OTT Advertising: Why The Industry Needs More Transparency

Samantha Stockman headshot

On TV And Video” is a column exploring opportunities and challenges in advanced TV and video.

Today’s column is written by Samantha Stockman, group director at The Media Kitchen.

The over-the-top (OTT) landscape is rapidly changing, ushering in a slew of new subscription and ad-supported video-on-demand services – and an abundance of advertising opportunities. There are several new products in the works: Disney+ launches in November, NBCU is launching Peacock and AT&T’s Time Warner is launching HBO Max.

These whirlwind changes invite questions about how to best understand, navigate, buy and ultimately measure the value of OTT as a channel. One thing’s for sure: OTT is blowing up legacy media frameworks. Advertisers need to figure out how, where and why OTT fits in.

That’s easier said than done. With a growing number of streaming services delivering new content every day, OTT accounts for nearly 30% of TV viewing – but ad spend lags behind at a disproportionate 3%. There are a couple of factors at play here.

The landscape is extremely fragmented

With more than 200 paid subscription and ad-supported streaming services available, consumers have the freedom to choose one – or several – that fit their needs. As a result, streaming companies are competing for consumer share of time and share of wallet.

For example, there are four ways to watch NBC’s “This is Us”: live on NBC; through a virtual MVPD such as Sling; delayed via on demand, NBC app or Hulu; live or on demand via a smart TV or connected device such as Roku or Amazon Fire TV Stick.

That means advertisers can buy inventory to reach consumers watching the same content in several different ways through several different companies.

This is a difficult problem to fix. Some OTT providers sell advertising directly, others work with aggregators, and many sell both ways. If advertisers want more control over where their ads will run, they can, for example, buy directly with Hulu and NBC, with little ability to control unique reach and frequency across their entire plan.

Alternatively, advertisers can buy programmatically and aggregate a bunch of OTT partners to better control reach and frequency, but have less granular control over where their ads run.

Lack of reporting transparency

The plethora of ways to access the same inventory exacerbates the lack of reporting transparency. TVs don’t use cookies, so you can’t track across providers, and many video streaming platforms are walled gardens, preventing a holistic view of performance.

While OTT is a great way to get into the living room in a more audience-targeted way, there is no universal way to measure across partners. Often, reporting is quite limited.

Some OTT providers will report that an ad ran in the comedy genre, for example, instead of providing channel-level information. Even in cases where you can get information about channels, many OTT companies are still unable to say, for example, “Twenty-five percent of your ad impressions ran on ‘This is Us,’ ‘The Handmaid’s Tale,’ and ‘Grey’s Anatomy,’” (unless it’s a sponsorship) as companies reporting on traditional TV ad buys do. And forget about understanding which episode of a given show an ad ran on.

On the sell side, the ever-shifting field is a barrier to fixing this problem. With mergers and product launches, the avenues for ad buying and the development of potential mechanisms for better tracking are in flux and likely to remain so for the foreseeable future.

Finding a solution

We need to standardize how we buy and measure OTT industrywide. That starts with transparency.

For advertisers to increase their OTT budgets, providers must deliver on the promise of hypertargeting with scale. OTT is touted as the “new TV,” yet the language of traditional TV advertising, such as universal reach and frequency, hasn’t fully carried over to digital. Advertisers often want to know these metrics when they buy OTT, but closed systems block vital information.

Furthermore, OTT providers need to deliver more granular insights into where ads are deployed – beyond offering white lists or block lists – to better inform campaign optimizations and, ultimately, provide insight into what performed well.

The ongoing transformation of the OTT landscape is all the more reason for OTT providers to simplify inventory availability and institute better, cross-platform tracking to give advertisers a holistic view of their buys. If they don’t, they are missing the opportunity to close the gap between viewership and ad spend – to the detriment of advertisers and OTT providers alike.

Follow The Media Kitchen (@themediakitchen) and AdExchanger (@adexchanger) on Twitter.

Enjoying this content?

Sign up to be an AdExchanger Member today and get unlimited access to articles like this, plus proprietary data and research, conference discounts, on-demand access to event content, and more!

Join Today!


  1. You stated the problem right up front. “Lagging at 3%…” with only 3% of providers revenue coming from OTT ads, it makes it nearly impossible to justify investment in better reporting and data infrastructure. Advertisers can’t have it both ways.

  2. Gary Milner

    This is like mobile, investment lagged where the audience was. This catches up eventually as it did with mobile. The smart ones wont be just thinking scale as they test it. Scale will come.