The Top Questions about OTT Advertising

As streaming devices have steadily taken over the market, the rise of over-the-top (OTT) advertising has followed suit. Here at Strategus, we have seen first-hand (and even invented), many of the most sophisticated, advanced, and effective techniques to deliver audience-targeted ads in the OTT environment.

However, considering that OTT advertising is still evolving, some of the basics remain unclear to advertisers. Before diving into any campaign, advertisers should be familiar with foundational concepts about this exciting form of advertising.

With that in mind, we assembled a list of the most common questions about OTT advertising that we encounter at Strategus. These questions and answers will help set up an advertiser for a successful OTT campaign.

The Most Commonly Asked Questions about OTT Advertising

How does OTT advertising differ from other popular forms of video advertising?

Enhanced targeting and tracking features set OTT advertising leagues ahead of traditional forms of advertising. Advertisers can target to a certain extent with traditional advertising, for example, they can run ads during a TV show with a strong fan base in a certain demographic. With OTT advertising, ads can be served directly to a member of a relevant audience segment. These segments go far beyond gender, location, and age – allowing advertisers to target by income bracket, level of education, or even ethnicity.  

In simpler terms, traditional advertising casts a wide net while OTT advertising is far more focused.

On top of that, OTT advertising gives advertisers valuable data in terms of who is watching ads, how long they’re watching, what types of messages users interact with, and much more. This data is invaluable in increasing the effectiveness of future OTT campaigns.

How is OTT advertising priced? How does pricing for OTT differ from traditional advertising?

In terms of pricing basics, OTT is priced based on a CPM (cost per thousand impressions) basis. This is very much in line with how virtually all other digital media is priced (the one exception being Paid Search, which follows more of a cost-per-click basis), and will be more familiar to most advertisers.

This pricing model stands in stark contrast to a ‘traditional’ pricing method used by linear television advertisers. These advertisers typically rely on an antiquated rating points basis, using metrics such as cost per point (CPP), gross rating point (GRP), or television rating point. These models tend to be out of date and less effective than OTT pricing.

However, the real beauty of OTT pricing is found in the programmatic nature of OTT. For example, because Strategus executes programmatic OTT, everything bought is in literal Real Time – as fast as 144 milliseconds or less. This means that we are never stuck with aging inventory that may be prioritized unfairly or disingenuously. Everything is bought in Real Time, and only when the targeting matches the client’s targeting parameters.

This is quite a bit different from other streaming services, which may have an obligation to serve a certain inventory at any given time, placing those needs ahead of the client. That is not the case with Strategus. Between our massive inventory and programmatic bidding, we can buy and serve content in Real Time, via the best, most targeted inventory available anywhere.

First, as mentioned earlier, it is important to understand that by its very nature, OTT usually exists in a cookie-less, click-less ecosystem. Therefore, it can be a challenge to track “ironclad” ROI, or at least, as most traditional marketers might think of it.

However, that doesn’t mean there is no way to glean a good understanding of the effectiveness of OTT dollars spent; it just means we need to contextualize OTT ROI properly.

For example, we encourage clients to first look at OTT as an extension and enhancement to a traditional TV buy. Think of a question like, “What ROI metrics and methodology are you using to measure TV?” At a bare minimum, OTT can (and should) meet the expectations for how a TV campaign can be measured.

But beyond this, OTT contains several different micro-actions & micro-metrics which can help put together a more traditional ROI picture. These include things like:

• Video completion rate
• Interaction rate
• Attribution rate
• Visit rate

Each of these metrics can be very useful to measure the ‘upstream’ effectiveness of the ads.

We like to use a simple analogy to put all these pieces together. Think about a car dealership. Their ultimate goal is to sell cars, obviously, but they can measure “upstream” to see how effective different metrics are working. For example, they might know things like:

• How many clicks on their website lead people to look up directions?
• Of those that look for directions, how many generate a visit to the dealership?
• Of those who come to the dealership, how many purchase a vehicle?

Each of those metrics can help put together a complete ROI picture, starting at the top and working its way down. The same line of thinking holds for OTT, using the metrics listed above. When we think of it this way, all of it can be pieced together to tell a compelling ROI story.

How is OTT advertising performance measured?

From a basic perspective, OTT performance is measured via a few clear-cut metrics:

Video Completion Rate (VCR): That is, what is the rate at which users completed the video presented to them?

Attribution: Attribution is all about post-view visits. Or in other words, once a device or person has been exposed to an ad, at what rate did they come and visit the website?

Click Through Rate (CTR): CTR is, obviously, highly device-dependent, and is not always applicable. However, when users are watching an OTT ad through a web browser, it becomes only natural that we can then follow them through to the site itself and measure conversions accordingly. 

In addition to the basic measures, Strategus also has a few new and exciting measurements that we are rolling out and evolving in 2019. These include:

• Shopper / SKU-based purchase data
• Foot traffic data. That is, we can map a user’s exposure into an actual store (for example, by tracking via a cell phone). This can be a pricey option, but for the right client and the right campaign, this can be worth it.

Finally, when thinking about OTT performance, it is also important to consider the rate and distribution of the ads being served to clients. One of the benefits of the way that Strategus executes OTT is that we can serve impressions evenly and smoothly throughout the month. That is, content can be delivered in an even way to users, without bombarding them with the same ad over and over and over again.

Three unique aspects of Strategus allow us to do this sort of OTT optimization:

1. The programmatic nature of the ads naturally lets us regulate impression flow day in and day out from different sources. This helps ensure things are always fresh and don’t get repetitive for users.
2. Strategus has an exceptional level of hands-on, human experience to manage campaigns manually. Our ad ops team has human eyes on campaigns all week, and everything is being actively managed to ensure a smooth and even delivery.
3. For those not doing video ads programmatically, they might not have enough inventory when factoring in targeting and goes. Thankfully, this is not an issue for Strategus thanks to our huge inventory.

Beyond age and demo – what targeting capabilities are available with OTT advertising?

One of the best and most useful things about OTT is that the targeting capabilities are almost endless. Because of the massive amounts of data available to OTT advertisers, we can target users based on virtually anything.

This includes things like:

• Traditional demographic data (e.g. age, gender, education, ethnicity, income level, etc.)
• What TV shows do they watch
• What the audience buys, where they buy it, and at what frequency
• Via a customer’s CRM data file. (Similar to lookalike audiences)
• Where they have physically been
• And so much more…

There is almost no limit to the types of targeting available with OTT. And this is in spite of the fact that OTT is not cookie-based. When you work with a partner like Strategus, we can still bring all the traditional targeting capabilities available via Big Data into a TV or click-less environment. The entire arsenal of targeting is available.

Where does OTT targeting data come from?

OTT targeting data comes from two different sources: first-party data and third-party data providers.

First-party data are sources that you, the customer, actually own. Examples of this would be customer lists that you own and control, such as a list of all customers who have ever stayed at your hotel.

Third-party data comes from data segments that are typically licensed and purchased from advanced data providers. Examples of this include segmented lists curated and sold by companies like Oracle, Data Cloud, Axiom, Nielsen, and many others in this space. There are hundreds of third-party data sources which Strategus has access, getting as granular as a customer loyalty card or credit card data.

The combination of these data sources allows for an incredible level of sophistication and targeting.

What comes next?

These questions and answers represent just the tip of the iceberg when it comes to OTT knowledge and capabilities. The level of sophistication, detail, and targeting that OTT provides is what makes it such a powerful and effective platform. But naturally, that makes this a very complex ecosystem.

Strategus is proud to blaze the trail of OTT innovation. If you have further questions or inquiries we would love to connect with you today.