What the Consumer Shift to Streaming Video Means for Advertisers

By Guest Comment

What device are you reading this on? A laptop, a smartphone, a tablet or something else?

Similarly, when it comes to streaming video these days, including full-blown HD content, you’re not locked into a particular device or delivery method. In fact, many viewers have completely cut their cable cord—or taken down the satellite dish—and are watching their favorite shows via streaming services, some affiliated with traditional networks, others independent. As Over The Top (OTT) services grow, you might be wondering what these changing viewing habits mean for advertisers.

We took a look at how and why consumers are flocking to OTT services, plus the ad formats they prefer. Our latest study signals a sea change in video consumption, but one in which advertisers can adapt and thrive. When it comes to consumers embracing OTT services, we found:

  • More than one-third of respondents don’t have a traditional cable TV provider or have reduced their reliance on one.
  • 16 percent plan to cut or reduce their cable/satellite service in the next six months, mainly due to the high costs.
  • On average, 77 percent of OTT consumers subscribe to more than one service.

But OTT marketers that want to reach these consumers are raising a natural question: how receptive are they to ads and what works best? With rising competition, OTT brands need to not just attract new users, but keep subscribers coming back to watch more content. Yahoo and Tumblr users watch an average 10 hours of OTT video programming a week, and they’re open to ads from OTT brands. When asked what type of ads they wanted to see, native ads were the most popular response, followed by video ads.

This spells big opportunities for OTT marketers to continue to:

  • Build awareness levels and get consumers to subscribe: Consumers have a lot of choices, so OTT brands still need to focus on building recognition and differentiating their offerings. More importantly, only 17 percent of consumers are using TV everywhere apps, cable apps and TV network sites to watch entertainment content.
  • Promote shows, movies and special offers: Marketers need to appeal to OTT video consumers by focusing on what motivates them to subscribe. Namely, their favorite TV shows, movies and free trials. 84 percent of respondents said that TV shows and movies influenced their decision to choose an OTT video streaming service. And nearly one-third cited free trials as a reason to sign-up. Sophisticated targeting capabilities and the right data partners are critical to properly segmenting your audiences and engaging them with the right show or movie message. Coupling the right message with a special offer gives marketers the opportunity to optimize the consumer’s ad experience.
  • Tap into effective ads: Consumers said they would rather see native and video ads the most when it comes to OTT marketing. Respondents were nearly 7 times more likely to sign up for an OTT video streaming service based on searching online or seeing an ad online, compared to viewing a TV ad. Clearly, leveraging the right digital marketing tactics are key to matching the OTT consumer’s preference.

As consumers continue to adopt OTT services, brands have an opportunity to connect with them through the experiences they want most and capitalize on this growing market.

Sean Galligan, the author of this post, is vp & Industry Lead, Entertainment at Yahoo

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