OTT Advertising: What Should a Business Know?

OTT Advertising: What Should a Business Know?

Suppose you are running or going to run a video streaming service. You are considering what monetization you should select to maximize your revenue. There are ads, subscriptions, and pay-per-view. All of them have their benefits and drawbacks. 

The video streaming industry is evolving. Recently, the subscription-based monetization model has been the most popular among all. Today, many video streaming services are opting for hybrid approaches. For example, Netflix introduced an additional ad-based subscription plan in addition to an ad-free subscription package. The first one is lower-priced compared to the one without ads. However, some services such as NimiTV stick to one monetization model.

OTT advertising is gaining popularity as viewers switch to services they don’t need to purchase to watch. Let’s observe the advertising-supported monetization model in detail and cover essential terms, such as client-side and server-side ad insertion.

What is OTT Advertising?

OTT or over-the-top refers to services that deliver media content to viewers via the Internet connection. OTT advertising is running commercials on your service. 

Usually, ad-based services are free for consumers. They don’t pay for accessing content but watch commercials during the video playback instead. Advertising on online streaming services has more powerful targeting capabilities. As a result, people see commercials they can be interested in. It means that there are a lot of chances that they will click on the ad to learn more about the product or service advertised.

Ad-Insertion Approaches

There are two ways to insert commercials into a video:

  • Server-side ad insertion (SSAI) – all manipulations happen on the server side, which means that an ad video is smoothly inserted into the video. As a result, a commercial seems to be a part of the video because they are stitched together. Moreover, ad blockers cannot detect and block ads inserted that way. 
  • Client-side ad insertion (CSAI) – ads are delivered to devices. The server transfers a commercial video when the ad marker is reached during the playback.

SSAI can be more expensive than CSAI but more profitable as it brings more impressions, and ad blockers don’t work. Also, it can help you provide better video quality to improve the quality of service.

What are the Benefits of OTT Advertising?

#1 You reach more people

An ad-based video streaming service is a win-win-win for content providers, advertisers, and viewers. Everybody gets what they want. Consumers watch free original content, providers generate revenue through ads shown to viewers, and advertisers reach potential customers. 

As video streaming services operate on multiple platforms and devices, your chances of attracting multiple viewers are increasing. 

#2 The targeting is more accurate

Television ads were shown to all people. Compared to them, OTT advertising is more accurate. You can divide viewers into segments based on their interests, demographics, and behavior and show particular ads to them. It helps maximize the chances of reaching those who might obtain the product or service. 

For example, a 19-year-old girl will have different interests than a 30-year-old woman, although they can watch the same video. 

#3 Ad blockers cannot detect the ads

Ad blockers are widespread among viewers blocking annoying ads everywhere on a website page. As a result, advertisers lose revenue. 

The SSAI technology can help you solve that problem by inserting ads on the server side. The ad seems to be a part of the video, and an ad blocker doesn’t detect it. 

Check if the solution for video streaming you obtain has such technology implemented. 

Drawing the Line

Advertising is gaining popularity due to its multiple benefits. Viewers don’t mind watching ads in exchange for free content, and providers take advantage of that. Advertisers also receive their profits. 

Moreover, companies developing solutions for video streaming implement SSAI so that ad blockers don’t block your ads. 

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