The OTT revolution is well on its way, and it is impacting the advertising ecosystem like never before. OTT ad spending is rising on the account of its sharp ability to target niche audience sets. Unlike traditional TV — where targeting was more of a broad brush stroke in the age of hyper personalization — OTT brings a new opportunity to target ads based on viewers’ online behaviours, web browsing habits, lifestyle traits, and so much more. Thanks to the interactive, choice-based nature of OTT viewing, advertisers now have a wealth of insights about what content viewers watch, when they watch it, and the amount of time they spend on entertainment everyday
US advertisers spent nearly $70 billion on TV ads in 2018,yet less than 5% went to targeted, addressable TV ads.
OTT ads, while nascent, have proven effective, with 72%of OTT consumers having recalled seeing an ad and asurprising 40% of those who have seen an ad having“paused to purchase”, where they paused content to buy or learn more about a product.
The opportunity for brand marketers is to reinvent how they approach OTT advertising to deliver the TV-like creative experience consumers enjoy, in the newly relevant and highly targeted way OTT enables.
OTT Advertising: Delivering Relevant 1:1 Ads
Of consumers who want a fully ad-supported model, they are willing to watch 7-10 minutes of ads an hour for free OTT content; much less than the amount of ads they see today on broadcast TV. If ads can be more targeted, however, there is an opportunity for advertisers to cut down on the total number of ads shown. Fewer, more effective ads will deliver a higher return for both the brand marketer and for the content creator who will be able to charge more for their highly desirable inventory - a true win-win.
When building out addressable TV strategies, however, the rampant password sharing in OTTwill make life difficult for advertisers that do not go beyond logged in passwords and traditionaltargeting formulas to develop campaigns. For OTT advertising to reach its full potential, advertisers need to understand, in a fully privacy compliant manner, the entire data picture of the user behind the screen. By unlocking a true people based marketing approach to OTT, advertisers will be able to deliver the 1:1 advertising experiences consumers want, driving far greater ROAS for marketers and streaming providers alike.
72% of OTT users understand there is a tradeoff between watching free content & having advertisers use their data to serve ads
1/3 of consumers use shared passwords with OTT services
A majority of all US consumers say they are not bothered by ads when they are relevant