OTT Subscriptions are Growing: Why Advanced TV is the Way to Go


The rapid rise of over-the-top (OTT) video services like Netflix, Disney+ and Hulu is fundamentally disrupting how audiences consume entertainment content. With OTT subscriptions projected to reach 1.43 billion globally by 2027, it is more vital than ever for media companies and advertisers to adapt marketing strategies to this new streaming-centric world.

Advanced TV encompassing internet-delivered video, data-driven linear TV and digital/CTV convergence presents the ideal platform to engage today’s cord-cutting and cord-shaving viewers who are flocking to OTT for ad-free on-demand shows and movies.

Here we examine why advanced TV solutions centered around connected TV (CTV), digital video and audience targeting now represent the critical path for brands and media owners to reach audiences that have moved beyond traditional broadcast and cable.

Reach Audiences Where They Are Now
The soaring adoption of video streaming reflects a profound shift in viewer behavior and preferences that demands a realignment of marketing strategies. With consumers overwhelmingly gravitating to internet video platforms, the ability to find audiences on CTV and online video is becoming imperative.

According to eMarketer, American adults will spend nearly one hour more per day watching online video than cable in 2021. Nielsen reports that streaming grew to 27% of TV viewing in 2020 up from just 10% five years ago. OTT has gone squarely mainstream.

This enormous eyeball migration makes advanced TV advertising intrinsic to plans targeting younger demographics especially. A Moore report found 87% of millennials subscribe to an OTT video service underscoring the segment’s embrace of streaming.

Red Ventures research revealed 60% of consumers discover new brands via streaming compared to just 40% through linear channels. Deloitte also found over half of consumers who canceled cable replaced their entire TV time with streaming.

This makes OTT advertising key to reaching emerging generations who prefer internet video. “Younger audiences are largely absent from traditional TV,” notes Anindya Datta, CEO of CTV advertising firm PREMION. “Sophisticated CTV and digital video strategies are imperative to fill this widening coverage gap.”

Capitalize on Viewer Engagement
Significantly for advertisers, research indicates OTT viewers are more attentive, receptive and responsive to relevant ads compared to traditional television. With better content targeting in more distraction-free environments, ads can achieve stronger impact.

According to surveys by Magid, 45% of CTV viewers recalled ads from streamers compared to just 32% for broadcast television. Nielsen likewise found OTT ads generate a third higher attentiveness score over linear TV.

This demonstrates the power of engaging streaming audiences already passionate about content they proactively selected. Ad recall jumps for brands aligning with programming contexts viewers have demonstrated interest in through their platform subscriptions and viewing habits.

“OTT ushers in an era of engaged, intentional viewing that allows serving contextually relevant advertising driving superior results,” commented Justin Hillenbrand, Senior Director of OTT Platform Strategy at media agency OMD. “This presents a huge opportunity for marketers amid the behavioral shifts.”

Reflecting rising effectiveness, 70% of advertisers plan to increase CTV ad budgets according to IAB research. This includes major brands like Toyota, Dollar Shave Club and L’Oreal who report stronger yields from advanced TV campaigns.

Apply Data for Smarter Advertising
Advanced TV also unlocks audience targeting opportunities by harnessing first and third party data like never before. Instead of uniform linear ad insertion, addressable advertising enables different households to receive ads tailored to their preferences and demographics.

This allows optimizing messaging for diverse audiences from sports enthusiasts to new parents. Advertisers can take targeting even further by integrating their own customer data with anonymized viewer data to find high-value segments.

Using advanced TV ad platforms, brands can also retarget consumers who previously visited websites based on associated IP or device IDs. And metrics like actual impressions viewed rather than just served allows optimizing video ad plans based on hard performance data.

“The integration of data, digital and TV ushers in a new era of accountable, measurable and extraordinarily targeted video advertising,” said Sean Cunningham, CEO of CTV ad-tech firm HiperTV. “This is lightyears beyond the one-size-fits-all spray-and-pray approach of traditional television.”

