The way in which we consume content has significantly changed over the last decade. Today, the OTT (Over-the-top) platforms have become a staple for entertainment, particularly for the millennial and generation Z audience. With the growth in the number of audiences on OTT platforms, there has also been a corresponding growth in innovation in OTT advertising.
OTT advertising is on the rise not only because it offers a completely new way of consuming digital content but also because it represents the fusion of television from the traditional era and online video from today’s digital world. According to Allied Market Research’s study, the OTT market globally is projected to reach $332.52 billion by 2025, growing at a CAGR of 16.7% from 2018 to 2025.
Because of the rise in the number of audiences on the OTT platform, there is also a rise in the number of OTT advertisers. Today, OTT Advertising is attracting huge investments by marketers and is expected to grow more, but the increasing number of regulations on popular OTT platforms like Netflix and Hotstar might act as speed breakers in this growth of the OTT Advertising industry.
What is OTT Advertising?
Before we get into details of OTT Advertising, it is important to understand what exactly is OTT advertising. So, OTT advertising is individualized content provided to the TV sets or laptops or tablets or mobile phones of the viewers while they watch the same TV show. Thus, OTT advertising is a targeted ad delivery on Internet-connected TV sets or laptops or tablets, or mobile phones enabled by programmatic technology.
Thanks to OTT platforms, advertisers can now expand the reach of their audience that previously was only available on traditional television. In fact, some experts also predict that the money generated from OTT ads will increase anywhere from 45-60%. Therefore, if you are an adtech pioneer, you will be reaping great rewards in the near future.
OTT advertising is a great method of direct marketing to the consumers digitally over the internet through streaming services.
This is the best way to reach an individual, anywhere, on any type of connected TV (CTV) or device with full-screen ads that include sound, can’t be skipped, and have an average completion rate of 97%.
What is Programmatic OTT Advertising & How it is Leading the Revolution?
Programmatic OTT advertising is the Solution for Multi-Channel Advertisers. If you have a niche target audience, programmatic OTT Advertising outperforms TV and online video ads. Often, it is non-skippable, played less frequently when compared to traditional ads, and user-initiated, which leads to more genuine views. Programmatic OTT platform offers intentional, measurable, quantifiable results.
Programmatic advertising is poised to lead a revolution in television and digital media advertising trends. A report from Pixalate revealed about a 330% rise in programmatic OTT/ CTV ad transactions in the US and worldwide. As per the global marketing platform, OTT/ CTV apps, and supply-side platforms that serve for the programmatic advertising in OTT/ CTV, sharply increased over the last few years.
OTT Ads Insertion
Client-Side Ad Insertion (CSAI)
Client-side ad insertion (CSAI) is the legacy method, through which ads are loaded within the OTT box itself before they get displayed to the viewer. This method of advertising does not provide an effective way for displaying ads to viewers, and is prone to ad blockers, but is presently the leading method in OTT devices within the OTT advertising industry.
Server-Side Ad Insertion (SSAI) and Stitching
In server-side ad-insertion (SSAI) content delivery, the advertisements are served as a seamless stream. The process developed, in real-time, a mix of advertisements and core content streamed to the client device frame-by-frame. Because ad blockers have no possibility to discriminate and understand which frames are ads and which are not, SSAI is a very effective method for ad-blocking software.
Stitching, made possible by VPAID tags, is a step forward from the perspective of viewers, but it also imposes some limitations for the advertiser. Most popular ad technologies are still developed upon client-side methodologies.
Restrictions on OTT Platforms Globally
Many countries around the world have brought OTT platforms under their media regulatory authorities, to keep a check on the content published, so that the videos don’t promote any type of illegal activities.
Singapore has the IMDA (Infocomm Media Development Authority) that mandates service providers to obtain a license. There is a content code for OTT platforms, classification of content, parental lock, and age verification, apart from the display of rating and content elements, with a very specific list of content that is prohibited. The agency can also withdraw content or impose a penalty on the publishers. Foreign entities that operate OTT services in Singapore are also bound by all such restrictions and requirements.
Australia has the ACMA (Australian Communications and Media Authority) for traditional media, and also an “eSafety Commissioner” for all the issues related to digital media. This involves restricted access to certain forms of content. The Broadcasting Services Act, 1992 (BSA) is the principal legislation that is governing the OTT sector that designs detailed guidelines on the forms of content that can be hosted online. Apart from Industry codes and industry standards, it has a complaint mechanism and refused classification to be prohibited.
In the European Union, there have been recommendations for tackling illegal online content. In 2020, a European Union paper on “Illegal and harmful content on the Internet” listed content that can be concerning to national security like instructions on bomb-making, illegal drug production, terrorist activities. It also spoke about the protection of racial hatred, minors, or racial discrimination, instructions on pirating credit cards, electronic harassment as content that needs to be checked.
United States of America
In the US, there was a proposal from Online Harms White Paper in 2019 that recommended a new regulatory framework to monitor the harm that unregulated online content does to society. Additionally, an ‘Online safety Bill’ was also proposed with an independent regulator. The US FCC (Federal Communications Commission) had earlier claimed that the regulations were “unnecessary and heavy-handed” but had sought to introduce practical regulations in order to incentivize investment.
In the United Arab Emirates (UAE), international OTT platforms are obligated to work with licensed telecom companies.
In India, while newspapers have the Press Council of India, television content comes under the Cable TV Network Act 1995 and cinema has the Cinematograph Act, 1952, but till now, OTT contents are unregulated. The Information & Broadcasting (I&B) ministry has been talking to the Internet and Mobile Association of India (IAMAI) for two years, on self-regulation of OTT content.
How will the restrictions affect OTT Advertising?
- Restricted Advertising
Due to the passing of newer and more restrictive laws, the content is tailored in various different ways across the globe, as a result, contextual targeting of an advertisement might go amiss due to wavering tailoring of the content geographically. Under such Instances, the advertisers feel increasingly restrictive of both their mode of advertising as well as the extent of profits that they can earn keeping in mind the restrictive and locked mode of OTT platforms which will top their list of woes.
- Affects Global Reach
One of the important reasons for OTT platforms to be popular is because they have made a borderless world, at least on their platforms. All the content published is available in almost all the countries. Because of different restrictions in different countries, publishing the same content without any cuts and stitches would become extremely difficult. Edits in a piece of content or making content unavailable for the audience of a particular country have a huge impact on the reach of a particular OTT platform. This limits the reach of the OTT Advertisers. Restricted reach also has a huge impact on the number and availability of the target audience of a particular audience for specific content.
- Limits Brands Line of Advertising (creative freedom is affected)
Various countries impose various types of restrictions on the OTT platform on the basis of their broadcasting rules for other platforms and the preferences of their citizens. These restrictions snatch the creative freedom from the advertisers by adding limits to their advertising creativity. These limits don’t suit the line of advertising of various brands and products. As a result, such brands back-out from advertising on OTT platforms and start looking for some new forms of advertising that suit their line of advertising.
OTT platforms are relatively new and witnessed a huge jump in the number of subscribers amidst this pandemic. Like all the broadcasting and advertising sectors, undoubtedly even OTT platforms will face regulations all around the globe in the coming time, so it is important for OTT platforms as well as OTT advertisers to strategize their OTT advertising strategy accordingly.
ABOUT THE AUTHOR
Chandrima is a Content management executive with a flair for creating high quality content irrespective of genre. She believes in crafting stories irrespective of genre and bringing them to a creative form. Prior to working for MartechCube she was a Business Analyst with Capgemini.