According to the 2019 Customer OTT Report, 61% of Americans own a smart TV. The report also notes that 52% of Americans use some type of OTT service, including Netflix, Amazon Video, Hulu, and more. OTT services, or over-the-top television, have become increasingly important to many consumers, who like the convenience of choosing what they want to watch and when they want to watch it. So what exactly is OTT and how will it affect your business? Let’s discuss the benefits.
What is OTT?
OTT, or over-the-top television, is streaming content offered directly through the internet. Unlike cable, which restricts viewers to the specific programming available at any given time, OTT allows users to choose exactly the content they want to see and when they want to see it. OTT encompasses platforms like Netflix, Amazon Video, Hulu, iTunes, HBO Now, and other popular services that viewers can choose to access video content. Most often, users choose to use these platforms to stream television shows and movies. Sports games and other live programming, however, are steadily growing in popularity on many streaming services as well. Viewers enjoy the convenience of pausing their shows, choosing exactly what they want to watch, and moving easily from one device to another.
Why is OTT Important in Today's Market?
While traditional marketing and TV advertising are still important, more people are using OTT media services because of the convenience it provides them. The average household now subscribes to an average of three streaming services. In OTT-enabled homes, households spend an average of 19% of their time utilizing streaming services. Consumers are also willing to pay for their services and are prepared to spend up to $100 per month on as many as 15 distinct providers in order to access the content they want.
Simply put, consumers want the content they want to watch and precisely when they want to watch it. They're looking for a high-quality service, both in terms of the actual content delivered by that platform and in terms of the ads they see when using it. Viewers will quickly abandon a product or service when the quality isn't on par with their expectations. When it comes to OTT, consumers have clear expectations, and they aren't afraid to change services or give up on them when they don't meet their needs. Seventy-two percent of users, according to the 2019 Consumer OTT report, understand that there's a tradeoff between what they pay for content and the ads they see. As many as 29% would accept more ads in order to get a lower cost for their services.
In order to get consumers to respond to those ads, however, you have to create a seamless advertising experience. Consumers prefer a personalized, tailored ad experience. Not only that, but they’re also more likely to respond to content that doesn't seem too "in their face." They want content that flows with the overall experience and directly relates to them. Luckily, OTT delivers on that need. OTT media services are naturally less likely to interrupt the customer’s viewing experience. Launching OTT and television ads at the same time can increase ad recall by as much as 34%. Many advertisers are jumping in to take advantage of continuing OTT success. By 2023, OTT revenue could top $47.8 billion across the United States.
How it Can Affect Your Business
OTT creates more touchpoints with consumers. Most consumers need multiple touchpoints before they will choose to partner with your business, and OTT provides a great chance to get your business in front of them. It also offers the chance to reach more people overall. OTT services are often present in households that do not have cable television. This means that you are giving your business another chance to be seen by those who would otherwise miss your TV commercials.
OTT also makes it easier for consumers to take action on ads. Often, consumers watch OTT content directly from their devices and connect to streaming services on smart TVs that will allow them to take action on the spot. This can prevent them from forgetting about your ad before they have a chance to take action on it.
Finally, OTT advertising allows you to highly target your preferred audience. OTT ads can be targeted to go in front of viewers who engage with specific types of content. When you understand your target audience, you can use that targeting to ensure that they are the ones who see your ads. As a result, you'll be more likely to get the maximum benefit from your advertising dollars when you include OTT as part of your overall advertising strategy.
Over the past several years, OTT has become increasingly important for many businesses. If your business does not take advantage of OTT ads, you may miss out on the chance to connect with potential new customers. By working closely with a media partner, you can improve your reach and expand brand recognition for your business through the incorporation of OTT platforms.