[Brid Talks] Episode 1: The State of OTT and OTT Advertising in 2021

Dear publishers,

We’re excited to announce the launch of Brid Talks — a show where we talk about everything video, streaming, and ad tech! 

In today’s episode of Brid Talks, we talk to Igor, Brid.TV’s Senior Publisher Relations Manager about the state of the OTT and OTT advertising industries, should publishers invest in it, the challenges they can expect to face, and how to overcome them.

If you’re a publisher thinking about entering the OTT market or just wish to learn more about OTT, you’re in the right place.

You can listen to the full-length episode below.

Alternatively, check out the timestamps to everything we covered and key takes for each section below.

Timestamps & Key Takes

1. Intro

~00:00 – 00:35 (Back to Top)

2. What Is OTT?

~1:34 – 3:06 (Back to Top)

OTT (over-the-top television) is a broad term for watching any video content delivered over the internet, most commonly to smart TVs and mobile devices.

3. Why Is OTT so Popular?

~3:07 – 4:22 (Back to Top)

One of the main reasons OTT is becoming so popular is its accessibility. Nowadays, people can access on-demand video from almost any device and watch it whenever they want. 

4. Is OTT Here to Stay?

~4:23 – 5:09 (Back to Top)

OTT is unlikely to go away any time soon. In fact, people have been watching less and less traditional TV in favor of streaming content over the last few years.

5. Why Are Publishers Investing so Much in OTT?

~5:10 – 8:21 (Back to Top)

One of the primary reasons content-driven publishers are getting into the OTT market is to syndicate their content to large OTT platforms for greater exposure. Industry giants like Roku, Chromecast, Hulu, Apple.TV, and others are an excellent way for publishers to get their content in front of new eyes. That is further facilitated by the fact that getting into the market isn’t that challenging for basic integration for publishers.

6. What’s the Most Common Reason Publishers Invest in OTT?

~8:25 – 9:29 (Back to Top)

One of the most appealing aspects of the OTT industry is the monetization you can do there. By investing in OTT advertising, publishers can push various types of ads and achieve high CPM in a market with large viewerships.

7. Which OTT Monetization Model Is Best for Publishers?

~9:31 – 12:47 (Back to Top)

AVOD and SVOD are the two most common OTT monetization models currently, and they each have their place on the market. 

AVOD currently has the highest revenue share of the OTT market of all monetization models. That means publishers are likely going to earn more with it, but its revenue fluctuates from season to season, and it’s worse for user experience overall. However, AVOD has a lower barrier of entry since it’s easier to set up and isn’t as dependant on your audience size as SVOD.

SVOD is excellent for publishers looking for consistent revenue streams and works best for those with exclusive and premium content users would be willing to pay for. However, SVOD is more challenging to set up and might deter many who’d rather watch free content.

Overall, publishers should test both methods and see what works for them since the better choice greatly depends on your audience.

8. What Challenges May Publishers Face When Entering the OTT Market?

~12:49 – 16:30 (Back to Top)

One of the challenges publishers may face when entering the OTT market is that there are two major but separate OTT markets — Android and Apple.TV.

Although Android has a higher share of the OTT market, Apple.TV has dominance in one of the most lucrative markets in the world — the U.S. Getting into the Android market isn’t that challenging since Google is pretty lenient on its review processes, but it’s an entirely different story for Apple.TV.

Publishers will need a team of highly skilled developers to push their product on Apple.TV due to Apple’s closed ecosystem and strict app review processes. On top of that, Apple.TV has a different ecosystem from iOS mobile, but publishers should aim to invest in both.

9. Is It Worth Investing in Both Apple and Android OTT Markets?

~16:31 – 17:27 (Back to Top)

Since most people in the U.S. consume video content on their phones, it’s undoubtedly worth it investing in both if you’re a U.S. publisher or that is your target audience, despite the high investment.

10. Why Is OTT Advertising Appealing for Advertisers?

~17:31 – 18:50 (Back to Top)

One of the greatest appeals of OTT for advertisers is excellent ad viewability, particularly on TVs. Large TV screens and sound blasting from speakers make OTT ads more memorable and impactful, similar to ads played before Cinema projections.

11. Can Publishers of All Sizes Enter the OTT Market?

~18:51 – 22:13 (Back to Top)

Publishers of all sizes can enter the OTT market as long as they have a sufficient budget. Even if you are a small publisher, you should have no trouble getting a few advertising deals (e.g., with SpotX or Google ADX) to start monetizing and building your revenue stream.

However, if you wish to get your content hosted on industry-leading platforms like Netflix, it’s going to be tricky if you’re a small publisher without a large dedicated following. If you’re satisfied with getting your content on a bit smaller platforms like Roku, though, you should have no issues. 

The only real hurdle to entering the market will be whether you have a large enough team to handle your development needs. 

12. How High Are CPMs for OTT?

~22:39 – 22:52 (Back to Top)

CPMs on OTT are always higher than for web and mobile.

13. Is OTT Advertising Going to Become More Popular Than Web Advertising?

~22:53 – 24:21 (Back to Top)

Both OTT and web advertising are on the rise, but which one ends up more popular is going to depend on user preference and the type of content they’re consuming. That means it’s going to differ on a market-to-market basis.

14. Are OTT and Web Advertising Going to Keep Growing?

~24:24 – 27:20 (Back to Top)

Both OTT and web advertising are only going to keep growing because nothing beats video in terms of revenue potential. However, OTT will likely overtake web advertising soon since many publishers will be looking for an alternative to web advertising due to the death of third-party cookies. 

15. Is AdBlocking a Problem in OTT Advertising?

~27:25 – 31:05 (Back to Top)

AdBlockign isn’t a problem in OTT advertising, as there are no AdBlockers capable of blocking OTT ads as of yet.

16. What Are the Limitations of OTT Advertising?

~31:06 – 33:43 (Back to Top)

One of the notable limitations of OTT advertising is that you cannot push VPAID JavaScript creatives with interactive elements to OTT, so you lose out on plenty of creative advertising freedom. However, traditional instream ads are still effective enough to justify getting into the market.

However, one of the biggest problems the OTT industry is currently facing is ad fraud. That is because it’s incredibly easy to imitate a TV, making ad fraud extremely prevalent. Although there are already ad fraud protection solutions out there, they are still in their infancy and aren’t effective enough yet.

17. Is Investing in OTT in Its Current State Worth It for Publishers?

~33:44 – 34:58 (Back to Top)

Despite having issues with ad fraud and supporting only a few limited ad formats, the OTT market is too lucrative to pass on. These issues are bigger problems for advertisers than publishers currently, as it is advertisers’ money that’s going to be wasted with fake impressions. Although that may also reflect on publishers’ bottom line if some advertisers decide to back out of the market, investing in OTT is still well worth it.

18. Outro

~34:59 – 35:24 (Back to Top)