Every advertising campaign is crucial since it can drive traffic, generate leads, and earn conversions. TV viewership used to be the highest source of exposure for marketing. However, for the last few decades, there has been a decline in TV viewership.
The main contributing factor is the internet. Insider intelligence has reported that 44% of viewers claimed that online streaming has caused them to watch less TV. Now that 69% of the global population has internet access, it continues changing the media landscape as online streaming platforms persist, bypassing the TV market.
The popularity of online streaming platforms has given many brands an alternative marketing channel to showcase their business, products, and services through OTT advertising. Before going into detail about OTT ads, let us first discuss what it is and why it has been gaining so much attention from several brands worldwide.
What Does OTT Stand For In Advertising?
The OTT’s meaning is over the top advertising. They are like a TV commercial, but the video will get streamed on OTT services/platforms like HBO Max, Netflix, and Disney Plus, which all bypass the cable, broadcast, and satellite TV channels.
Since online streaming platforms are accessible online, viewers can watch films and series anywhere and anytime on various devices such as tablets, smartphones, laptops and smart TVs. Those who want to watch via online streaming platforms need to sign up and subscribe to one of the streaming plans they offer.
OTT ads are new and usually shorter than traditional TV ads. Viewers will have a 90-second or two-minute ad break, and they can see a countdown clock on the video, informing them when the OTT ads will end.
For example, in this full movie uploaded by a verified film studio channel, there are two 15-second ads in the beginning, middle, or end of the full movie.
An ad break on HBO Max showing the remaining seconds of the ad.
Image retrieved from AdWeek’s article titled We Spent a Day Watching HBO Max With Ads—and Here’s What We Found
Comparison of OTT Platforms
Although Netflix was founded in 1997, the company began its streaming services in 2007. Netflix first launched its OTT service in 12 countries with 1000 titles, and over the years, Netflix started making original films and shows in 2012.
Netflix’s viewerships continue to grow as it expands to several countries worldwide. On 13 July 2022, Netflix announced a partnership with Microsoft and appointed it as a new partner that will help them launch OTT ads on ad-supported streaming subscription plans.
Like HBO Max, Netflix has announced that they viewers will have the option to subscribe to Netflix Basic with Ads plan at USD$6.99 per month. With the ad-supported subscription plan at a lower cost to subscribe and watch shows streamed on their platform starting 3 November 2022. The Netflix Basic with Ads plan will be available in 12 countries: Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, the UK and the US.
Netflix ads that are 15 to 30-second long will appear before and after a show or film. Advertisers can target when and where their ads will appear across the platform.
Netflix is also planning to sell 4-minute of OTT advertising to companies per hour.
While Netflix has not rolled out the ad-supported streaming subscription yet in Singapore, Reuters reported that Netflix is expecting to capture the attention of 40 million users worldwide by the third quarter of 2023.
Disney may have jumped on the bandwagon of OTT services later than HBO and Netflix when Disney announced it would have an online streaming platform called Disney Plus, but it proves that its branding had reached far beyond.
According to Statista, Disney+ now has 164.2 million subscribers compared to Netflix, which exceeds its initial goal of reaching 90 million users by 2024.
But despite unlocking a milestone, Disney Plus is eyeing to unlock another as they will release an ad-supported streaming subscription on 8 December 2022, which will cost $7.99 per month.
Like Netflix, Disney Plus also plans to keep the duration of OTT ads to 4-minute per hour, and they plan not to run an advertising campaign on kids’ profiles.
Before HBO embraced OTT services, it had been a TV programme since the 1960s that made several movies, documentaries, and more. HBO finally entered the online streaming world in 2010 with HBO Go and in 2015 with HBO Now after serving as a premium cable channel until the latter officially dissolved in 2021.
In 2020, HBO Max (which is not yet accessible in Singapore) replaced HBO Go and HBO Now as the primary streaming services; however, HBO Go is still available in select countries, including in Asia.. HBO Max delivers more shows from HBO, Cartoon Network, Warner Bros., Adult Swim, and many more than the prior OTT services or platforms.
To attract more viewers to watch films and shows on HBO Max, it introduced a much cheaper streaming subscription plan—ad-supported in June 2021, which costs $9.99 per month. When rounded off and compared to HBO Max’s regular streaming subscription plan of $14.99, ad-supported is $5 more affordable.
