What the Future of OTT Looks Like

Amrita Hemdev
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By Amrita Hemdev
August 01, 2018
Digital video is one of the most exciting and powerful advertising channels today, and it's only getting better as new platforms and technology emerge. In the digital advertising world, much of the video conversation has focused on over-the-top (OTT) digital video, and for a good reason.
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On mobile, due to the size of the screen and data costs, shorter is better. So what can brands and content creators with more significant stories to tell do to get their messages to consumers?

Enter OTT platforms. Streaming services like Hulu, Netflix, Sling TV, FuboTv, and more are ushering in the new, digital phase of premium TV.

Consumers are spending more and more time on streaming OTT content. Big shifts in viewership habits have been occurring and now threaten the future of traditional TV’s viability. A Nielsen study in October 2017 revealed that in the last five years, there has been a 40% drop in traditional TV viewing by 18 to 24-year-olds. With that kind of wake-up call, entertainment giants have started teaming up with digital partners or try to create a new digital universe.

 

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The rise of OTT will keep businesses booming. Longer videos lend themselves to longer breaks for advertising. In many ways, this is as close as advertisers can get to recapturing the heyday of TV marketing.

 

Here’s what the future of OTT will look like:

Combining the power of linear and OTT

While consumers are slowly decreasing the amount of time they spend watching linear television, it's much more accurate to say that TV consumption is evolving from linear TV to OTT digital video viewership.

OTT is doing more than merely evolving the TV format; OTT is growing, both for advertisers and for consumers alike.

 

"At ZypMedia we see an upturn in OTT devices and experiences. In 2018 (January - June), 47% of all the ads we delivered were placed via OTT devices. This represents a 52% growth from 2017 (July - December), and we don't see this trend slowing down anytime soon."

Aman Sareen, Co-Founder and CEO, ZypMedia

 

The future of television is television.

The real value of bringing data and technology to TV is better targeting and measurement. Thus, there will be growth within the TV ecosystem itself. It’s about using the best of digital to the benefit of the TV market and allowing TV to evolve by narrowing the gap between traditional TV and digital.

 

Advertising to connected TVs is going to explode in 2018

Connected TV and OTT is the ad platform of the future.

Ad-supported OTT will prove 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 Cheddar, Newsy, and The Young Turks, there are channels featuring library content like Tubi.TV, along with hundreds of niche networks that cater to any and every interest.

By keeping ad breaks shorter and more personalized (after looking at who the viewer is, where they are located, and what device they are on before deciding which ad to insert) and by using the digital platforms to make greater use of advanced advertising techniques, the industry can create an experience that does not feel strenuous to viewers the way the four- and five-minute ad blocks currently found on linear TV do.

That will not only expand the amount of viewing that’s happening on connected devices, but also the amount of money that advertisers will spend on it.

 

Rising need for on-demand content

In October 2017, advertising via OTT media accounted for 26% of total video ad spend, according to a report by SpotX, an online video ad serving platform. That’s certainly a respectable proportion for a relatively new area of media. But the real reason this statistic should have you reading attentively is this: in October 2016, OTT accounted for only 8% of total video ad spend. In just one year, the proportion spent on OTT has more than tripled, and it’s set to grow further in 2018. OTT is worth taking notice of – if you haven’t already.

This year, eMarketer estimates that 181.5 million U.S. consumers will use connected TVs at least once every month -- equating to more than 55% of the U.S. population -- and by 2021, that number will expand to 194.4 million, which is almost 58% of the population.

The number of subscribers ditching cable is rising precipitously, most notably in North America. The pace of digital disruption that is transforming the TV industry is accelerating: the growth in IP-delivered TV content is reshaping distribution models, consumer viewing habits, and advertising.

OTT content providers, who provide content through broadband connections, are on the rise letting viewers watch what they want, when they want, for a fraction of the cost of most cable subscriptions.


Media companies have to be open to dynamic collaborations and partnerships, and, as video storytelling evolves alongside viewer consumption habits and technology, successful TV revenue models will be those that leverage the combined powers of linear and OTT and provide 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.

You have questions about selling OTT advertising. We have answers. Learn more about how an OTT solution can support your business growth.

LEARN MORE

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Amrita Hemdev

Amrita is an inbound marketer. She studied marketing and project management at UC Berkeley and proceeded to work in a fast-paced, digital advertising tech startup, with a goal of increasing brand awareness. She is currently the Content Marketing Specialist at ZypMedia. Passionate about digital marketing and having five years of experience in this field, she also started her digital marketing and creative agency, Sociato, based in India.
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