Consumers have shown behavior change when it comes to video content. Remember when you would gather around the television set with your family, waiting for your favorite show to air? This isn't the scenario anymore in most households.
With the rise of OTT platforms, viewers consume content on their own time, on a device they choose. A viewing schedule does not bind them.
This has opened the door to targeted advertising—the ability for advertisers to show ads to select consumers based on the devices they're using and the content they're watching.
Previously, when users would watch the same television shows at the same time on traditional TVs, they would all see the same advertisements. But with OTT, every user sees a different ad, customized based on that user's browsing behavior. This is what we call Over The Top advertising, or simply, OTT advertising.
Dive deeper into the world of OTT: check out our guide to OTT apps.
Advantages of OTT Advertising
With traditional television advertising, the same ad was shown to everyone, whether or not they were the right audience. With OTT advertising, the ads reach a relatively smaller audience, but they reach the right target audience. Advertisers can choose whom to target based on their preferences, ensuring a better conversion rate and higher revenues for the OTT platforms.
In addition to better targeting, it's important to show ads where the viewers are hanging out. According to Statista, worldwide user penetration in 2023 is expected to be about 45.7%, whereas, in 2027, it's expected to be near 50%. So it makes sense for advertisers to redirect their advertising budget to platforms their potential customers use most often.
Covid-19 has played a huge role in this shift toward OTT content consumption. When the world was witnessing a lockdown, there was a shortage of new television programs—for example, there was no new sports coverage, and no new soap operas or drama series were shot for broadcasting. So naturally, people turned to OTT platforms with a wide variety of videos available that could be streamed whenever they wanted.
This trend continued even after the pandemic. According to Demandsage, 65% of OTT users now watch videos on mobile phones and TV apps. The convenience of watching diverse content whenever and wherever remained with viewers even after the world started opening up after the pandemic, prompting content creators to shift their focus from traditional television broadcasting channels to versatile OTT platforms.
Where Are OTT Ads Displayed?
OTT ads are displayed on OTT streaming platforms across various devices. Essentially every device that can stream content over the internet can show OTT content and, thus, OTT ads. Some of these devices are:
- Smartphones
- Connected TVs
- Computers/laptops
- Gaming consoles
- Streaming devices and Smart TVs like Apple TV, Roku, and Amazon Fire TV
How to Make Money with OTT Ads
You can make money through ads on your OTT platform in two ways.
Guaranteed Insertion Orders
You can sell ad space based on a fixed number of impressions for a fixed price, depending on your customer base and their preferences. This is a good strategy when your user behavior is erratic and you don't want to rely on the number of user impressions for your content.
Programmatic Advertising
Programmatic advertising involves real-time bidding between advertisers for displaying their ads on your OTT video inventory. This depends completely on your traffic and does not guarantee any minimum amount of money you'll make with this strategy.
Getting Started Monetizing Your Own OTT App
To start making money from OTT ads, you first need to be able to deliver content to OTT platforms. This is where Zype comes in. You can make your own app with absolutely no coding experience by using Zype's technology and submitting it to all the OTT marketplaces. Or you can start your own FAST channel to replicate a linear content experience across digital OTT platforms.
With Zype, you can stream your live or on-demand content to your own app or the digital viewing platform of your choice. So what are you waiting for? Get started now and start making money through OTT advertising. For more information, book a demo today.