For those who are interested in subscribing to the ad-supported streaming subscription, here is a summary comparison of their pricing, along with their starting date.
|Ad-Supported Plan||$9.99 / month||$6.99 / month||$7.99 / month|
|Starting Date||June 2021||3 November 2022||8 December 2022|
Why Do Brands Advertise On OTT Services/Platforms?
The internet has revolutionised practically every aspect of human life, and its use is now not only for communication but also for amusement. As more people sign up for OTT services and platforms, brands have thought that releasing their advertising campaign here will be a terrific opportunity to raise brand awareness.
Below are some of the benefits for brands advertising on OTT services.
1. Reach Greater And Wider Audiences
Instead of watching primetime broadcasts on TV channels, many viewers, especially young audiences, prefer to stream their favourite films and shows on mobile devices. Viewership keeps growing because it is no longer restricted to a certain time period to a specific location. For example, the series Bridgerton can generate an impression and reach many audiences because it is now shown in a particular time slot (8 pm to 9 pm) like on mainstream TV.
OTT services/platforms are comparable to a gold mine for marketing and advertising professionals. Releasing an advertising campaign on ad-supported streaming subscriptions can help them reach mass audiences.
Retrieved the image of Global Smart TV Household Penetration by Region from Broadband TV News
Studies show that over 51% of households worldwide will own a smart TV by 2026, which is why it is not surprising that the OTT viewerships will further increase in years to come. This figure will give marketing and advertising professionals more opportunities to promote products and services to their target audience.
2. Gain Viewers’ Powerful Micro Data Insight
Like Google Ads, many brands can gain powerful data insight on their OTT ads. After all, they will not only know what type of watching the films or shows but they can also grasp their watching behaviour.
Knowing the watching behaviour of viewers enables business owners to create OTT ads and release these at the right time. For example, if a viewer watches romance films or shows more at night, a brand can display romance-themed OTT ads to inform and entice the said viewer with what they offer.
3. Offer Real-Time Report
One of the benefits of OTT advertising is it offers brands real-time reports of their OTT ads. Brands that will opt for OTT ads will no longer have to wonder if the viewers have seen their advertising campaign again.
In most cases, they use pixel-based tracking that can help brands determine where the viewers went after clicking on the OTT ads, how long they stayed on the brand’s website, and other actions they have done.
4. Programmatic Targeting with Engaging Ads
What makes OTT ads far better than TV ads is that the latter has more relevant and engaging ads. For example, OTT platforms being developed on web infrastructure, OTT ads can add links that can direct the users and OTT audience to your business’ brand websites or the website page of a specific product.
Meanwhile, programmatic OTT advertising is an ad-targeting solution that helps brands to reach the right audience with the appropriate content. It is the customised and automated process of trading ad spaces between advertisers and publishers. It is real-time bidding on streaming platforms and connected TVs.
Advertisers target their viewers based on their behaviour on the app, such as the content’s genre and language they are watching. For example, if the users have been watching kid shows and animated movies, baby and children’s products are likely to appear.
This feature is perfect for instigating consumer action since they can easily see, research, and browse products.
Furthermore, some OTT ads allow users to take quick surveys without exiting the streaming platforms. The data gathered can be used in targeted OTT marketing later on.
5. No Ad Waste
People have found ways to indirectly avoid TV ads. For example, during a commercial break, people will switch channels to watch other shows and return when the commercial break is over.
In addition, TV ads are not as targeted precisely in a microscopic and personalised way, unlike OTT ads. There is a high chance that brands are placing TV ads at the wrong audience and time slots.
All of these result in ad waste. OTT platform marketing is superior because it is not as wasteful as TV ads. For instance, many OTT advertising platforms use unskippable ads. Exiting an unskippable ad means losing your spot on the show. Viewers are unable to fast-forward the ads, either.
OTT Statistics That You Must Know
In the US, streaming platforms surpassed TV and cable for viewership shares in the second quarter of 2022, according to Nielsen.
Streaming platforms got 34.8% viewership, while cable was in a close second spot with 34.4%. On the other hand, the TV broadcast was in third place with 21.6%, while the remaining 9.2% accounted for other platforms.
The average time US OTT users spend on OTT streaming platforms is 70 minutes per day.
