Americans are still obsessed with television and movies, but the way they consume their favorites has shifted.
As of summer 2020, more than 55% of U.S. households subscribed to at least 1 online streaming service. To reach those subscribers, over-the-top (or OTT) advertising is key — and while it may look just like regular television advertising, OTT ads are completely different than a traditional television commercial break.
Americans who watch television via a cable or satellite subscription dropped about 20% from 2015 to today, and more than 70% of those say it’s because everything they need is at their fingertips at any time.
While Netflix currently has no advertising — and no plans to add commercials any time soon — almost every other well-known and budding streaming service does. However, that doesn’t mean Netflix is unaware of who is watching what at all times.
One of the biggest perks of OTT advertising is the amount of demographic data collected by every service. Using that data to your advantage is a key ingredient in a great OTT marketing plan. With the enhanced targeting abilities, ads can be pushed directly to your ideal audience. Plus, there’s immediate data to analyze the success of your ad campaign and tweak it if needed before wasting millions on a national push that goes nowhere.
With Hulu hosting both original content plus live shows from almost every channel the day after airing, it’s easily one of the most popular streaming services and it is packed with ads. Much like a standard television schedule, Hulu pushes multiple ads every commercial break.
Hulu’s ad selector is one of the main reasons companies are flocking to these OTT ads. According to the service, the ad selector is 150% more effective at developing recall than traditional television and increases viewers’ intent to purchase.
One major benefit is the array of ad length options. Hulu offers spots for 7-, 15-, and 30-second ads to run before, during, or after shows. Hulu even handles all the technical aspects from encoding to hosting for a seamless transition for businesses new to over-the-top advertising.
YouTube paved the way for streaming as we know it today. One of the original social media platforms, YouTube is mostly used with free accounts that intersperse ads between as well as during longer videos.
These OTT ads are controlled through Google Ads to maximize your user reach. YouTube offers multiple types of advertising formats, including some options that can’t be skipped by the viewer.
For ads that can be skipped, like TrueView ads, advertisers only pay for spots where viewers watched at least 30 seconds or interact with the video. That means less money wasted on commercials that aren’t being seen or bringing in sales.
Streaming isn’t only for television and movies. Millions of radio listeners have left the wavelengths in the past and now use Spotify, Apple Music, and other internet radio options.
Spotify has taken over the internet radio market with exclusive new album releases, premium features for paid accounts, and a plethora of podcasts. However, the ad rates originally skyrocketed as the service gained momentum.
Now, a mere $250 is necessary for an advertising campaign minimum with an average per-ad price of $0.015 to $0.025 depending on your target audience.
Last year, Spotify rolled out a new tool for advertisers to analyze podcast commercials after podcast consumption rose 39% in just a few months in 2019 and has only continued to climb. Before the company’s Streaming Ad Insertion tool, the only key measure for reach was number of episode downloads, which doesn’t mean an ad was heard within the episode or that the episode was even ever played.
This year, ad revenue from podcasts alone is projected to top $1 billion, making podcast ads a crucial tool for a digital advertising plan.
If you’re looking to dip your toes into the OTT advertising market, we can help! Contact us today and let us help get your brand message in front of key demographics on phones, tablets, laptops, and televisions all at once.
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