Contextual targeting in OTT (over-the-top video) sits at the juncture of two major digital industry trends: the rapid growth of digital video consumption since the beginning of 2020, and the search for strategies to deploy and scale ad campaigns without relying on third-party cookies.
That statement alone assumes a whole lot of background knowledge -- at least a few years’ worth of industry trends. Let’s back up and explain how we got here, and what we mean when we talk about contextual in OTT.
What’s the Difference Between OTT and CTV?
Over-the-top video (OTT) and connected TV (CTV) are often referred to interchangeably -- which can be confusing, because they’re not the same thing. OTT refers to the video content -- video streaming through apps. CTV refers to the hardware -- an internet-connected device for streaming and viewing video on a TV-like screen. When we talk about OTT, we’re talking about services like Netflix, Amazon Prime Video, Hulu, or Disney +, to name just a few. When we talk about CTV, we’re talking about devices like Smart TVs, Chromecast, Apple TV, Roku, or various game consoles that can stream video (e.g. a Playstation or Xbox). You can stream OTT video via CTV -- but you can also stream OTT via mobile or desktop, which are not CTV devices.
What’s Changing in OTT?
The cord-cutting trend is a familiar one -- viewers have gradually been ditching linear TV subscriptions in lieu of OTT services for years. But the stay-at-home mandates during the Covid pandemic accelerated that trend, as viewers had more time to spend watching video content and were looking for ways to save money. Over the course of 2020, the amount of time viewers spent watching streaming video increased by 44%. Viewers are spending even more time streaming video in 2021 than in 2020, while their time spent watching linear TV will be down 7% YOY. Cord-cutters typically don’t end up re-tying those cords in the future.
This makes OTT a hot commodity, and as such, 73% of ad buyers who bought CTV inventory this year say they’ve shifted some of that spend from linear to CTV. Digital video (which includes OTT content) will account for 56% of all video ad spend in 2021.
How Does Contextual Targeting Work in OTT?
Contextual targeting differs from audience targeting, in that audience targeting relies on data indicating a user’s interests, behavior, and demographics; while contextual analyzes the content itself to align ad campaigns with relevant environments. With text, this is pretty straightforward: An algorithm scans pages for keywords relevant to the campaign. More advanced contextual solutions can analyze text for sentiment and tone -- not just what the language means, but what meaning it would convey to a human user.
Video requires a different technological approach. The amount of text available to analyze algorithmically is quite limited. There’s some text to be found -- metadata and closed captions, for example. But to do contextual in video, the algorithm needs to recognize shapes and patterns. This is extremely important for ensuring brand safety. An advertiser might want to avoid buying around a scene with nudity or violence. A soda brand might want to avoid a scene where characters are discussing quitting their soda habits. A travel brand might want to be aligned with a sunny beach scene -- in which case the algorithm would need to recognize a sunny beach.