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OTT/Video Pre-Roll …What’s the Difference?

Video ads keep getting more popular as advertisers and brands continue to see the value. Eighty-five percent of brands used video marketing in 2020, which is up from 63 percent in 2017. According to the Interactive Advertising Bureau, nearly three in four buyers are planning to increase their digital video ad spend in the next 12 months, and nearly two-thirds of digital budgets are allocated to video. What does this mean? Video is continuing to explode. 

Video ad spending and performance are on the rise, and video ads are more captivating than text. 

  • 80 percent of viewers can recall a video they’ve seen in the past 30 days. This is the highest of any type of digital advertising. 
  • 95 percent of viewers are more likely to remember a call-to-action after watching a video, compared to 10 percent who can remember a call-to-action when reading it in text. 
  • Even if someone only watches your video ad for a few seconds, there is a lift in ad recall, brand awareness and purchase intent

We are also using video to determine what to purchase. Eighty-five percent of millennials say they’ve purchased after viewing a marketing video. 

The need to have video advertising in your marketing mix is clear. The only question that remains is what type of video advertising should you spend your advertising dollars on? 

There are numerous factors to take into consideration when outlining your video digital marketing strategy.  

  • What is your budget?  
  • Do you have enough funds to produce a high-quality video or is it going to be something filmed on your phone?  
  • What is the length of your video?  
  • What is the call to action and who specifically are you trying to target?  
  • What are your goals and what are you wanting to achieve? 

Video advertising through social media platforms 

It may seem overwhelming, but once you define your goals, your budget, your target audience and your content, determining the best platform becomes much easier. 

There are obvious options to consider, such as Facebook and Instagram. On this platform, you can have a longer length video (up to 240 minutes), and targeting options are plentiful. 

YouTube is fairly straightforward as well. You have some flexibility on length, although :15 or :30’s are recommended, and you have targeting options. The drawback I see is that when you are advertising on YouTube, you are ONLY on YouTube and you are missing other inventory options. 

Where video advertising starts to get a little trickier is when you are deciding between Over The Top (OTT) and Video Pre-Roll. The lengths are similar (exactly :15 or :30 seconds), but that is where the similarities end. Let’s unpack these options and start by defining them. 

Video Pre-Roll Advertising 

What is Video Pre-Roll Advertising? Well, it is an ad that plays before the content the end-user has selected to watch. For example, I missed a funny clip from late-night TV because I have an infant so I went to bed early. I go online in the morning, Google the clip I want to see, and I watch a short video targeted to me first. I did this just now, I selected to watch a clip from SNL on Today.com and before it played, I watched a delightful ad from Old Navy which inspired me to freshen up my spring wardrobe. This is an example of Pre-Roll Advertising. 

Over The Top Advertising 

So then what is OTT? OTT is different, OTT stands for “Over The Top” and it is video programming that is transmitted via the internet, not on traditional cable or broadcast TV shows. Ads appear within programming watched on any type of internet-connected device. For example, I’m watching a movie on my TV through my Roku, and I am served an ad targeted specifically to me. The most recent ad I was served inspired me to get on my tax return. Relevant, for sure. 

Connected TV 

Let’s also take a minute and define Connected TV (CTV), as it is a type of Over The Top (OTT) inventory served ONLY on internet-connected TVs, not on other types of devices. CTV is extremely desirable for advertisers because it’s the most used device to stream programming. I’m a thousand percent more likely to watch a show on my TV than I am on any other device. It’s not just me, check out this chart, I am not alone! This captures ages 18-66. I do see kids watching shows on their phones or laptops at times, but they are not the norm. They also have approximately zero dollars to spend, so they are also not the most desirable target audience! 

Addressable TV 

We should also take a beat and define Addressable TV. What is Addressable TV Advertising and how does it differ from OTT Advertising? The biggest differentiator here is that OTT ads do not require a cable connection. Addressable TV content and ads are delivered by Multichannel Video Programming Distributors (MVPDs) such as Comcast and AT&T, DIRECTV, pay TV, cable TV, satellite TV, and on-demand subscribers. Remember, OTT, or Over-The-Top refers to the delivery of video content and ads via the internet. With OTT, content bypasses a traditional broadcast signal or cable set-top box. OTT content can be accessed without the involvement of a television service provider via any device or app that is used to stream content to a TV, or any internet-connected device. 

Why is this important to consider? Because OTT advertising reaches cord-cutters – while Addressable TV does not. eMarketer estimates that by 2021, over 81 million U.S. consumers will have either cut their cords or never signed up for one in the first place. That number is up 64 percent from 2018. 

The targeting abilities of OTT ads differ from Addressable TV ads as well. OTT content and ads are delivered over the internet to connected TVs and devices with persistent IP addresses, so advertisers can target and serve ads to specific people showing specific behaviors, just as is done with other digital video ad products. Addressable TV can only leverage subscriber registration data and set-top-box technologies to apply audience segments which are not as specific. Addressable TV is heavily marketed as household-specific (the same set of four houses could be watching identical programming but they get different ads during commercial breaks based on their address) and demographic. OTT targets IP addresses based on their behaviors. So, if you have a very broad audience you want to reach, Addressable TV may be fine for your advertising needs, but if you want to get to a very specific type of person who is showing behaviors related to your business, you should consider OTT advertising. 

Now that we have all those definitions out of the way, let’s circle back to OTT vs. Video Pre-Roll and two of the biggest items to consider: Are clicks important to you? Unlike Video Pre-Roll, OTT is not yet a clickable environment. While I did click on the Old Navy ad I was served on my laptop when I went to watch the video clip, I did not click on the tax ad, nor did I have the option to, I was watching on my TV with no clicking capability. 

Who is your target audience? While both formats offer multiple levels of targeting abilities, Video Pre-Roll targeting technology is far more developed than OTT targeting. It has been around longer and is much more in-depth. OTT ads are often targeted a little broader. Take the tax ad for example, do I need to do my taxes, yes. So, I am in the market and the correct target. However, the tax ad shown to me on OTT didn’t have the same level of specificity as the “here is a dress and sweater combo we know you will love” Pre-Roll ad. 

If you are currently running ads on TV, adding OTT can help your current marketing Campaign. OTT extends the reach of a business that is currently doing traditional or broadcast TV advertising since they are reaching that audience that has cut the cord to cable (cord-cutters), or those that have never had cable (cord-nevers) allowing you to reach a more targeted audience with OTT. 

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