A Look at OTT Media and the Crowded Streaming Market
In this ever-evolving world of instant gratification, we can be transported at the wave of a remote or tap of an app a million miles from our everyday lives to Westeros, or closer to home by live-streaming our football team’s latest fixture. Over the past few years, over-the-top (OTT) platforms have exploded into our lives; offering us the latest shows, live sports and binge-worthy entertainment at the click of a button. At the heart of this tidal wave of on-demand streaming platforms is irresistible original content available at a compelling, affordable package all delivered in an instant. However, this rapid and continuing emergence of new platforms has given rise to an increasingly crowded streaming market — one that is growing bigger and yet undoubtedly more intricate by the day.
Sitting on both sides of the fence, both as a marketer and as a sports fan/passionate binge-watcher, I find myself frustrated and excited in equal measure by the opportunity that’s presenting itself to our industry. But first, some stats:
According to eMarketer, the number of adults who will cancel a pay-TV service is projected to rise to 39.3 million this year and rise to 55.1 million by 2020.
A study by IAB in October showed that 73% of OTT viewers say they watch ad-supported OTT.
So we’re safe to say this cord-cutting trend is looking like it’s set to continue. But as it stands, despite OTT accounting for approximately 30% of TV viewing so far, it has only captured 3% of TV ad budgets. Why doesn’t this match up? Firstly, despite hoovering up rights for premium content distribution from an advertising perspective, these platforms are still very much in their infancy when it comes to testing their ad models.
From experience, these platforms are vying for brands to add OTT to their media plans but the scale, measurement, and gaps in ad delivery infrastructure, as well as reliable, skilled resource, have all presented teething issues. On the agency side, there’s been sluggish adoption due to a lack of overall understanding of where OTT should sit in an advertising ecosystem, frequently overlapping channel remits. Largely speaking, it’s treated as a digital activation; but given the volume of options in this space, it can also easily fall under the extension of a TV buy. Herein lies the problem, OTT is not yet seen as a self-contained ad solution with its own unique requirements. We urgently need to bridge this gap, as to any good marketer the advantages are abundantly clear:
Viewability: The platforms are full of rich content that’s consumed in a lean-back and fully engaged environment. Ad formats are often full screen and un-skippable.
Audience: These platforms have deep insight into their audience, their content consumption, and viewing behaviours.
Sequential storytelling: Given the platforms are logged in environments advertisers have the opportunity to plan and nurture a narrative with their audience.
Transparency: Given the closed ecosystem they can also be fully transparent by providing exposure into reporting to truly measure the level of success of your campaigns.
There is however an underlying challenge facing the industry and one that is growing more and more complex every day and that is the continued fragmentation driven by fierce competition and extremely deep pockets. Take the Premier League here in the UK for example — The EPL sold its latest three-season rights packages running from mid-2019 for a total in excess of £4.73 billion ($6.31 billion).
Deals such as this have seen these rights split across multiple platforms. Whereas a decade ago you could be a die-hard fan with a single Sky Sports subscription, but in today’s new market you would need five different accounts just to have access to the full season of fixtures with the likes of Amazon Prime, DAZN, Eleven Sports all disrupting the linear TV pattern by aggressively securing rights to select games. It remains to be seen whether all the current spending on content is sustainable and I suspect some won’t go the distance. More recently on the entertainment side, there has been a trend emerging for large content powerhouses such as Disney reigning back their content to focus distribution across newly-owned channels in an effort to build their own direct-to-consumer services and bolster their bottom lines.
Given all of the above, there is undeniably an opportunity for savvy marketers to be the early bird as this transformation continues to unravel, but it’s not without its challenges. So, what can we do?
Respect the environment: Audiences are more aware than ever about the power of their data and targeted advertising. If you’re going to disturb their precious sofa-time with a pre- or mid-roll ad, you’d better make it worthwhile. Be relevant, think about the creative, and make use of this full-screen, 100% viewable moment when your audience is highly engaged.
Consider the context: OTT platforms are now accessed anywhere and everywhere, across devices – be it on a commute, at airport gates, or at home in multiple rooms. This context needs to be considered at all points when planning your campaign.
Audience-led planning: Make use of the content schedules and targeting to position and present your brand in the best possible light. Don’t be lazy — given the huge range of content on offer, it presents the opportunity to target scaled or niche interests or both.
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As an agency, PMG has adapted to recognise the opportunity in front of us by strategically partnering with the leading OTT platforms and helping our clients reach a highly-engaged audience. Continuing to rethink the way this new consumer behaviour is integrated into our client’s workflows and the creative processes. Equally, we are working with the OTT’s themselves to help establish their ad platforms through constantly delivering feedback and interrogating the success of our campaigns. This partnership approach will be the key to our success in this growing, albeit complex and exciting space.