OTT Is Key For TV Marketing Plans

OTT Is Key For TV Marketing Plans

Investment in digital advertising (Google, Facebook, etc.) has been higher than traditional media for a few years. Historically, however, viewers have spent more time with traditional media (broadcast TV being No. 1) than digital.  This metric has generally driven linear media plans but now consumers are spending more time with digital than traditional media.

The shift to digital, including digital video, is a result of billennial maturation and the entrance of GenZers into the coveted 18-49 demo. As a result, it’s a great time to establish a foothold in OTT media now while competition and rates are still relatively low.

Why does OTT matter? 

There will be over 24 billion connected devices globally by 2020, per Business Insider. This presents both a challenge and an opportunity for advertisers. The distraction of multiple devices has reduced the effectiveness of one-size-fits-all TV.

Sophisticated advertisers with higher ad spend can use this distraction to their advantage by creating content specifically designed to connect across all screens, with unique content for each device (broadcast, live social feed, exclusive mobile content, promotional landing page, and AR-embedded print material).

The Video Advertising Bureau says OTT delivers 42% market exposure on its own, and one-third of all OTT households have three or more subscription accounts. The reason for the rising trend away from traditional bundles isn’t the number of channels. Actually, demand for content is higher than ever. But historically, linear multichannel subscriptions bundle too much content for too much money, and require too long of a commitment.

OTT removes these barriers and responds to the needs of an ever-growing population of consumers: freedom of choice, personalization and convenience.

Reaching Millenials and GenZ

The millennial generation has been widely identified as the most coveted demographic for marketers, but catering to this segment requires a shift in content provisioning.

While the majority of baby boomers and Gen Xers gravitate to broadcast television, 86% of millennials and GenZers watch their favorite programming via OTT.  OTT’s projected annual growth through 2022 is more than three times higher than traditional TV.

Despite this trend, only 15% of advertisers consistently include OTT, reports Adweek. That represents a tremendous opportunity for companies marketing to the growing population of younger viewers.

Fixed vs. variable pricing

Broadcast advertising is fixed cost and priced according to ratings. Streaming costs are based on the number of total viewers (bandwidth used), as well as the number of views per person. When infrastructure, business models, and paradigms are entrenched after decades of selling TV advertising one way, it’s difficult to change.

Formula for success 

While OTT grows, it is most effective when combined with the proven results of linear television. Consider the following from the Video Advertising Bureau:

• 70% of OTT households also have a linear multichannel subscription 

• When linear TV and OTT are combined, brand favorability doubles to 99%

• Message reinforcement and incremental reach are increased 

• More premium ads are delivered