OTT advertising is a growing industry. In fact, in 2022, OTT ad revenue is expected to reach nearly $5.5 billion globally and $2 billion in the U.S. alone. But many marketers have yet to fully understand this space—and why they should be investing resources into it now more than ever before. We'll explore how over-the-top internet TV differs from traditional broadcast television, how marketers can measure ads on OTT platforms more accurately (or inaccurately), and why imprecise measurement matters for brands today and into the future.
What Is OTT?
So, what exactly is OTT?
OTT, which stands for “over-the-top” entertainment, is a digital media delivery system. It’s also a type of digital media content consumption and delivery. It can be used to describe how you watch TV as well as other forms of entertainment like movies or music videos.
How is OTT different from traditional TV?
OTT is a term used to describe the delivery of internet content over the internet. It does not refer to a specific type of content, but instead refers to any type of media that can be delivered via multiple platforms using a variety of devices. OTT services are typically offered as an alternative to traditional TV packages, although some people do subscribe for both traditional cable or satellite television and OTT services.
In addition to being offered as an alternative delivery method for existing programming, some companies are also offering new channels specifically designed for use with OTT services. Services like Netflix, Hulu and Amazon Prime Video offer original programming that can only be viewed through their respective apps or websites—meaning they aren't available on traditional cable networks at all!
What are the most common ways to monetize OTT?
There are three ways to monetize OTT: advertisements, subscription fees, and product placement.
Advertising is the most common way that OTT services are funded. Advertisements can be viewed before or during a program, or they can be inserted into the content itself through banner ads or pop-ups. Some companies even use targeted ads based on what you're watching (or searching for).
Subscription fees are another option for funding OTT. Subscription fees may be included in your cable bill or paid for separately—the choice depends on whether you want an ad-free experience or if you're happy with commercials as long as there's no cost attached to them (you don't have to worry about paying extra). If you want an ad-free experience without paying more than your usual cable bill every month then it might make sense not only from a financial perspective but also from a moral one: many people would feel uncomfortable paying more money in order not only enjoy something which already exists but also because they don't like seeing ads at all times either due to their nature (i.e., being offensive) or because they simply think it's unfair seeing how much money companies make off us just by showing some product
How do traditional broadcast ad measurement metrics compare with OTT?
In the past, OTT was not a mature medium. As a result, there were only a few metrics that could be used to measure its effectiveness: total views and average view duration. But now that OTT is becoming more popular and mainstream, there are many new ways to measure its success. For example, advertisers can compare their OTT campaign data against traditional broadcast ad measurements like reach (total number of people who saw an ad), frequency (how often they saw it) and engagement (time spent watching).
The OTT advertising and measurement landscape is still maturing.
The OTT advertising and measurement landscape is still maturing. While it may not be as mature as traditional broadcast advertising, advertisers can use OTT to achieve similar results by measuring key metrics like reach and frequency. But the challenge with OTT is that its content isn’t always consistent from one provider to another, which makes it more difficult to measure how many people are watching videos on certain apps or streaming platforms.
As noted above, measuring impressions can be challenging due to the wide variety of providers in this space: some video-on-demand (VoD) services have branded content while others don't; some require user login while others don't; and so on. Moreover, the quality of viewing experience varies between different devices due to different screen sizes and resolutions used across devices such as mobile phones versus tablets or computers.