creating an OTT channel.

Many publishers, especially smaller and mid-sized ones, view OTT as a someday fairytale — not a realistic opportunity for growth. They often are more likely to opt for a mobile app.

Mobile apps are great, but creating an OTT channel is not as difficult as you might think. Many companies offer a relatively low-cost Whitelabel OTT channel creation, allowing companies to launch highly customized, affordable OTT environments quickly. You just populate the channel with your content and submit it to the major OTT device services.

OTT Advertising Best Practices for Publishers

As a publisher, you stand to gain revenue by diving into OTT advertising. But going in blind can limit your revenue gains. Follow these OTT advertising best practices for publishers to maximize your OTT ROI.

1. Base Ad Format on Your Content

Just like you would in traditional advertising venues, you need to balance ad frequency and length with your content and the user experience. Let the length of your content determine how often you show ads and for how long you show them. 

For example, if you publish long videos, such as hour-long episodes of a serial show, you can get away with “pods” of ads between episodes — maybe even as a break in the middle of an episode. 

If instead, you publish short video clips of only a few minutes, pods of multiple ads don’t make sense. Viewers are on your OTT channel for the content. Having too many ads takes away from that. 

2. Consider Paid vs. Free OTT Models

For publishers, OTT revenue doesn’t have to be all about the ads. Many publishers offer a free OTT experience that includes ads and a paid experience that doesn’t.

This gives users who don’t like ads an out. They can still consume your content without having to sit through the ads — for a price. Even a modest per-user fee can be more lucrative than what you would have made on that single user via ads over the course of a year.

This model also gives you a chance to dial up ad frequency on your free OTT channel to encourage more subscriptions and more ad dollars. Finding the right balance can exponentially increase your revenue. 

3. Offer Something New

Don’t just take your existing content and slap it on your OTT channel. Your existing content should be available, but your OTT channel needs to offer something new or exclusive. 

Without new or different content on your OTT channel, what motivates a user to engage with your content via OTT devices? Many TVs can display web browsers, so you have to give viewers a reason to engage with your content — and your ads — on your OTT channel specifically.

Boost Your OTT Ad Revenue with Playwire

Publishers who aren’t expanding into the OTT world are missing out on serious revenue opportunities. At Playwire, we help publishers amplify their ad revenue across devices and content types. That includes OTT.

Reach out to our OTT experts by calling 1-561-206-4621 or contacting us online today.

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