In 2019, the term “cord cutter” is no longer a phrase thrown around by a small group of tech-savvy, budget-conscious millennials. It has entered our common lexicon. While traditional cable is still the leading TV viewing medium, this term is indicative of the growing shift towards over-the-top (OTT) and connected TV (CTV) adoption.
With nearly 55 percent of the U.S. population already using CTV (Roku, Amazon Fire Stick, Chromecast, etc.), marketers have no choice but to prioritize these streaming platforms as highly valuable outlets for their advertising dollars. However, the road ahead is not necessarily easy. As with most new and disruptive technologies, there are both significant obstacles and opportunities that come with this new advertising medium.
Obstacles to adoption
Marketers are dealing with a fragmented landscape; from smart TVs to gaming consoles to TV sticks, marketers are faced with an overwhelming list of sellers. For marketers who are accustomed to the standardization of linear TV, the multitude of apps and devices creates hurdles. Not only do each of these platforms have different pricing models, but they also have unique delivery specifications. The range of platforms allow for brands to reach more narrow audience segments, but there is an undeniable added layer of complexity when compared to linear TV ad purchases.
The fragmentation also extends into measurement. While traditional TV has had long-standing Nielsen ratings to collect and measure data to guide informed ad purchases, OTT/CTV have only recently taken steps toward more uniform measurement, with Nielsen announcing in January the addition of OTT ratings.
Benefits of integrating OTT and CTV into your advertising strategy
For all the obstacles that currently exist in this fragmented landscape, the value of reaching the streaming-engaged population cannot be ignored. One major draw of OTT is its sophisticated targeting capabilities. Programmatic advertising and integration of third-party data allow for more granular targeting to ensure brands are reaching optimal viewers. While linear TV ads are more broadly targeted by audience, OTT has an advantage — it can display ads that are unique to the individual viewer. For example, streaming services often require you to login with credentials from other platforms such as Facebook or your cable provider. This allows third-party sources to formulate unique user profiles. Some streaming platforms have even begun leveraging smart TV technology to track individuals’ linear TV viewing habits, allowing them to better target those same viewers with ads when they are using streaming services.
Another key opportunity is the increased engagement offered via CTV. CTV streamers actively seek out the entertainment they are viewing, and marketers should take advantage of this engaged audience. Unlike in the linear TV environment, where many are DVR-ing past commercials, OTT’s average video ad completion rate is 98%. This is because streaming services often force the viewer to complete an ad in its entirety before proceeding to the next block of entertainment. The inability to fast-forward may seem burdensome, but viewers are generally unbothered by this due to the shorter ad segments and tailored content.
Ultimately, the future is bright for OTT and CTV advertising and marketers should be excited about the opportunity to reach more engaged viewers. As more viewers use streaming services in conjunction with traditional TV, marketers must reallocate ad dollars to stay ahead of the changing landscape. Luckily for you, SpotX specializes in OTT/CTV content. Use our online tool, SpotX Explorer, to learn more about the premium inventory you can access on the SpotX Platform.
This article was written by Zachary Atlas, product marketing manager at SpotX