OTT stands for “over-the-top,” the term used for serving video content via the internet, without requiring users to subscribe to a traditional cable or TV service.
OTT is a subset of VOD (Video On-Demand) which also includes cable and satellite services digital offerings.
Any device the allows a user to access video content delivered via the internet such as connected/smart TVs, set-top boxes, gaming consoles, mobile phones or tablets
Types of OTT Platforms and Applications
There are several different types of OTT platforms and applications made readily available through internet-ready devices.
SVOD, Subscription Video On Demand
SVOD is the most similar to traditional TV, allowing users to watch unlimited content as they desire at a flat rate per month. Major services include Netflix, Amazon Prime Video and Hulu, Apple TV, HBOMax and Disney+
In regards to OTT advertising, most SVOD providers do not run advertising and only charge a flat monthly fee, while others do have ad-supported options for their own original or licensed content from particular cable networks.
TVOD, Transactional Video On Demand
TVOD is when consumers purchase content on a pay-per-view basis. This includes two types of content transactions – electronic sell-through (EST), when you pay to gain permanent access to a piece of content; and download to rent (DTR), where a buyer has access a piece of content for a limited time.
TVOD services tend to offer more recent releases, and since these are considered single direct purchases, TVOD content does not tend to support any OTT advertising.
Example TVOD services include Apple’s iTunes, Sky Box Office and Amazon’s video store.
AVOD, Advertising-based Video On Demand
AVOD content is usually free to consumers to use in exchange for watching video advertising. Some of the top ad-supported video services are YouTube, Pluto TV, Tubi and VUDU. AVOD is also offered by many major publishers directly such as Conde Nast and Vice Media.
Many platforms offer a hybrid model with these VOD types. For example, Amazon Prime offers SVOD content that is included in your Prime subscription, but they also offer TVOD content that is available for direct rent or purchase.
Additionally, Hulu offers a hybrid of SVOD and AVOD based on the pricing tier of your subscription.
OTT Advertising is available through a variety of different forms. An advertiser can work directly with an OTT publisher content provider, an OTT platform with several publisher partnerships, or a programmatic provider with access to several different OTT content providers.
OTT Advertising can also be referred to as Connected TV (CTV) Advertising.
OTT Publisher Direct Advertising
OTT Publishers are considered content providers that distribute their video programming digitally through OTT apps, on different devices and platforms.
This inventory can be purchased as a standalone OTT buy from these providers or, as part of a cross-platform package that targets content across multiple devices and channels.
For example if you do a direct publisher advertising campaign with ESPN, you can run advertising solely on their OTT app content or do a multi-channel buy which may also include ESPN.COM or ESPN’s Mobile App.
Many of the major publisher direct OTT opportunities are with the largest television networks through their digital streaming offering, such as ESPN, ABC, CBS and FOX.
Platforms like Hulu and Youtube also create their own content, classifying them as publishers in this instance. This also enables advertisers to run OTT ads directly with them during their original content titles.
OTT Platform Direct Advertising
Another advertising opportunity lies with the OTT device platform providers themselves. This can include plug-in devices such as Amazon Fire Stick and ROKU, Smart TV providers such as Samsung and Vizio, or even gaming consoles such as Microsoft Xbox and Sony Playstation.
The OTT offering can greatly vary based on the platform provider and which publisher apps they are partnered with beyond their own content properties.
Programmatic OTT Advertising
Lastly, there are several programmatic providers that are integrated with a wide variety of OTT publisher exchanges or supply-side platforms (SSP).
Programmatic buying is a great way to extend advertising reach across a variety of different content providers or target a certain audience profile using 3rd party data targeting sources.
Programmatic OTT buying tends to be across non-guaranteed exchange-based inventory. However, if you are looking for very specific OTT inventory, there are programmatic guaranteed and private marketplace opportunities made available with certain publishers.
OTT Advertising Pricing
OTT Advertising is priced on a CPM — cost per thousand viewers.
According to eMarketer, CPMs for OTT in-stream video ads were priced on average between $19 to $30.
To determine your own pricing strategy for OTT advertising, use our CPM Calculator.