Here is the outline we will be covering in this blog:
Photo by Compare Fibre on Unsplash
LET’S GET DRAMATIC
Streaming platforms are all the rage nowadays, with Netflix, Amazon Prime, Disney+, Apple TV, etc. all fighting for people’s attention. What do they have in common? These channels are all OTT (Over The Top), meaning video content delivered over the internet, versus traditional satellite or cable TV.
An important term associated with OTT is Connected TV (CTV).
Connected TV stands for the device one uses to watch OTT video. Note, it is closely related but not the same.
OTT is the actual delivery method, which is bypassing satellite and cable TV, hence, going over “the top”.
OTT ads are served through video format on:
- Smart TV apps (like Netflix, HBO Go)
- Streaming boxes (Apple TV etc.)
- HDMI sticks (Amazon Firestick, Roku, Chromecast)
Amazon’s Fire TV has 50 million active accounts and Roku has 46 million.
HERE COMES THE BOOM
The COVID-19 pandemic in 2020 sped things up for the popularity of OTT channels. People are spending more time at home, and all streaming channels have seen a jump in subscriptions. Many are switching from cable television to only streaming (cutting the “cord” if you will).
Emarketer predicts that the number of US households that subscribe to traditional television will drop from 86.5 million to 72.7 million between 2019 and 2023.
As mentioned earlier, OTT is streamed through Connected TV (CTV).
The Drum identified that Connected TV had grown 35% year over year in 2020.
Here are some statistics to showcase how popular streaming channels are:
- 61% of US households subscribe to 2+ OTT channels
- 45% subscribe to 3+ OTT channels
- 31% subscribe to 4 or more
Here are the most prominent video streaming players:
- Netflix
- Disney+
- Amazon Prime Video
- Apple TV+
To give you a sense of how big the userbases are, as of December 2020:
Netflix has around 200 million subscribers and Disney+ has 86 million worldwide.
It’s the hottest thing, and everyone wants a piece. Players that recently entered the arena include:
- Hulu
- HBO Max (HBO)
- Peacock (NBC)
- Discovery+
- AMC+ (AMC)
- Shutter
- Crunchyroll and more
This competitive group is often dubbed as “The Streaming Wars”. Here is a 2019 CNBC feature and a quick look at their analysis in 2021:
However, 57% of Netflix users said they would cancel their subscriptions if Netflix brought in advertisements.
How do brands manage to reach people in their households in this new era of media consumption?
Photo by Glenn Carstens-Peters on Unsplash
AN EMERGING ADVERTISING TREND
OTT advertising is delivered through Connected TV’s online video streams, powered by programmatic technology. Ad formats may include:
- Banner ads
- Sponsored content
- In-stream video ads
WHY YOU SHOULD GET WITH IT
For every marketer, Return on Ad Spend (ROAS) is an important metric to measure. Because OTT is internet-based, it has detailed data analytics of ad performance, which allows brands to attribute that to conversions (website visit, sale etc.). Insights gained from finding out which ads were effective and which weren’t are useful for optimizing future ads!
OTT is booming and only going to continue to grow.
As a programmatic advertising agency specializing in hyper-targeting audiences for our clients, we cannot stress enough how much potential OTT advertising can have.
We think it is an excellent channel for brands to consider branching out to. It can amplify your ads on other ad channels such as Display and Social campaigns.
Connected TV (CTV) stands for the device OTT is delivered through, which might be HDMI sticks, streaming boxes, or Smart TVs.
Millions of households subscribe to 2 or more streaming channels. Many are even saying goodbye to cable TV and going streaming only. COVID-19 has sped up this process, and OTT is continuously gaining momentum.
OTT Advertising has many benefits as it is internet-based, which offers flexibility over traditional TV advertising. These benefits may include:
- Ads can’t be skipped, which guarantees eyes on ads
- Bypassing the complex process of buying TV spots on cable networks
- Hyper-targeting audience segments
- Retargeting capabilities to close the cross-channel loop and capture conversions
- Proper ad attribution and ROAS calculation
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