How Does Programmatic Ad Buying for OTT/Connected TV Work?

Learn more about programmatic ad buying for OTT/connected TV to see how it could work for your business. This article will walk you through the process of getting your business’s ads on TV streaming services everywhere.

What is OTT/Connected TV?

Consumers have recently been shifting away from traditional cable and satellite broadcasting platforms in favor of internet-based streaming services, like Netflix, Hulu, Amazon Video, and HBO Now. These platforms, among others, make up OTT, which stands for over-the-top, as the name originally came from devices that were placed over the top of the cable box to expand the available TV content.

Instead of cable or other pay-TV platforms, these services rely on an internet connection to stream video content to viewers’ devices. OTT can stream to more than just TV; viewers can also log in on their phones, tablets, laptops, and OTT-specific devices to access media content.

Viewers can also access internet-based content through a connected TV (CTV). A CTV is any television that can connect to and stream media from the internet. Common examples of CTV devices include Smart TV’s, Apple TV’s, Amazon fire sticks, and internet-based gaming systems like Xbox and PlayStation. 

OTT and CTV are quickly becoming popular alternatives to traditional pay-TV platforms and seem to be preparing to dominate access to media content. 61% of Americans already have a Smart TV and 52% stream content using OTT, based on data from the 2019 Consumer OTT Report. According to the report, many young viewers are foregoing traditional cable packages all together. OTT/CTV are already offering advertisers new platforms where they can display their ads.

Programmatic TV Advertising

Programmatic advertising is a new way of advertising that replaces slow, person to person ad sale transactions with an automatic, AI-based system. Your ads can now rapidly respond to real-time market conditions, such as the weather, time of day, or consumer data. Instead of hoping the right people come across your ad, you can specifically target the ideal audience for your ad using the advanced artificial intelligence technology driving the programmatic process.

You can project programmatic ads instantaneously to a variety of ad spaces—including web pages, search engines, and out of the home spaces, like airports, bus stop shelters, and highway billboards. Programmatic ads can now also appear on TV with the recent spike in streaming services.

Video ads are beginning to catch up with the expansion and popularity of CTV and OTT. These devices have already permeated the market, meaning they are a great next target for advertisers seeking to expand their viewership. CTV ad spend was already estimated to have reached about $6.94 billion in 2019 and is estimated to reach about $10.81 billion by 2021. 

The increasing interest in programmatic advertising means that, in 2019, 50.6% of CTV ads were bought programmatically. By 2021, that percentage is estimated to reach 59.4%. Viewing CTV and OTT as the future of video advertising seems to be an important step to give your business the best chance of advertising success.

OTT gives your ads a new advantage that once didn’t exist. Originally, cable TV ads were tied only to traditional TV sets. With advancements in mobile watching, your ad can now travel with viewers as they watch content on their mobile phones and laptops. OTT can even more broadly encompass services like WhatsApp that replace traditional cell phone text messaging plans with internet-based communication, meaning your business’s ads have access to a wide range of viewing platforms.

Since OTT transcends even regular viewing devices to include gaming consoles and other streaming devices, programmatic advertising through these services offers a promising future to advertisers looking to display their ads to a variety of different consumers. Advertisers can also target their ads to particular devices, meaning that ads best suited for smartphones or tablets versus CTV’s or gaming consoles can display on the devices most appropriate for them.

CTV ads tend to be displayed before the start of a show (pre-roll) and several times during the show (mid-roll). Streaming audiences have been very willing to accept ads while streaming their content since the experience so closely mimics conventional TV-watching. Programmatic TV ads tend to be shorter but more meaningfully targeted, increasing the chances of viewer engagement with them.

CTV viewers also represent a more diverse audience. Many web pages are frequented only by younger, digital natives, but TV is a much more universal means of accessing content. This is good news for your business; OTT is a rapidly growing industry with millions of viewers ready to see ads that you can directly target to them.

CTV viewers are also more likely to engage with the ads they see since they cannot close out of them or install adblockers to prevent the ads from displaying. Not only will your ad target the viewers best suited to it, but viewers are more likely to interact with CTV ads than ads on other platforms where viewers can more easily close them down.

Programmatic Ad Buying

Programmatic TV ads allow you to more precisely reach your target audience. They display based on individual viewers’ data. As most OTT streaming sites collect a variety of consumer data automatically through subscription and user profile creation, advertisers can strategically position their ads where they have the highest chance of success. Information about viewers’ demographics, geographical area, interests, and watching history will inform the ad selection process, ensuring that the displayed ad is the one most likely to engage that particular viewer.

Since you will have already pre-programmed your ideal target audience and your advertising budget, the AI-based platform can spontaneously hold an auction among all the potential advertisers to find the highest bidder with a target audience that most closely matches the audience of a particular ad space. The entire auction process is automated and occurs in milliseconds to ensure the best ad displays as soon as the page loads. This process of dynamic ad insertion always keeps the most relevant ads displaying, as opposed to the traditional, shot in the dark method of advertising.

Your business’s ads are more likely to be successful when they’re reaching the people most likely to engage with them. Programmatic ads give you the power to precisely narrow your ad’s audience and respond dynamically to real-time data about them. 

Since the whole transaction is automated, your business is relieved from the constant work of maintaining partnerships with publishers and negotiating the arrangement. Instead, artificial intelligence processes relevant consumer data in milliseconds to execute the best ad sale, making it not only more efficient for you and your business but also more effective.

For programmatic TV ads to display during regular content, the streaming site must communicate with the internet-connected device a viewer is using. This communication usually occurs through a Video Ad Serving Template (VAST) or a Video Player-Ad Interface Definition (VPAID). Advertising platforms like these streamline the dynamic ad insertion process, allowing streamed content to transition seamlessly into video ads without a lag that was once caused by incompatible systems. VPAID also allows video ads to be interactive, permitting viewers to click and learn more about your business when your ad displays.

After programmatic ads display to OTT viewers, a detailed report is issued back to advertisers to let them know how successful their ads were based on the sophisticated data-processing technology that powers the transaction. A variety of metrics keep track of viewer engagement since the ads are digitally programmed. 

You can review the statistics relevant to your ad to determine if it is reaching the right target audience and how many viewers are engaging with it. With this data, you can make more informed decisions regarding future ad optimization and target audiences to ensure your ad is doing the best job it can.

Programmatic TV advertising offers another important advantage to advertisers: video completion rates. Unlike click-through-rates which have begun to decline as a result of adblockers and viewer fatigue, the rate of viewers completely watching a video ad is rising each year on CTV. During 2018, video ads had a completion rate of about 95%, higher than that of any other viewing device. 

CTV/OTT advertising offers advertisers some unique benefits compared to other platforms, while still harnessing the power of data driven programmatic advertising.

Professional Programmatic TV Services

Digital marketing experts can help you bring your business’s ads to CTV with their programmatic advertising services or can even help you craft the perfect video ad to your business with their professional videography services. Since your ads will project to multiple different platforms instantaneously, you’ll want to design enticing, eye-catching video ads that will grab viewers’ attention.

Programmatically purchased display advertising is another important method to ensure you are targeting precise audiences for your business on websites and search engine pages. Professional digital marketers can make sure you are buying the best ad space for your business and that your ads are showcased on the most relevant platforms.

As the future of advertising continues to evolve and move toward programmatic buying, consider showcasing your business on OTT/CTV to get your ads in front of the most engaged potential customers. TV may be changing, but your business can change with it!