Multiple Advertising Models
The options are almost limitless when it comes to your advertising model, whether you’re going fully ad-supported or for a hybrid model.
Fully ad-supported models, such as advertising video-on-demand (AVOD), have virtually zero barriers to entry for your viewers. With no options to subscribe, this is a plug-and-play solution to your OTT revolution. Make your service free, no login or registration is required.
Freemium services are a slightly more recent concept. Provide viewers with the option to access content by creating a free account but it will be ad-supported. This model can be the most lucrative as content can be free to watch, however, the viewer will be served ads while they watch. You can then upsell users by offering to remove the ads if they purchase a subscription. Utilise AVOD to upsell your users to SVOD, and even if they choose not to, you’re still generating ad revenue.
Ad-only content can consist of a selection of content items where ads must be viewed to access it, giving the option of providing premium content at the cost of watching a few ads to the viewer. This is a hybrid of SVOD and AVOD, but ads are only presented on selected content.
Different Types of Video Ad-Placement
Serve ads to your audience according to your users’ behaviour and engagement patterns. Choose from several different options.
Pre-roll ads are placed before the video starts and don't require advert markers to be triggered.
Mid-roll ads are placed in the middle of your content and require ad markers in order to be triggered. They generally play out at strategic points throughout the content to keep the viewer engaged: Content > Mid-roll > Content > Mid-roll. For live streams, the markers will match commercial/broadcast advert breaks and will be SCTE-35 based (adverts are inserted OVER content). For VOD, markers create new breakpoints in the content and adverts are inserted into those breakpoints.
Ad pods (Podding) can be used for both pre and mid-rolls simply meaning that there is >1 ad i.e. multiple ads that are placed together and then played back-to-back in a single ad break. Much like in linear TV ad breaks, ad pods make it possible for you to serve multiple ads in a single time slot. A non-podded advert is always 1 ad (of any duration). A podded advert can be a series of ads (usually 3-5 back-to-back). Pods are excellent at driving new revenue. Start with 1 ad per request, grow to 2,3 or 4 and use analytics to test end-user tolerance!
SSAI vs CSAI
When choosing your delivery method for your advertisements, you have two options: Server-Side Ad Insertion (SSAI) or Client-Side Ad Insertion (CSAI). Each has its own benefits and suitability depending on the application and method utilised.
This refers to how adverts are going to be delivered on your apps or websites.
SSAI: ads are stitched directly into the stream, and they play out almost exactly like traditional broadcast channel ad breaks. It’s seamless, as the viewer isn’t waiting for the ad to load. The viewer’s content doesn’t pause, it’s a continuous viewing experience with no pauses or breaks between content and ads. This is faster to implement for multiple platforms and results in higher ad completion rates at volume as the experience is more seamless than CSAI.
- Well-suited for linear and live streams, or VOD
- Instant deployment across multiple platforms – SSAI requires no in-app code. It’s deployed once on the backend and can be instantly applied to an unlimited number of applications
- Ideal for FAST channels
- Can’t be ad-blocked - ads are seamlessly stitched into content
- Supports insertion of ads over a linear slate, so no black screens for live content
- No SDKs required – totally codeless integration, no regular code updates required
- Rich tracking and metrics for ad performance reporting (ad server dependent)
- Programmatic ad requests, including targeting and consent data are captured as normal
- Adverts are transcoded on the fly into multiple renditions, to match the bitrates of the content
- Higher ad fill rate generating more impressions – the average completion rate for SSAI ads on live is 98% – based on a real customer sample (June 2022)
CSAI: the ads and content are not stitched together. From the viewer’s perspective, the player will switch between the content and ads, and this change will be noticeable as the content being viewed will pause before the ads begin playing. The ads are being inserted by code on the device itself, resulting in a slightly less subtle transition from content to ads, with some latency.
- Can support skippable, clickable and closable ads
- Rich tracking and metrics for ad performance reporting
- Can be deployed without ad markers for pre-roll (mid-rolls still need markers)
The Ad Servers That Serve You
To get ads into your content you need an ad server. Integrations with ad servers are the key to generating revenue through ad ‘impressions’.
Ad servers are a tool used to manage and serve online advertising content to users that use your OTT service. Ad requests are sent from the viewers device to the ad server and this will return a single ad or pod of ads to fill the duration of the relevant ad time slot.
The ad server ingests all available information about an ad request and is where targeting, filtering, exclusions and frequency capping rules are applied.
Ad impressions are measured by the thousand to provide a cost per mille (CPM). The ad CPM is the revenue you get for every thousand ad impressions. This can also be referred to as RPM (Revenue Per Mille).
Simplestream has existing ad server integrations with Google Ad Manager, SpringServe, FreeWheel, and SuperAwesome.
Please note - you need a commercial agreement with the ad server directly.
How to Project your Ad Revenue
It’s important to get an idea of how much your potential ROI is for utilising ads in your content. The easiest way to do this is to take any existing usage data you have from your service to calculate the number of ad impressions you can expect to generate monthly.
See the following example to calculate your potential return ad revenue:
100,000 plays per month (average)
22 minutes playtime per unique user (average)
Within 22 minutes of average playtime, each of your viewers could be served with a pre-roll and mid-roll ad pod. In this example, your pre-roll ad pod could have a duration of 60s within which you could serve two 30 second ads. Your mid-roll, instead, could have a duration of 120s within which you may serve a maximum of four 30 second ads. If we assume 3x mid-roll ad pods per hour – this means an average of 1 mid-roll ad pod in a 22 minute period.
As a result, you may serve each of these viewers a total of 6 ads during their average viewing session of 22 minutes. To calculate the projection of your average monthly ad impressions, multiply those 6 ads by your average monthly plays.
100,000 x 2 = 200,000 preroll ad impressions
100,000 x 4 = 400,000 midroll ad impressions
600,000 total impressions per month
You then take your monthly ad impressions, divide this by 1000 and multiply by your CPM to get your average monthly return. In this example, the average CPM of the ads served to viewers is £10.
(600,000/1000) x 10 = £6,000
You would have an average monthly return of £6,000 in ad revenue*.
*Actual numbers may differ, as in practice, ad durations come in all shapes and sizes, not just 30 seconds.
Divide ad impressions by ad requests and multiply by 100 to give you the fill rate. Example:
320,000 ad impressions (ads served)
700,000 ad requests (maximum number of ads which could have been served)
320,000 / 700,000 x 100 = 46% ad fill rate
Monetise with Ads
To monetise your OTT service with ads, you serve ads and get a CPM from the providers of the mentioned adverts. Each ad server has ad providers linked to them which pay the CPM to you based on the number of impressions you generate for them. Ensuring you have a high fill rate for your ad pods is key to generating impressions and in turn, more revenue.
Targeting and Exclusions
Control what is advertised on your service with exclusions to ensure that ads are appropriate for your audience, and always on-brand. Avoid the situation where a competitor's service advertises to your viewers while they’re consuming your content.
Target down to IP to deliver relevant and thematic ads to individual households.
Data privacy is of the utmost importance when it comes to your advertising, as you need to ensure that your users are in agreement with targeting based on data gathered from their device or viewing habits.
A consent management platform (CMP) is your key to compliance with GDPR, ePrivacy, and CCPA regulations. This can be provided through in-app integration with the UI that makes it clear to your viewers when they provide or decline consent to data collection.