What if I told you that you could have a captive, television audience for your product or service, but that you could do it in a highly targeted, programmatic way with very little wasted adspend? That’s the future that is promised to us by OTT.
OTT (which stands for ‘over the top’), is a term for streamed TV. It encompasses all Internet-delivered media content. It encompasses subscription-based streaming services that allow users to access on-demand content without relying on satellite/cable providers. Consumers can watch OTT on a variety of devices such as mobiles, gaming consoles, and tablets, but the largest viewing audience is on Connected TVs.
Cancelling traditional TV subscriptions (cord-cutting) has led to a rise in consumers streaming video through connected TVs. With over 31.2 million households expected to cut the cord by 2020, this number is estimated to rise to 46.6 million by 2024. Brands have a huge opportunity to utilize streaming TV advertising in their media strategies.
It’s obvious to anyone who’s paying attention that this is going to be how television media is consumed in the future. The trends are undenyable. As boomers begin to, uhm, leave us… this trend will only intesify.
This represents a significant opportunity to advertisers who are paying attention. Subscription OTT video is chasing linear TV in terms of time spent in the US. We estimate adults still spend significantly more time per day watching TV, but that figure is decreasing and will fall below 3 hours this year. Meanwhile, for subscription OTT video, time spent will surpass an hour and a half per day. But ad spend on these platforms is not proportional to time spent.
Why is spending on subscription OTT ads lagging? Despite a growing number of viewers for streaming, the necessary ad infrastructure has yet to catch up. You’ve probably heard how bad the ads UX is on some of these platforms, but I think back to the early days of facebook ads and just laugh. I’ve seen this before. However, this is likely to change as ad-supported streaming becomes more widespread. The competition for ad dollars among streaming companies is expected to intensify, with ad funds that were once tied to platforms like Hulu, Roku, and YouTube flowing towards other streamers.
Whomever decides to become an expert at this medium now is likely going to win major market share in the years to come. Something to think about.
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