Streaming services experienced steady growth over the past few years. Increasing cable subscription prices, poor customer service, and lengthy contracts had consumers looking for a better alternative. The pandemic put the cord-cutting trend on an even steeper upward trajectory. Netflix revenues, for example, surged from $20.1 billion in 2019 to nearly $25 billion in 2020.
Streaming will soon overtake TV as the medium of choice for watching movies and series. Video streaming makes up 82% of internet traffic. Consumers now depend upon the convenience and custom viewing experience it offers. The trend presents an exceptional opportunity for advertisers. OTT and CTV not only reach viewers that TV does not, but it also allows for enhanced targeting with digital technology.
69.8 million homes used streaming services in April 2020, up 5% over the previous year and growing. Services like Hulu and Pluto TV provide access to shows with commercials at a reduced rate, attracting an even broader viewership while allowing advertisers to reach an engaged audience. The video streaming market is growing, with more platforms joining the significant players every day, such as Apple TV+, Disney+, NBC Universal Peacock, and BritBox. Video streaming will likely reach $223.98 billion by 2028.
Streaming service subscriptions provide programming to 75% of U.S. households. A staggering 82% of all consumers subscribe to one streaming service. 49% regularly use three or more SVOD/OTT services. If you aren't leveraging these platforms for your ads, you aren't reaching the majority of consumers.
OTT advertising allows businesses to reach a captive audience. OTT ads cannot be skipped, in addition to being too short to make leaving worthwhile. The brevity also makes them less intrusive, so they are more likely to be watched and not ignored. More engagement means more significant ROI on your ad spend.
OTT ads are a rich source of analytics data when set up correctly. This data helps you gain insight into your audience's behavior and illustrates how your ads perform. It also enables microtargeting based on location and interest. Common metrics gathered include:
While any media company or digital agency can sell you OTT, you should know that not all OTT is created equal. No one owns the internet, so there is no one entity to ensure service quality or network consistency, such as when moving between Wi-Fi networks or from Wi-Fi to mobile and back. A single video does not display the same in every context. What works on a television or laptop may not translate to mobile formats.
OTT is both unskippable and highly targeted, though a single video does not work for every instance. Be sure you ask the right questions when choosing a media partner. Among the most critical questions to ask are:
Like commercials, OTT ads are video ads shown in blocks of roughly five minutes. However, creators design OTT ads to have more impact with a shorter length. Most are only 15 seconds in a break of no more than two minutes. If you are working with a team to create OTT ads, make sure they make 15-, 30-, and 60-second slots to reach the most extensive inventory of ads.
Cable companies had a monopoly on expanded programming for many years. If viewers wanted anything other than what was available with an antenna, they had no choice but to endure a long contract with their local cable service, often with poor customer service. With the introduction of streaming, consumers could cut the cord. It revolutionized the ability of viewers to choose their content providers and companies to reach their ideal customers.
Any ad campaign aims to reach the broadest audience of consumers most likely to be interested in what you have to offer. They can achieve the highest ROI on your ad spend by presenting your ideal customers with compelling content on their preferred platforms. Since three-quarters of American homes use streaming to watch their favorite programs, OTT is a smart addition to your marketing strategy. The popularity and availability of streaming services will continue to grow, so now is the time to invest.