Coordinate Video Experiences Across Screens
While CTV offers unmatched reach into streaming-first audiences, marketers must still consider viewership happening across platforms from smart TVs to smartphones. Advanced TV solutions enable orchestrating holistic video advertising strategies encompassing CTV, desktop video, mobile apps and linear.

Using software to centralize video ad operations, media buyers can seamlessly target audiences, optimize budgets and analyze performance across channels and screens. This unified approach prevents channel siloes and ensures messaging stays consistent across devices.

“Gone are days where digital and linear TV planning happened separately,” said data-driven TV firm Beachfront CEO Frank Sinton. “The future is converged video strategies harnessing data to choreograph video experiences tailored for individuals regardless of which screen they are watching.”

This cross-channel capability will be crucial as mobile-first young viewers become core video consumers. They expect consistent ad encounters immune to which device they are streaming on at any moment. Advanced TV delivers this flexibility in ways walled legacy channel plans cannot.

Boost Advertising ROI
The precision targeting, analytics and multi-screen reach offered by advanced TV solutions enable advertisers to maximize return on ad spend and gain competitive edge. With smarter audience alignment, messaging relevance and response measurement, brands achieve more impact for every dollar.

A Beachfront study found that advanced TV solutions can achieve double-digit percentage improvements on key brand metrics like recall, favorability and conversion intent compared to linear TV. The performance edge widens further when leveraging data.

MediaScience research also discovered a purchase intent lift of up to 20% using digital targeting of linear TV ads versus standard age and gender based buys. This allows efficiently focusing spend on households most likely to act rather than wasting dollars on broad untargeted exposure.

Streaming intelligence firm Conviva’s analysis of advanced advertising campaigns calculated an average sales lift of 1.91% when applying tech like dynamic creative optimization versus traditional campaigns. The incremental gains quickly add up from using data to optimize messaging and placements.

“Technology is unlocking a new level of enhancement for TV that enables far better consumer experiences leading to superior marketing outcomes,” summarized Amobee CEO Philip Smolin. “Spending will unquestionably follow consumer attention and performance.”

Overcome Legacy Barriers to Ad Relevance

Advanced TV advertising also tackles legacy barriers that have constrained the relevance of linear commercials reflected in declining memorability. Addressable ads shown only to targeted households along with dynamic creative that optimizes messaging individually overcomes the impersonal status quo.

CTV takes customization even further by allowing marketers to swap creatives in real-time aligned to a viewer’s interests inferred from content selection and analytics. This keeps ads contextually relevant even as interests shift between shows.

Together these capabilities translate to improved perceptions and responses compared to broadly distributed generic ads. Beachfront’s research shows advanced TV drives a third less ad avoidance and 30% higher completion rates as viewers see personalized ads worth watching.

“Delivering the right content to the right person at the right time is absolutely critical for advertising effectiveness today,” says Sean Cunningham of HiperTV. “Advanced TV solutions will be instrumental for brands providing relevant impressions that viewers embrace rather than avoid.”

Monetize and Scale New OTT Content
For publishers and media companies, advanced TV advertising provides an essential revenue channel supporting investment into original streaming content critical for attracting today’s audiences.

As linear viewership declines, media firms must reorient operations towards over-the-top streaming funded by digital video advertising. This makes implementing advanced formats like addressable ads, dynamic pods, interactive units and pause video ads urgent priorities.

Media giant Discovery reports that its addressable advertising pilots outperformed traditional channels on engagement and sales. The company also credited dynamic ad insertion with reducing commercial load by 30% while boosting satisfaction.

“Building seamless ad capabilities across our streaming ecosystem is imperative to opening sustainable revenue streams in the OTT world,” commented Discovery VP Aaron foerster. The company aims to gather 40% of ad revenues from digital including CTV by 2022.