Top OTT Video
Streaming Platforms In The World
|OTT Platform / Service||Number of Paid Subscribers Worldwide (2020 - 2022)|
The top OTT streaming platforms in the world:
- Netflix – 223 million paying subscribers
- Amazon Prime – 200 million paying subscribers
- Disney+ – 164 million paying subscribers
- YouTube – 80 million paying subscribers
- HBO Max – 76 million paying subscribers
- Hulu – 42 million paying subscribers
Meanwhile, according to Statista, global OTT users across all platforms are expected to reach 3.93 billion by 2026.
According to the SPotX report in 2021, the top markets for OTT viewing in the Asia-Pacific region were Singapore, Indonesia, and Australia. However, in the following years, OTT advertising trends seem to favour the Philippines, Indonesia, and Australia in terms of consumption.
In the same report, 35% of OTT viewers made a purchase after seeing the ad on an OTT platform. Most of them came from Vietnam, Singapore, and Indonesia.
|OTT Platform / Service||Number of Paid Subscribers Worldwide (2020 - 2022)||In-App Revenue||Number of App Downloads||Most streamed channel /content|
|80||USD 28.8 B||5 Billion||MrBeast (Extreme stunts and challenges channel)|
|223||USD 24.9 B||18.6 Million||The Office (TV series)|
|200||USD 5.16 B||12.5 Million||Reacher (TV Series)|
|164||USD 7.4 B||15.6 Million||The Mandalorian (TV Series)|
|76||USD 526 M||6.69 Million||Euphoria (TV Series)|
Here are YouTube’s key statistics from the Business of Apps report:
- More than two billion people globally use YouTube a month.
- In 2021, YouTube generated USD 28.8 B in revenue.
- YouTube Premium has more than 80 million subscribers.
- YouTube has been downloaded more than 5 billion times, including the pre-installed app on Android devices.
- YouTube channel Mr Beast is the top channel on the OTT streaming platform in terms of revenue, generating USD 54 million in 2021.
Here are Netflix’s key statistics from the Business of Apps report:
- There are more than 223 million Netflix subscribers worldwide.
- In 2020, Netflix generated USD 24.9 B in revenue.
- Netflix has been downloaded more than 18.6 million times.
- The median age of Netflix users is between 35-44 years old.
- The Office is the most streamed content on Netflix, garnering 57.1 billion minutes of streams.
Here are Amazon’s key statistics from the Business of Apps report:
- There were more than 200 million Amazon Prime Video subscribers worldwide in 2021.
- In 2022, Amazon Prime Video generated USD 5.16 B in revenue.
- Amazon Prime Video surpasses Netflix in terms of the content library with 26,300 movies and 2,700 TV shows.
- Amazon Prime Video was downloaded more than 12.5 million times.
- Reacher is the most streamed content on Amazon Prime Video, garnering 5.76 billion minutes of streams.
Here are Disney+’s key statistics from the Business of Apps report:
- There were more than 164 million Disney+ subscribers worldwide in 2022.
- In 2022, Disney+ generated USD 7.4 B in revenue.
- Disney+ was downloaded more than 15.6 million times.
- The Mandalorian is the most streamed content on the OTT platform with 8.38 billion minutes of streams.
Here are HBO Max’s key statistics from the Business of Apps report:
- There were more than 76 million HBO Max subscribers worldwide in 2022.
- In 2021, HBO Max generated USD 526 million in revenue.
- HBO Max was downloaded 6.69 million times.
- Game of Thrones is the most watched content on HBO Max, followed by Euphoria.
Businesses must consider these key statistics, including the OTT viewership and the number of downloads, when deciding which OTT platform they should invest in.
How Does OTT Advertising Target Users?
In behavioural targeting, OTT ads base their strategies on the behaviour and activity of the user on the OTT platform. They consider the user’s searches and what movies or shows they tend to read the synopsis. The data helps advertisers come up with ads that will reach an audience based on their search activities.
Meanwhile, contextual targeting happens after the user has consumed the content on the streaming platform. Advertisers base their OTT advertising strategy on the context of the content the user has consumed.
For example, if the user has watched a cooking show, advertisers will then target them with ads promoting products related to cooking, such as pans and kitchenware.
Geolocation targeting uses information about the user’s possible location when displaying ads. Local brands mostly use this strategy as it minimises the number of wasted ad impressions.
