As the media landscape becomes more diversified and people are cutting the cord, over-the-top (OTT) services are on the rise.
Currently 64% of households own a Connected TV (CTV) device and 22 million adults have canceled their cable and satellite TV.
What does this mean for traditional broadcast advertisers? They now have another avenue to target potential consumers through OTT.
First, let’s dive into what OTT is.
Over-the-top or OTT refers to any media content delivered over the Internet to one’s devices. These devices can range from streaming your favorite sitcom on your phone, your laptop, your tablet, or your CTV device. CTV devices include products that use cubes or sticks to connect, for example, an Apple TV, Roku, or Amazon Fire Stick, to your TV. Or a Smart TV that has internet connection built in that allows you to watch your favorite programming outside of your cable box.
OTT users will view commercials similarly to regular broadcast commercial breaks, with ads appearing at the beginning of a show, during, and at the end. Someone using a device where they can mouse click or tap on the video, will also be directed to the advertiser’s website, just like you can when watching a YouTube video. With OTT, viewers cannot skip the video like they can with YouTube, allowing the commercial to play in full.
So why advertise on OTT services?
The simple answer would be to expand your audience. According to comScore, there has been a 53% increase from last year in time spent watching TV through OTT services. In April 2018, OTT only households spent an average of 128 hours streaming OTT content. Take me for example. I cut cable years ago when I started living without roommates. I did not want to pay for a cable subscription on my own, so I opted for an Apple TV to stream my sporting events and binge watch my favorite shows.
Without commercials running on OTT, I would never be reached by advertisers who focus heavily on traditional advertising.
And I am not the only one. The majority of cord cutters are millennials, but studies are seeing an increase in older viewers on OTT content. Even those with a cable subscription are using CTV devices, which means they are being reached on regular broadcast BUT can also be targeted while they are in the next room streaming OTT TV.
Roku, the top connected device on the market, reported in an ad-effectiveness study that OTT ads were 67% more effective per exposure at driving purchase intent than broadcast or cable ads. A potential reason for OTT ads being more effective than broadcast or cable ads, is OTT users select the show they want to watch and are less distracted by channel surfing. Also, with the majority of OTT ads being un-skippable, they have a much higher completion rate than skippable or broadcast ads.
What does this mean for traditional broadcast advertisers?
It gives advertisers, who are already producing professional made content, another avenue to reach an audience they have not traditionally been able to attain. According to the Video Advertising Bureau (VAB), 70% percent of households with OTT capabilities, also have a cable subscription, with the other 30% being split evenly with streaming only and streaming plus cordless antenna. VAB also states that 71% of Internet users use an OTT service at least once a month. While running broadcast or cable ads will still hit the majority of households, having a marketing plan that combines broadcast with OTT will allow advertisers to reach current broadcast viewers in a new way, while expanding their ads to those who no longer have a cable subscription