OTT (Over-The-Top) Advertising

I remember my friends talking about new episodes of “Game of Thrones” and their discussion moving towards apprehension regarding what will happen in the next episodes. Recently, in the lock down period, my friends suggested me to have a look at the series “Money Heist” on Netflix. This showed me the curiosity of these folks on these services.

What are these services called? Well, these are the OTT services. OTT can be defined as a different channel where content is delivered to the end user via an internet connection rather than a traditional television broadcaster/ cable provider.

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What does OTT include & it’s sub-categories?

The info graphic below will sum up everything in one.

[Fact] – Do you know that Hotstar captures a gigantic 70 percent market share in the Indian video streaming market & Netflix which holds more than 40% of market in the United States covers only 1.4% of the industry in India? In the continuation, Hotstar is targeting to increase its reach to 300 million subscribers, Amazon Prime Video & Netflix are growing day-by-day and giving the toughest fight to the television industry which are having conventional “over the air” services like cable/broadcasting networks.

Seeing this reach, target audience & granular level of data that can be generated, OTT advertising has emerged as the niche player in the market of advertising industry. It is also expected that OTT ad revenue will increase 45% to 60% in next five years, AdTech pioneers and early adopters of OTT advertising will reap its benefits in the near future. OTT Advertising – much like advertising on TV but inducted on “Over the top” platforms/services like Hotstar, Netflix etc.

Where do these ads get shown?

Over the top video advertisements can be displayed across a myriad of devices and streaming services (such as OTT apps). Now. First, there are some OTT platforms that allow advertisements like Hulu, Roko etc. But there are other premium services like Netflix which does not support ads.

These advertisements are shown to ad supported services only & those platforms where ads are not supported, companies cannot render those services but if we talk about YouTube TV, Hulu, Hotstar etc., they have a free subscription which are supported by ads & these platforms also earn their revenues from it.

As per the statistics, Hulu & Roko (streaming device) has gained more than $742 million through ads.

Is OTT the only viable option of a Traditional TV?

Well, at this point of time having an advanced digital strategy is the need of an hour & as they have the maximum reach, granular level of options to have your target markets ultimately allows to reach every household – becomes easy in OTT platforms. However, when we go deeper to look at this change, people moving from traditional TV to OTT streaming devices/ services shows the shift in consumer behavior in the television industry.

Moreover, mass exodus from traditional TV has been accelerating since 2019 & this lockdown has only intensified the process. The companies have started segmenting their audiences & have also given the fancy names as shown in below.

Benefits of these Platforms

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Challenges of OTT

Beyond being a very fragmented landscape with competing business models, OTT is still a new channel with inherent challenges for any brand looking to make the leap to the big screen. Moreover, click-in- store traffic is not as simple in OTT as in other digital platforms, therefore this increases the uncertainty for few marketers for the assessment of measurements of their campaigns.

But the question arises of how are OTT ads delivered? How companies select their audiences on OTT platforms? We will tell you more about it in upcoming articles. Till then leave your thoughts in the comments section. Happy Learning!

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