Television viewership and viewing preferences have been making a shift due to the rise of over-the-top television (OTT).
An eMarketer interview titled, “Google Discusses the Rise of OTT TV, How Viewers Are Using the Services” with Rany Ng, Director of Product Management at Google, gives us Google’s explanation of OTT, which helps to define it. “When we refer to OTT, we really refer to over-the-top services that allow users to watch TV content that’s delivered over the internet instead of traditional TV infrastructure. Hulu, Netflix and CBS are examples of OTT services. And OTT services’ content can be streaming, it can be on-demand, and it can be viewed on a number of different types of devices – from a desktop or laptop, to mobile, to something like Roku or a smart TV.”
Ng also goes on to discuss why consumers are tuning into OTT and in what ways. “They can watch things on the go. It’s on their own schedule, so it’s very different from linear television where it is scheduled viewership.” In this day and age where consumers expectations of personalized products and services are never-ending, we can understand why people have responded positively to OTT. A separate poll from eMarketer shows us that 48% of U.S. internet users strongly prefer to watch TV via OTT services.
But what does this mean from an advertising perspective?
Well, TV audiences have always been a primary consideration of media buying. And it is vital to be aware of the channels that win viewership and the characteristics of different audiences across channels. It’s our job to keep up with changing trends while keeping a non-biased, full circle view of the landscape.
Advertisers will have to continue to strategically place different cross-channel media according to their own goals and audience composition. For instance, research from eMarketer shows that Millennials are responding a lot quicker to OTT than Baby Boomers and Gen Xers. It also shows that the trend hasn't necessarily been adopted strongly by other countries like Canada, Australia and the UK. Many other factors need to be weaved in and considered by advertisers before buying media.
Regardless, OTT adoption is an accelerating trend and data shows that it’s a legitimate contender for media dollars.
But as it grows into its own, OTT is uncovering its own issues around increasing demand and the effect that has on inventory. Also, because these platforms allow companies to deliver their ads to a very specific target audience of their own design, users are sometimes left sitting through the same advertisements repeatedly throughout their episodes because they are the prime target of that ad. This frequency saturation can affect consumer attitudes and brand sentiment in less positive ways, actually driving consumers away.
Each medium has its own strengths and blind spots. Broadcast TV ads build the basis for a brand over time because of its ability to hit a wide range of people, while digital television is growing as a complementary method, contributing to a multichannel customer experience. OTT, Connected TV or streaming video reaches audiences that may not be watching as much scheduled programming. TV also generally shows the most significant ROI over time, with digital showing a strong ROI early on but usually dying out sooner.
As new trends and forms of media consumption arise, advertisers will continue to assess the best media channels to reach audiences, meet client needs and complete business goals. This can only be done by keeping up with current consumer channels and navigating the steady rate of change in the industry. We will never stop learning.
Market Research & Insights