My family has always been an avid follower of the cooking competition based TV show, Master Chef Australia. A few years ago, regardless of where we were, we had to be present at home at exactly 9PM or at the time of its rerun the next day. However, with the rise of OTT (Over-The-Top) platforms such as Netflix, Amazon Prime, Disney+ Hotstar and many others, we can watch anything and whenever we want without being governed by satellite TV’s fixed schedule. The mere convenience of these platforms has led to a complete shift in terms of how we view our favourite movies and TV shows.
With the pandemic forcing people to lock themselves at home, they have turned to movies/shows viewing as their biggest source of entertainment, further contributing to this shift in a huge way. Here are some key highlights to note:
- At the end of 2020 OTT platforms recorded almost 62 million subscriptions within India, which was almost twice the 32 million subscriptions that was recorded at the end of 2019.
- Disney+ Hotstar has emerged as the clear preference of the Indian people capturing 41% of the OTT market share. After Hotstar emerged as the official broadcaster of the Indian Premier League, their subscription base tripled from 8 million in April 2020 to 25 million in December 2020, which has been a major contribution to their acquired market share.
Consequently, the engagement on traditional platforms such as satellite TV has massively decreased, impacting many companies and advertisers. Let’s look at why these companies and advertisers should look to OTT platforms to place their ads.
Benefits of OTT advertising:
- Precise Targeting – TV networks sell their air time to advertisers. Any ad published by the advertiser is seen by everyone at that particular time whether it applies to them or not. This decreases the impact rate of the advertisement. OTT platforms however, can showcase unique ads to different viewers at the same time based on geography, purchasing behaviour and other various demographics such as age, gender and occupation, based on the data they generate from streaming. This means that the advertiser can reach their ideal customer with personalised ads without wasting their resources on a customer who wouldn’t be interested in your brand.
- Immediate Response – People are shown highly relevant and personalised ads on OTT platforms and if the viewer is interested, they can immediately interact directly with the brand. TV cannot expect results as quickly as this.
- Strategy Building – The advertiser can build strategies for their ad depending on whether they’re targeting conversions, clicks or views like it is in Google Ads. They can also further dabble in other strategies such as incremental reach, target competitors and managing frequency.
- Advanced Analytics – OTT platforms provide advertisers with data that TV networks are incapable of generating. Along with the data on the viewers, advertisers can also see how the ad is working for them. Advertisers can find out how many people clicked on the ad, how many skipped them and user engagement and can modify their ads or strategies accordingly.
- Advertisers can also choose to prohibit skipping their ad on OTT platforms.
What does the future look like for OTT advertising?
OTT is taking over the industry and in the near future, it will effectively replace traditional TV. As OTT viewership grows, so do the opportunities for advertisers and companies to advertise their brands directly to their intended target. In the US, which holds the world’s largest OTT market, the total ad spending number for OTT came in at $990 million. Increased growth is expected over the next few years, culminating in the $2.373 billion projected OTT ad spending in 2025. While India hasn’t quite hit those numbers yet, the OTT market is growing at an alarming rate.
The OTT market in India is predicted to grow at 21.8% CAGR from Rs 4,464 crore in 2018 to Rs. 11,976 crores in 2023, according to PwC’s Global Entertainment and Media Outlook 2019–2023.
According to data released by media research firm TAM, the ad insertions tripled with the onset of the COVID-19 pandemic from 11,000 ad insertions in February to 33,000 ad insertions in April last year. As of November 2020, the ad spend on OTT platforms in India stood at 22,000 crores. With Netflix taking a firm stand on their no ad policy, all these ads are to be found on Eros Now, Zee5, MX Player, Sony Liv, YuppTV, VOOT, Viu with Disney+ Hotstar recorded as their biggest benefactor.
If you are an advertiser concerned with the rapid decrease of traditional TV views, you should start to consider OTT platforms as your next adspace.