New streaming entrants are also banking on advanced advertising to self-fund growth. For example, NBCU’s Peacock streaming service monetizes its free tier using advanced ads targeted based on viewer preferences and context.

“As audiences migrate to streaming, deploying smart monetization strategies across OTT platforms is an imperative rather than nice-to-have,” advised Eric John, VP of MediaHub. Publishers must balance experience and revenue through advanced capabilities.

Gain Insights from Unified Analytics

Fragmented data across disconnected systems severely hinders decision making as TV and video advertising converge. This calls for unified data platforms providing a holistic view of audiences, inventory, campaigns and performance across linear, digital video and OTT.

“Activating the full benefits of advanced TV relies on measurement and optimization across channels to incrementally improve outcomes,” says BEACHFRONT’S Frank Sinton. “Analyzing data collectively rather than in silos unlocks this understanding.”

Integrated dashboards provide comprehensive visibility that is impossible when channel analytics remain partitioned. Being able to analyze true cross-platform audience reach and overlap enables optimizing investments for maximal efficiency and impact.

This attention to omnichannel analytics will be crucial for maximizing ad impact and return across paid, owned and earned media touchpoints. Streaming-first young consumers expect consistent messaging as they fluidly switch between devices and platforms.

“To win amid media fragmentation, having holistic data visibility is everything,” says Amobee’s Philip Smolin. “Connecting the dots across FTA, OTT, desktop and mobile allows executing and evaluating strategies based on unified audience understandings.”

Choose the Right Ad Tech Partner
Successfully navigating advanced TV ultimately requires partnering with an ad tech provider offering full omni-channel capabilities. Look for vendors providing a stack including programmatic CTV, data-driven linear, predictive analytics, cross-screen planning and unified reporting.

This comprehensive solution allows marketers to target, personalize, optimize, measure and consolidate advanced TV activities seamlessly under one roof. Finding a partner focused on unification over channel siloes is critical for maximizing value.

“Legacy TV and digital video remain worlds apart operationally for many companies,” cautions Sean Muller, CEO of ad tech firm Alphonso. “Selecting platforms that bridge CTV and linear to enable genuine single marketing strategies is critical to avoid duplicating efforts and investments.”

With OTT adoption exploding, Muller emphasized that ad tech selection decisions will determine who thrives versus flounders amid viewing’s digital disruption. “Advanced TV capabilities must be robust across both digital and linear to succeed in today’s fragmented TV universe”.

The Bottom Line
In closing, the meteoric rise of over-the-top streaming requires reorienting both advertising and content strategies towards internet delivered video-centric customer experiences. With younger generations flocking to services like Netflix and Hulu, establishing connected TV and digital video capabilities now is an imperative.

“Streaming is only growing as a share of TV consumption, especially for hard-to-reach younger audiences,” summarized Anindya Datta of PREMION. “Marketers and publishers must both follow audiences to OTT and master advanced TV advertising to remain relevant.”

Already OTT advertising spending surpassed $1 billion in just the US last year underscoring the channel’s expanding centrality to video marketing strategies. As linear declined, streaming advertising expanded by over 40% in 2020.

With technologies now maturing to blend data, digital and TV buying seamlessly, media companies are investing heavily in advanced advertising capabilities to unlock new revenue streams. CTV advertising spend alone is projected to reach nearly $14 billion by 2024 as marketers chase engagement.

But successfully competing in this new consumption paradigm requires more than just diverting ad dollars from TV to streaming. Holistic strategies built on superior audience intelligence, impact measurement and omnichannel coordination are essential to optimize synergies between emerging and legacy video platforms.

In conclusion, advanced TV presents an unmissable opportunity for brands and media owners to thrive amid the meteoric rise of streaming viewership. But harnessing its full potential relies on implementing connected capabilities across paid, owned and earned channels. With strategic vision and ad tech partnerships, the stage is set for those seizing the streaming moment today to reap rewards tomorrow.

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