For example, a local cake shop can target users within a five-kilometre radius of the shop. With accuracy, this strategy maximises local brand awareness.
Demographic targeting bases its OTT advertising & marketing strategies on the user’s basic information, such as age, gender, ethnicity, income, education level, and so on.
For example, if a user is a teenager, personalised content and ads like cool shirts, gaming consoles, and makeup, may appear while streaming. If the user is a mother, ads about home products are expected.
Examples Of OTT Campaigns
Image retrieved from a Glossy article titled Louis Vuitton and Tiffany & Co. are embracing Netflix’s new ad-supported tier
Louis Vuitton is among the first brands that run a campaign on Netflix in 2022. In the picture below, you can see the short ad appeared while streaming the show Gilmore Girls.
Image retrieved from a Glossy article titled Louis Vuitton and Tiffany & Co. are embracing Netflix’s new ad-supported tier
Tiffany & Co.
Another brand appearing on ad-based Netflix subscription is Tiffany & Co. Similar to Louis Vuitton, it appeared on the show Gilmore Girls.
Image retrieved from a TechCrunch+ article titled ‘Hulu announces a new ad unit that appears when you pause’
Meanwhile, Charmin, a toilet paper brand from Procter and Gamble, ran a Paused Ad or translucent banner on the OTT platform Hulu.
7 OTT Advertising Best Practices
1. Set Up A Website
Besides social media platforms, a website is the first thing people want to see to learn more about a business’s products and services. According to Forbes, a website has a massive impact on a business’s success since people are less likely to doubt its legitimacy.
2. Get To Know The Target Audience
It is challenging to produce OTT ads to deploy on OTT services/platforms if you are unsure of who your target audience is. If you attempt to create an advertising campaign from scratch and with no data, you will have a lower chance of success.
To get to know your target audience, you better start doing market research. The gathered data will help you understand who they are, what they do, and their interests.
3. Add Push Notification Button For First Time Users
Another OTT advertising best practice you should adopt is to add push notification buttons for first-time users. By asking brand-new users to allow push notifications, you can run customised, targeted campaigns that promote more relevant OTT ads, and you will eventually convince consumers to take action.
4. Incorporate TV-To-Mobile Elements
Most people nowadays own more than one digital device. Some use their laptop to binge-watch their favourite shows while using their smartphones. Take note of how different devices’ functions and incorporate TV-to-mobile elements into your OTT ads, like QR codes.
With QR codes on your OTT ads, viewers can scan these and lead them to the promotion you offer or nudge them to install your mobile application to check out your products or services.
5. Engage Users Within The First Three Seconds
For the past few years, the human attention span has grown shorter. Even though people nowadays love to watch videos, they find online ads bothersome. If you do not capture their interests in the first three seconds, viewers might not pay attention to your OTT ads.
6. Use A Simple But Strong CTA
Like in other digital marketing campaigns, a simple but strong call-to-action (CTA) can go a long way. It can nudge the viewers to ‘come and check this out’ kind of feeling as they watch the OTT ads until the end.
Here are some simple but strong CTA you can use for your OTT ads.
7. Format Your Ads For Multiple Devices
Since almost everyone owns more than one digital device, you can expect OTT viewers to watch films and shows on different devices, depending on their mood. Considering that possibility, you should format your OTT ads for multiple devices so these will not look distorted when the viewers watch them on bigger or smaller screens.
The Future of OTT Advertising
OTT streaming platforms are expected to grow in the future. Given that the cost of smartphones is becoming more and more available in the market and OTT platforms are going for a mobile-first strategy, it is anticipated that most traffic will be from mobile users.
Advertisers must also consider several brands combining into the OTT platform. One of the prime examples is Disney+. Besides its known affiliates, Marvel and Pixar, users can also watch content from National Geographic, ESPN, and 20th Century Fox movies on Disney+ platform.
OTT advertising & marketing will be one of the must-have marketing tactics in 2023. Partnering with a digital marketing agency that specialises in content creation and creatives for ads, especially in video formats on multiple platforms will give your brand an advantage.
Contact OOm at +65 6690 4049 or leave a message on our website if you want to learn more about OTT ads or need help creating custom OTT ads for your preferred OTT services/platforms.