As the demand for content viewed over streaming services continues to grow, so does the opportunity for ad spend in over-the-top (OTT) and connected TV (CTV). Thanks to the rise of shows like Stranger Things and Game of Thrones in popular culture, streaming content has become a household name that is helping close the viewership gap between OTT content and traditional TV.
While OTT is revolutionizing the way we think about and interact with TV, it’s still a new frontier rich with possibilities. Despite the fact that more than 50% of Americans use at least one OTT service to access content and 75% are expected to connect their TVs to the internet by 2020, ad spend remains comparatively low. According to Magna Global, OTT accounts for 29% of TV viewing but has only captured 3% of TV ad budgets so far.
We’re sitting on the precipice of change. With more than 1/3rd of all American households cutting the cord, OTT ad spend is expected to increase 20% this year while ad requests on CTV are up 1,640% year-over-year. As OTT content viewed over CTV devices steadily becomes the new norm, there are opportunities and barriers to increasing ad spend as more viewers leave linear TV for a new future.
Barriers to Growing Ad Spend
Because every OTT media channel has its own set of metrics, users consume content across multiple devices and many share their OTT accounts with friends and family. This makes measuring the impact of creative difficult.
From Netflix to Hulu to Roku, the OTT landscape is new and noisy, making it challenging to combine audience reach into scalable media plans while using the granular addressable targets today’s marketers demand.
Opportunities for Growing Ad Spend
OTT and CTV currently have a perception problem. According to Nielsen, nearly 25% of the 165 marketing executives surveyed in a 2018 study stated that OTT/CTV wasn’t important to their current media strategy. To increase spend, continued education surrounding the benefits of OTT/CTV advertising are essential.
CTV impressions are sold on a one-to-one ratio, but, 93% of the time, there are multiple viewers in the room. Co-viewing is an important consideration when buying inventory given its added value to advertisers.
While the path toward an OTT revolution is not without its challenges, it promises to be a rewarding destination. Interested in learning more about how to integrate OTT into your media plan or seeing what type of inventory is available? Drop us a line or check out SpotX Explorer, our online tools that shows you the types of premium inventory you can access on the SpotX Platform.
This article was written by Bethany Lechner, product marketing manager at SpotX