TV dollars are following eyeballs and shifting to over-the-top (OTT).
As more viewers consume their video content through OTT apps and platforms, advertising investment in OTT is increasing at a rapid pace. Here are four key takeaways from eMarketer's latest (September 2019) report that includes OTT forecasts, data, statistics, and estimates for OTT ad spend and user growth.
Connected TV keeps growing.
Growth in connected TV (CTV) viewership is increasing faster than previously predicted. In July 2019, eMarketer adjusted its 2019 U.S. CTV forecast from 190 million monthly viewers to 195.1 million.
It’s not only smart TV sales driving this accelerated usage. The quick adoption of streaming devices like Roku and Amazon is also contributing to the upward movement as well.
Viewers are increasing their daily consumption of content through CTV.
The time viewers spend watching CTV is growing.
Watching TV no longer requires “appointment viewing,” sitting down at a specified time to watch a specific program. OTT is helping viewers to tune in to the programs they want, whenever they want. Because of this, viewers are shifting from consuming content on traditional pay TV to consuming content on CTVs.
The migration of viewership to CTV is illustrated in the chart below.
Savvy marketers are moving ad budgets into OTT to capture the fragmented viewing audience.
The shift in viewing habits is driving changes in ad spend allocations. With far less appointment viewing happening and more time shifted to on-demand viewing taking place OTT, it’s becoming more difficult to anticipate where and when viewers might be watching. Adding OTT to an advertising campaign or media strategy increases the opportunities to reach a desired audience and extend the messaging beyond viewers tuning in to appointment viewing.
According to polling from IAB and Advertisers Perceptions in March 2019, half of U.S. agency and marketing professionals expected to increase their OTT and CTV spend in the next 12 months.
The shift in ad spend is evident in the increase in ad view share percentages on CTV in FreeWheel’s 2019 report.
In Q4 2018, the amount of impressions FreeWheel (a video ad serving platform) served through CTVs increased to 42%—a year-over-year increase of 11 percentage points.
OTT ad spend momentum is strong.
According to Magna, US OTT ad revenues will nearly double by 2020.
The agency had previously predicted OTT ad revenues would hit $2 billion in 2018, but ad revenues actually hit $2.7 billion with a 54% year-over-year growth rate. Under Magna’s adjusted forecast, U.S. advertisers are predicted to spend $3.8 billion on OTT this year and $5 billion by 2020.
As the growth in CTV viewers continues to accelerate and OTT advertising becomes more widely adopted among advertisers, we’ll continue to explore new learnings and write about new developments that share how OTT can help savvy advertisers best connect with their audiences.
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Contributing Editor: Charel MacIntosh, SVP, OTT Channel Strategy & Sales at ZypMedia