“Netflix and chill” may mean more than just, ahem, getting together to watch TV. But the fact that it’s now part of our shared lexicon should also say something significant to marketers; Over-the-top (OTT) TV is here to stay!
OTT refers to TV content streamed over the internet to a connected device such as a smart TV, Amazon Fire Stick, computer, tablet or smartphone. That’s a LOT of screens! According to the Video Advertising Bureau the U.S. has over 820 million connected video devices and 71% of internet users also use OTT services.
Streaming content is usually provided by a subscription service such as Netflix, Amazon, Disney+, Hulu and others. These companies have driven us into a new Golden Age of TV! In 2018, according to Medium, nearly 500 scripted shows were created for streaming services, surpassing basic cable and broadcast. What’s more, OTT providers now hold exclusive licenses to stream favorite shows that were previously televised.
Cable companies haven’t ignored the streaming content trend entirely. Viewers who pay for cable can now often stream cable shows on their smart TV, computer or from apps, such as HBO Go, on their phone on demand.
The growth of OTT is a direct result of dissatisfied cable and satellite subscribers “cutting the cord” and turning to other options for cost-effective TV viewing. The OTT trend is growing among all demographics and by 2022, per eMarketer, 55.1 million more people will no longer watch traditional pay TV. This offers exciting opportunities for advertisers as we find ways to reach this OTT audience.
What does this mean for marketers?
This may mean a change in traditional media strategy and allocations. We all need to look at OTT as an opportunity to reach customers in a new way. Many OTT providers place video ads in the middle of streaming content, just like traditional commercials on TV. And even better for us, viewers usually can’t record the content or fast forward through these streaming commercials.
To reach the entire OTT audience it’s important to be on all screens they’re using in order to engage wherever and whenever they watch their favorite content. And—extra good news that should make marketers giddy—Adweek says two out of every three people actually use a second screen to look up information about a product they see while watching a program!
If you’re a traditional TV advertiser, now’s the time to take a hard look at OTT to reach current customers and a shiny new audience. Interested? Our programmatic media buying pros can tell you a lot more about it!