Over-the-top (OTT), or internet streaming video, is all the talk in today's world of advertising. The living room as we know it is changing, transitioning from a traditional set-top box to OTT devices like smart TVs, streaming services and alternative ways of watching our favorite content. The trend is real, and cable boxes are going the way of the VHS, with 22 million U.S. adults cutting the cord in 2017 (up 33% from 2016), a.k.a. cord-cutters, and 61% of young adults primarily consuming content through OTT streaming services, a.k.a. cord-nevers. Though many advertisers are digging in their heels, OTT advertising provides an unprecedented opportunity for advertisers to reach consumers, optimize ad spends, increase engagements/conversion and more through the OTT landscape.
Users may not be watching as much traditional broadcast TV, but they are not necessarily leaving the living room for their mobile devices and desktops to watch content. Instead, smart TVs, Roku, Apple TV and various OTT devices are becoming popular substitutes for over-the-air or cable television. With this being said, it is no longer as relevant to rely on traditional ratings systems to place ads in the best time-slots. With streaming video, there is a unique opportunity to reach engaged audiences by leveraging OTT advertising to its full extent. Results are not measured strictly by how many viewers were reached as with broadcast television, but how audiences are engaging with the ad. This ultimately can lead to more effective advertising via OTT monetization that can be more valuable than broadcast TV.
In fact, according to a Freewheel study, OTT viewers complete 98% of video ads compared to ad completion rates on non-OTT devices. Because of this, streaming video viewers have reported to have higher brand awareness and brand favorability compared to other users viewing on mobile devices or desktops. Viewing habits may indeed be changing, but they are not necessarily transitioning from the big screen to a smaller device.
As users shift from watching broadcast TV to OTT and streaming, advertisers are also in a great position to effectively reach their target customer through dynamic ads. If properly set up and targeted effectively, dynamic ad insertion boosts the performance of ads while preserving the user experience, leading to a win-win for the user and advertiser. While there are several ways to effectively monetize ads, the ability to curate and personalize ads to reach those most inclined to convert are the most valuable.
However, for TV dollars to move into this space, customers first need to invest in testing out OTT ads with their agency counterparts. Once results are measured and success is proven, advertisers can continue to push for the future of OTT in advertising and effectively target audiences. Through internet streaming content, the future of TV advertising is more promising than ever before.
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