OTT is a great medium that continues to expand its reach every year. In 2019, there were 235 million digital video viewers in the U.S., more than 70% of the population. Many of these users viewed content on OTT platforms. What are the OTT basics, and how can they improve your marketing strategy?
What Exactly is OTT?
You might already be using OTT without realizing it. An OTT provider offers streaming media to internet users, standalone products separate from television broadcasts or internet providers. The most common types of OTT media services are video streaming platforms, such as Netflix and Disney+.
This type of on-demand content is highly convenient and popular among consumers. For example, Netflix topped 204 million subscribers and yearly earnings of $25 billion. That's a $5 billion increase in just one year.
Some OTT services even stream live television, like Hulu. Hulu boasts over 39 million subscribers as of 2020, nearly ten million more compared to last year. We can see from each platform's healthy growth patterns that OTT is here to stay.
The Power of OTT
Utilizing OTT allows you to reach people from all demographics. Millennials under the age of 35 are predictably the biggest users of OTT, accounting for 52% of its subscribers. Many millennials with a TV subscription also reported that they planned to cancel their subscription in favor of an OTT service.
OTT has also become more popular with users aged 55 and older; 32% of this demographic has at least one OTT subscription, a huge climb from 19% last year. Those who still have TV subscriptions also reported an increase in using the on-demand video services offered by their TV provider.
According to Comscore's latest OTT report, the average household consumed 102 hours of OTT content per month. It's easy for people to watch a lot of OTT content because it's so easy to access. OTT platforms often have their own apps for mobile devices that allow users to access content at all hours of the day.
Comscore also reported growth in ad-supported OTT platforms by 9% over the span of four months. While this is a great opportunity for advertisers, OTT advertising has some caveats. Unlike broadcast television, you can't choose a specific time slot for your ad. Still, with the number of users watching OTT, your ad may be seen more times than it would on TV.
Benefits of Advertising on OTT Platforms
Expanded reach is the key benefit of placing ads on OTT platforms. While television still reaches a wide audience, it's clear that on-demand streaming is becoming more popular. People are actively seeking out a program to watch with the intent to devote their full attention to it. This means a better likelihood that your ad will resonate with the viewers and inspire them to take action.
OTT advertising also practically guarantees a high ROI. OTT ads are projected to reach a market size value of over $332 billion by 2025. And they’re often cheaper than TV ads, making it a more cost-effective marketing strategy.
Unlike TV ads, OTT advertising is unique because it allows you to track customer behavior in real-time. You can do this by adding clickable CTAs. When you advertise on television, you're casting a wide net. While your message will reach many viewers, those outside your target demographic won't follow through with CTAs. With OTT advertising, you're using a laser-focused approach that will guarantee more sales.
The advent of 5G is expected to change the streaming behaviors of some consumers. Twenty-nine percent of OTT subscribers reported that they would pay a premium for 5G service because of its increased speed and image quality.
User experience (or UX) is also an extremely important factor for OTT subscribers. Customers are more likely to use OTT platforms with user-friendly interfaces, accurate user algorithms, and extensive content libraries.
CTV streaming is more popular now because of smart TVs and devices like the Amazon Fire Stick. Fortunately, it has not led to decreased OTT usage on mobile devices. In fact, using OTT and CTV ads together is a highly successful marketing strategy.
Understanding OTT Basics
OTT is truly one of the most powerful advertising mediums because of its continuous growth and wide reach. Working with a media partner only increases your chances of success with OTT advertising. A marketing partner can help you create the best content for the most popular streaming service among your target demographic.