OTT stands for “over-the-top,” the term used for the delivery of film and TV content via the internet. Viewers used to have to subscribe to a traditional cable or satellite pay-TV service to watch favorite movies and series on a TV at home. Additionally, they could also access a limited amount of content over-the-air (OTA), depending on what signals were available in their local area.
But with the increase in internet speed and OTT streaming video’s adoption, OTT service apps have changed the way we consume entertainment. We can now watch whatever we want, whenever we want, without paying for a cable subscription.
According to The Drum US, OTT returns the highest completed view rate of any video format at more than 90%.
A significant amount of what’s being watched today on OTT apps is ad-supported. This is causing the industry to reevaluate both the impact of connected TV apps and the future of the television ad business in general; and the success of new ad-supported OTT services and networks like TubiTV and PlutoTV speaks to the power of TV’s original business model, where viewers get to watch the content of their choice for free in return for watching ads — this time with the flexibility of on-demand and easily accessible options.
The ad-serving company, AppNexus, released stats showing a 748% year-over-year “explosion” in connected TV ad sales in 2018.
That’s quite a big number, and this adoption growth is the reason the media industry has been so interested in developments in the OTT and CTV space. This trend is quickly evolving from the future of television into the television of today.
Now is the time to recognize the macro-trend and fully embrace the free, ad-supported OTT future.
For advertisers, ad-supported OTT offers a captivating proposition: a high quality, brand-safe environment, the ability to run high profile, well-produced ads that can be targeted to the exact audience (based on locations and demographics) they’re looking for.
For example, auto advertisers interested in reaching families who are in the market for a new car can target their ad campaign to run with publishers whose content attracts family audiences showing auto-buying intent while limiting their spend to only viewers in the advertiser’s serviceable area. This control bridges the gap between digital video and traditional local TV, increasing campaign efficiency and expanding the local-focused opportunities that advertisers can tap into for successfully reaching their target audiences. OTT gives advertisers the audience-targeting abilities of digital with a high-quality environment you can only get on TV.
The Ad Platform of the Future
By 2020, an estimated $40 billion in ad spend will have shifted from traditional television to OTT platforms. Traditional models for buying television inventory will become increasingly irrelevant due to the change in consumer viewing habits.
Ad-supported OTT is proving to be a strong contender for television advertising dollars as more and more viewers shift away from traditional television. In addition to news channels like Newsy, there are channels featuring high-quality content libraries like TubiTV and Roku Channel, along with hundreds of niche networks that cater to different genres and interests of viewers.
The future of OTT is free content.
Consumers will demand a "rediscovery" of free, ad-supported offerings, which is good news for OTT advertisers.
A recent IAB study uncovered some interesting statistics about the size and demographics of people who watch ad-supported video streamed via OTT. The most interesting finding was that this audience is young (average 18 - 34), affluent ($75K+ household income), and ready for OTT video streaming (45%say they regularly watch ad-supported content).
This looks like a treasure trove for many advertisers and marketers, hitting a rare trifecta of interest, means, and attention.
73% of adults (18+) who typically watch streaming OTT digital video say they watch ad-supported OTT video.
The rise of ad-supported OTT digital video will keep businesses of media companies and advertisers booming into the future.
OTT and linear TV: It's time to integrate to innovate.
In December 2018, Roku reported that its users spent an average of 2.8 hours daily watching video through the platform and that “free” was the most searched term, indicating a preference for ad-supported content.
Ad-supported OTT is doing more than merely evolving the TV format; ad-supported OTT is growing, both for advertisers and for consumers alike.
The number of subscribers ditching cable is steeply increasing, most notably in North America. The pace of digital disruption that is transforming the TV industry is accelerating.
The real value of bringing data and technology to TV is better targeting and measurement. These enhancements will ensure growth within the TV ecosystem itself. OTT technology is about using the best of digital to the benefit of the TV market and enabling TV to evolve by narrowing the gap between traditional TV and digital.
Successful media companies are open to dynamic collaborations and partnerships. As video storytelling evolves alongside viewers and technology, successful TV revenue models will leverage the combined powers of linear and ad-supported OTT, providing advertisers with relevant metrics to measure its impact.
When you're ready to grow your OTT sales, we're here to help you accelerate your success!
SpotX has ranked ZypMedia as one of the top 5 DSPs to help it reach 18x year-over-year growth in advertiser dollars spent on OTT in 2017. We help professionals like you sell more over-the-top advertising every day.
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