The Rise of Over-the-Top Media (OTT): A Growth Strategy Opportunity
What is (OTT)?
Over the Top Media (OTT) is the streaming of film and TV content with only the need for an internet connection. Some examples of (OTT) powerhouses, of which many are already familiar, are Disney +, Netflix, and Hulu. These services provide content viewed over mobile OTT-enabled devices (smartphones and tablets), personal computers, and smart TVs with enabled internet connection and supported apps or browsers (i.e., Safari, Google Chrome, etc.).
This type of media differs from traditional video streaming such as YouTube by offering an array of premium film and TV content for a monthly cost. YouTube, in comparison, was designed as a social video platform for anyone to share videos freely. Some attempts have been made to enter the (OTT) industry but have yet to rise to the success of Netflix and the other major (OTT) providers due to its reputation as a free content provider. Other similar attempts include the free Facebook Watch, developed by Facebook, another major social network.
According to Cisco, online video will make up more than 82% of all consumer internet traffic (15x higher than 2017) by 2022. People are also dropping cable in favor of streaming at a rapid rate. For advertising and media executives, this means that (OTT) streaming services have grown into a land of opportunity for all types of organizations. Looking to enter this land of opportunity? A strong (OTT) advertising strategy will produce continued organizational growth due to the following:
A Positive Industry Outlook
As an industry, (OTT) continues to grow and dominate traditional TV broadcasts by altering how often content is, viewed. Throughout the COVID-19 pandemic, the spike of binge-watching with many (OTT) providers created a monster of an industry that will continue to flourish as this content remains accessible on mobile devices. No longer are consumers constrained to viewing content from their living room TV or home but can do so on mobile devices at any point in their day as the world begins to open. Many have adopted this and seek to continue using these services as NScreen Media reports that 40% of those surveyed will not cut back on their streaming services post-pandemic.
The increase in time spent with family over the past year caused many to gain a newfound appreciation for this quality time. This increase is proven, with 85% of parents saying they had increased the time spent watching streaming services as a family at the end of 2020. In terms of continuing this trend, 32% claimed time spent watching as a family would continue to increase, 34% claimed it would decrease but remain higher than pre-COVID watch times. With entire households engaged, there also opens the opportunity for these services to spread throughout customer demographics when exposed to different generations.
Chart created by Strategis staff, using data/info pulled from NScreen Media.
Low Advertising Competition Opportunities
With this positive industry outlook, some would assume that competition for advertising on these platforms is too high. However, Jamloop reports that less than 40% of marketers spent anything on (OTT) advertising in 2020, creating an opportunity to get in when competition remains low. About 22% of marketers plan to increase their (OTT) advertising budget, but this amount remains low compared to traditional TV advertising.
The rise in new platforms created by major cable networks, such as CBS with Paramount+ (launched in March 2021) and NBC with Peacock (launched in July 2020), creates opportunities for advertisers to get in on these newer platforms early. These particular services offer ad-supported plans with, Jamloop also reporting that 40% of adults use ad-supported streaming services. With many consumers available to consume ads, and the young age of these platforms, competition can remain lower than that of a service such as Hulu that launched back in 2008.
Specific Targeting Capabilities
As opposed to traditional TV advertising, (OTT) consumers are targeted based on the content they watch. TV advertising uses a spray and prays method during chosen TV broadcast times in hopes that the target audience is watching at that time. With (OTT) advertising, ads are attached to the content and are shown to the consumer anytime they choose to watch. Combining this with other capabilities related to precise targeting, you are more likely to reach your audience.
Another method of precise consumer targeting includes demographic data (age, gender, location, income, etc.) collected by platforms that entail creating subscriber profiles and more. With the shift to consumers, viewing content as individuals in a wide variety of settings (commutes, lunch breaks, etc.), ads reach the right target audience at any time, and more often due to the increased accessibility of content.
To ensure messaging is successful, it is also beneficial to use services that have robust tracking tools, such as Hulu Ad manager. Experts can also assist in optimizing these ads and track overall performance from start to finish. In situations where an ad may not be performing well, it can be pulled and put through A/B testing and shown to target audiences to identify ways to improve. This increase in capabilities in a growing industry when compared to traditional TV advertising will allow marketers to increase their overall return on investment (ROI) and contribute to their growth strategy.
Interested in developing a strong (OTT) media ad strategy? Strategis is a full-service marketing agency developing strategies proven to increase the (ROI) through a wide range of methods. Contact us today!
