BY Rachel Cagle
Are consumers still watching traditional TV anymore? It seems like streaming services have taken over viewers’ TV screens. So, should your client focus their efforts on OTT video advertising? Traditional TV ads? Both? Let’s discuss.
Is OTT Video Advertising Better than Traditional TV?
OTT vs. CTV
Before we begin, let’s clear up any potential misunderstandings about OTT and CTV. They’re not the same, but they are connected. According to a previous SalesFuel blog based on research from Innovid:
- “OTT refers to the delivery mechanism for video content, where the content is delivered ‘over the top’ instead of through a cable or satellite connection
- CTV is actually a subset of OTT, and it refers to the device on which you’re accessing that video content. It combines the delivery mechanism with the viewing experience – on the biggest screen in the home”
“In short, if you watch Hulu on your mobile device, then you’re streaming OTT content. If, however, you watch Hulu through a Roku Stick that’s plugged into your television, then you’re streaming OTT content over CTV.”
Got it? Okay, now let’s talk OTT video advertising.
The State of Traditional TV Ads
The Good
There are still plenty of consumers of all ages watching traditional TV, but the demographics tend to skew older. About 57% of baby boomers have a monthly cable or satellite TV subscription. Only 35% of Gen Zers can say the same.
Additionally, consumers still watch more linear TV than OTT. However, during months where there aren’t major sporting events or other programming that consumers typically watch on linear TV, it’s not winning over OTT hours by much. But that means that consumers watch the same amount of OTT and traditional TV on traditional TV’s worse viewership days.
The Not So Good
OTT video advertising succeeds where traditional TV ads fail. According to MediaPost, about 50% of the consumers who watch the most linear TV saw 92% of TV ad impressions while the other half only saw 8% of them. That difference means that half saw over 150 ads per day while the other half only saw 14.
That’s not a healthy mix. While the half that saw few commercials are probably more happy with that amount, they may be missing out on brand information that they’d find useful. And the other half… well, you wouldn’t be happy to have 150+ commercials forced on you in a single day, right?
Also, MediaPost points out that, “62% of viewers say that it takes only two to five repeated viewings of the same ad in a month-long period to worsen their perception of a brand.”
The State of OTT
The Good
According to a previous SalesFuel blog based on data from BIA Advisory Services, 43% of consumers get the majority of their TV programming from OTT/streaming services. Consumers enjoy being able to watch whatever they want whenever they want.
Brands also love utilizing OTT ads for their many benefits. According to another SalesFuel blog based on information from Premion, these benefits include:
- “The flexibility and control needed to customize campaigns around locations, events or promotions: 71% of advertisers agree
- An ability to target in ways not possible with linear TV: 68%
- Precision audience targeting: 40%
- Extended reach for linear TV campaigns: 39%
- Capture declining TV audiences: 38%
- Achieving brand awareness and performance marketing goals: 38%
- An affordable TV option for performance-driven digital marketers: 30%"
MediaPost says that about 96 million U.S. households are watching OTT content, providing a wide ranging audience for OTT video advertising.
The Not so Good
One of the main benefits of streaming services when they first came out was that consumers could watch what they want, when they want and for a lower price than cable. That’s steadily not becoming the case.
According to The Wall Street Journal, the prices of many major streaming services continue to climb. Since their origins, Hulu, Max, Netflix, Disney+, Peacock, Paramount, and Apple TV+ have all raised their prices. And since many consumers have accounts with numerous streaming services, those costs could get to be too much. Cable might not seem like such a bad option if costs continue to rise.
Conclusion
The point is, both OTT video advertising and traditional TV ads have their benefits. They work best together so that your client can target all viewers, no matter how they're tuning in.
Want to know how your client’s target audience is getting their TV? Check out their profile on AudienceSCAN on AdMall by SalesFuel.
Photo by sq lim