Why Smart Marketers are Allocating Ad Spend to OTT Media
If a person from the year 2005 were to visit us today, they’d find that most things in our daily lives hadn’t changed dramatically over 13 years.
Until they decided to watch a film or a television show, of course. Then they’d realize the way people consume content has been radically altered in a brief span of time.
In 2005, you didn’t watch a movie on Netflix — you watched a movie from Netflix (and only after waiting two days for it to arrive in the mail). If you wanted to watch your favorite TV show, you had to view it live or record it. Hulu didn’t exist, and the very idea of video-on-demand was in its infancy.
Now, just a bit more than a decade later, a video store is all but extinct. The idea of a snail-mailed subscription DVD service seems quaint and faintly ridiculous. We watch what we want, when we want, on the device we want.
In other words, we watch Over-the-Top (OTT) media — and that’s something with profound implications for marketers.
Cable vs. OTT
Over-the-Top is a term to describe the process by which content is streamed directly to consumers over the Internet by media services. Much like cable technology revolutionized broadcast media by greatly expanding the viewing choices available to consumers, OTT media has transformed modern viewing habits.
Instead of the need for a conventional cable or satellite over the top box, OTT media streams directly to the viewer, bypassing television and telecommunication platforms that have historically acted as distributors of video content. Today’s most popular forms of OTT media include subscription-based services such as Netflix, Hulu and Amazon Video.
In addition to offering content created by TV networks and film studios, these OTT platforms also create significant amounts of original material, making them full-fledged competitors to traditional content creators and distributors.
Why OTT media is critical for today’s marketers and advertisers
This profound change in viewing habits, content creation, and distribution models hasn’t gone unnoticed by marketers and advertisers. Today, eight-in-ten U.S. homes have an OTT subscription, according to a PwC study, while emerging markets are embracing OTT at an even faster rate. Additionally, Ericsson projects that 75% of all mobile traffic will be dedicated to video streaming by 2023.
OTT media is particularly popular with younger people, who subscribe to OTT services at even higher rates than the general public. As society grows younger and more tech-oriented, marketers are changing their media buying habits and designing campaigns optimized for OTT.
In years past, marketers were hamstrung by single screens and a limited pool of content. Today, content is available on multiple devices and programming options have never been greater.
OTT media platforms have led the way in using data analytics to accurately gauge what their viewers are interested in seeing. This has resulted in a proliferation of new films and series that are focused on niche audiences who have been historically underrepresented on broadcast networks and cable. Because this content is targeted and deeply relevant, viewers tend to be hyper-engaged — music to the ears of marketers and advertisers.
The OTT model also allows for more control of how and where ad content is displayed, and how ROI is tracked — all key considerations for a multi-platform campaign.
How multi-platform campaigns can derive maximum benefits from OTT media
Recently there have been studies undertaken to gauge the effectiveness of multi-platform OTT advertising. The results are compelling: According to a joint study by market research firm Kantar Millward Brown and Hulu, OTT significantly outperformed in terms of ad performance.
In cross-platform testing, OTT and mobile were the most successful in terms of reaching key ad objectives. Overall, among PC, mobile and OTT distribution, OTT ranked highest in aided awareness and brand favorability, while mobile ranked highest in purchase intent.
OTT also plays an important role in preventing potential ad fatigue generated by a multi-platform campaign with high ad frequency. The aforementioned study showed little to no decline in an ad’s effectiveness even after up to nine OTT media exposures.
Ultimately, the case for greater OTT focus in a multi-platform campaign comes down to a few key factors. First, advertisers need to reach people where they are — and OTT media is quickly becoming the default mode of content consumption, as traditional TV providers are losing millions of subscribers each year.
Second, the tools available to create OTT strategies and measure their effectiveness are becoming ever more refined. Today, marketers can identify campaign targets via demographic segments across multiple platforms. The ROI from ad campaigns can be quantified by the use of measurement tools that show how OTT ads perform relative to other platforms.
Taken together, all of this information helps marketers reach an informed understanding about how to optimize their campaigns and allocate their advertising spend.
BIGEYE and OTT
At BIGEYE, we’re proud to be a technology-forward marketing agency. We have the expertise and the tools to help you create the kind of compelling multi-platform campaigns that generate real, measurable results.
We believe that OTT media is going to be an essential part of successful campaigns moving forward — and we encourage you to look for the next in our series of articles about getting the most from OTT strategies.
Contact our media buying experts today to incorporate OTT media into your next campaign!