With OTT Growth, Services Innovate Ad Inventory
It’s no secret that usage of over the top (OTT) television services are one of the fastest growing media channels. With the pending launches of Disney+, WarnerMedia’s streaming service, and Apple TV Plus, the so-called streaming wars have really heated up.
At the same time, while OTT viewing has capture approximately 15 percent of all TV viewing, it’s only capturing 3 percent of TV ad budgets. That might not be surprising, given that ad inventory on some providers is somewhat scarce.
But now that both audiences and number of services are growing, some providers are finding innovative ways to deliver ads. But these aren’t just ordinary 15 or 30 second TV spots. For example, Hulu seems to be leading the pack with a number of unique ways to not only deliver ads but have viewers engage with them. That includes allowing users to choose which ads they see and provide other feedback on ads, but also it includes direct movie ticket sales, and ads that are shown only when the viewer pauses the video. Other ad delivery systems combine a short trivia quiz or other quick interactive elements.
What’s more, because it’s digital, all these ads can be highly targeted. The goal is not only providing more relevant advertising, but also delivering them in ways that feel comfortable to the viewer. And so far, it seems that these innovative ad units have been successful, if limited in their deployment. Hulu, the second largest OTT service after Netflix, reached $1.8 billion in revenue last year, partially based on advertising.
To be sure, many of these OTT services rely on ad-free subscription models (or, in Hulu’s case, a sort of hybrid version where users can pay less for an ad-supported subscription). However, it’s likely that ad-free platforms will gather and sell anonymous user data over time. But as providers continue to experiment with—and profit from—innovative ad units, some of these providers might look to introduce additional interesting ways for brands to reach and interact with consumers.
So say goodbye to disruptive advertising and say hello to actual brand engagement.