OTT versus traditional TV advertising
                     OTT versus traditional TV advertising
Watson F
Writes on ad managing using AdSpeed ad server, involved 
with Adspeed Ad serving solution.
Television advertising has been around for many years. It has been and still is 
a very common medium for advertisers to allocate their ad budget. However, 
it has been changing dramatically for the past few years with a significant 
shift from traditional cable TVs to over-the-top (OTT) devices like smart TVs, 
phones, tablets, and many streaming sticks (Roku, Amazon Fire, Google 
Chromecast, AppleTV) that are Internet-connected and can download videos 
from content delivery networks (CDN) and ads from online adservers. The 
rise of online video consumption creates a huge inventory for video 
advertising. It’s useful to understand the history and the differences with 
OTT advertising so you can make smart decisions on media buying or selling.
Traditional TV advertising
When video advertising was initially launched on traditional TVs, it was 
just a way to fill the empty air time between programs and earn some 
additional revenue. The relationship was often directly between the 
advertiser and the TV station. As TV watching got more popular, TV ads 
became a more important source of revenue for the stations.
However, targeting options were still very limited and basic. Targeting at the 
individual level was unheard of. Many, if not all, viewers often watched the 
same ads on TV regardless of their preferences or interests. The viewers 
must turn on their TVs to a specified channel at specific time to watch 
content and the accompanied commercials. The advertisers could choose the 
station, program and time based on ratings and audience data provided by a 
few big research firms. This selection process had some correlations to the 
target audience. However, it was not precise or directly measurable. There 
were a lot of estimates, projections and hopes on return-on-investment 
(ROI). The goal was simply to reach the masses, basically whoever had their 
TV on. The location and engagement activities of viewers were not clearly 
known or reported. These limitations gave digital OTT advertising many 
advantages.
OTT Advertising
Traditional TV advertising was able to reach many eyeballs but the shift 
to a more customized and targeted marketing approach became more 
and more popular as more devices are connected to the Internet and 
get all their data from the cloud. Therefore, these devices are cheaper 
to make, more affordable to consumers and also more popular for the 
very same reason. Viewers use a variety of devices to watch their video 
content on demand, basically anywhere and anytime. This big change in 
media consuming’s behavior requires an entirely new ad serving 
solution.
Digital ad serving is much more efficient and measurable. Modern advertisers appreciate OTT 
advertising because it opens up advertising to all businesses, small and large, regardless of 
their size. It is cheap and can scale up indefinitely. It is highly effective because it offers better 
value and reach. There are many more targeting options with more data points available than 
ever before. Ads can be shown to individual viewers depending on the many and specific 
targeting criteria and restrictions. Every ad view, or ad impression, involves many advanced 
algorithms that select the most suitable ad. The process sounds complicated but thanks to ad 
technology, each ad selection can be completed in milliseconds and it can scale up to many 
thousands of ad servings per second. The limitations are often not technical or data limitations 
but with ethical and regulation concerns. Advertisers have to walk a fine line between being 
relevant and being creepy. Privacy is an on-going issue that needs to be considered and 
addressed in order to maintain a healthy ecosystem for online advertising.
Instead of paying for projections, advertisers pay for individual ad views, often 
calculated using CPM rates. CPM is the advertising cost per one thousand 
impressions. With access to real-time reports of many ad metrics, advertisers can 
make adjustments and optimize their ad campaigns as frequently as they want. 
Viewership location is one of the available ad reports and can be used to understand 
patterns and trends in ad optimization. Viewers of streaming OTT content and ads 
are already on smart devices with interactive features so they can bring a higher level 
of engagement than traditional TV ads. They can respond immediately to the 
advertisement by clicking on it and proceeding with the offer. There is often no need 
for viewers to transfer or switch to another device, which is not only inconvenient 
but also makes lead attribution and conversion reporting less accurate.
About Adspeed
AdSpeed ad server is a reliable & powerful ad serving and ad 
management solution that serves your ads, tracks impressions & clicks 
and reports ad statistics in real-time. Driven by the latest ad serving 
technologies, the goal of Adspeed adserver is to provide a reliable 
platform that can help in executing online advertising strategy more 
efficiently. 
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