Currently in the United States, Over-the-Top (OTT) viewing occurs on more than 2.4 billion devices and Connected TV (CTV) viewing, 168.1 million.¹ OTT in particular, is anticipated to see the largest increase in video ad spend within the next five years, making it a prime target for invalid traffic. In fact, already 1 out of 5 programmaticly sold CTV or OTT video ads are measured invalid.
What Is OTT? (Over-the-Top)
OTT accesses content ‘over the top’ of an infrastructure provider. With OTT, you consume film or TV content via the internet, not through a traditional cable or satellite TV service (e.g. Comcast or DirecTV).
For example, let’s say you buy bandwidth from Verizon’s internet service but subscribe to Netflix. Here, you’re viewing your content within the Netflix application, not on the internet.
Three Revenue Models of OTT
1. Subscription Video on Demand (SVOD)
Subscription-based services like Netflix, Hulu, and Amazon.
2. Ad-Based Video on Demand (AVOD)
Free and ad-supported services like Crackle fall under AVOD.
3. Transactional Video on Demand (TVOD)
Transactional services like Amazon Instant Video or iTunes, which allow users to pay for individual pieces of content.
The most recognizable is SVOD. After all, who doesn’t have a Netflix or Hulu account these days. So, what makes using a Netflix account via OTT different from a CTV?
What is CTV? (Connected TV)
At first glance, OTT and CTV seem like they’re one in the same, but they’re not. OTT is how the ad was delivered while CTV is the device on which the ad was viewed.
CTV requires a smart device to access content. This device can be a smart TV or streaming device like Amazon Fire TV Stick, Roku, or Apple TV.
By using your smart TV or a streaming device, you consume IP delivered content through an app. Think of it this way:
- OTT: You turn on your laptop, log into your Netflix account, and watch the latest episode of Riverdale.
- CTV: You turn on your TV, plug in your Amazon Fire TV Stick, open Netflix, and watch the latest episode of Riverdale.
Although OTT and CTV are different, they’re both targets for ad fraud.
Both OTT and CTV Are Vulnerable to Ad Fraud
For consumers looking to cut the cable cord, OTT and CTV are appealing alternatives. As more viewers move away from traditional television, digital advertisers are pivoting. But as advertisers make their move, fraudsters are following suit. After all, fraudsters go where the money is. According to Forrester, video ad fraud accounts for 64% of all ad fraud.²
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For OTT, fraudulent traffic is an issue. A video publisher who buys third-party traffic makes it difficult for the OTT platform that hosts the app to detect where the video ad or page load request comes from. This makes it easy for fraudsters to take advantage and not get caught.
While programmatic advertising isn’t big in CTV yet, that doesn’t mean CTV is immune to fraudsters. Many CTV ads use server-side stitching (e.g. ad insertion). The ad insertion makes it difficult to trace back a URL’s location and the original traffic source, enabling fraudsters to claim impressions.
CTV also is vulnerable to device spoofing. For example, fraudsters mask the device, making it look like it’s a Samsung smart TV when really it’s an Android smartphone. This enables fraudsters to get traffic sent to their targeted device.
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How an Ad Fraud Solution Can Help
An ad fraud solution that analyzes traffic to identify real users will help publishers and advertisers to mitigate video ad fraud. Lots of impressions mean nothing if real users aren’t the ones viewing the ads. Remember, true performance is based on real users. If OTT and CTV want to stay one step ahead of ad fraud, they need to implement an ad fraud solution now.