Streaming has hit the mainstream. According to a new study by programmatic ad tech firm OpenX, conducted in partnership with The Harris Poll, more than half (52%) the U.S. population is now watching video content via over-the-top (OTT) media services. That figure spikes to nearly two-thirds (65%) when looking at 18 to 34-year-olds. In other evidence of OTT’s ascension to convention, household brand giants such as Apple, Disney and NBCUniversal are moving into the market and launching streaming services of their own.
The new report, based on insights from more than 2,000 US adults, points to new opportunities for marketers to expand their ad strategies beyond traditional TV buying to include targeted OTT. Despite the report’s finding that OTT viewing has surpassed live television for many demographics, only $2 billion of the $70 billion spent on television advertising in the US in 2018 was spent on targeted, addressable TV ads. Here are three key findings marketers should know.
OTT Ads Work
72% of streamers recall seeing OTT advertisements and 40% have “paused to purchase” – pausing the streaming content they were watching to learn more or make a purchase, creating significant new opportunities to deliver both lean forward and lean back consumer marketing strategies for OTT.
Size Doesn’t Matter
OTT consumers are mobile-first. On average, OTT consumers use their mobile devices for more than six hours a day and watch more than two hours of mobile video daily. Nearly one-third now say screen size has no impact on how long they watch or the type of content. Millennial OTT users stream more video content on mobile devices than they do on their TVs.
All OTT Viewers Are Not Alike
There is room for different business models. Streamers are about evenly split between wanting an ad-supported or subscription model. A slim majority of viewers prefer a cheaper or free service supported by ads rather than a more expensive ad-free service.
Room to Grow
Dallas Lawrence, chief brand officer of OpenX, told AdAge that this shift in how viewers consume video content represents the most significant evolution in media consumption since the introduction of the smartphone and that marketers must take note. “More than half of all Americans now use an OTT service, and they stream a lot – over two and a half hours every single day. With OTT now capturing a significant percentage of total consumer video time, yet less than five percent of total TV ad spend, an enormous shift in how marketers diversify their advertising strategy is on the horizon. This research clearly signals that the OTT era has arrived, and with it, new and disruptive opportunities for marketers to elevate the power and efficacy of video advertising beyond anything we have seen before.”
With OTT usage at such a significant level, marketers must create a playbook for how they and their agencies will go to market with both digital and linear video and audio or risk being left behind.