The OTT Reality Check
- 1. Over-The-Top’s popularity is rapidly increasing with both consumers and advertisers. Here’s everything you need to know. THE OTT REALITY CHECK Over the Top (OTT) is audio and video content that is distributed over the Internet without a traditional TV provider.
- 2. OTT IS NOW MAINSTREAM Consumers regularly watch video through OTT, whether streaming video across devices or accessing their Connected TVs. 42%of people prefer to watch TV shows online Source: AOL Mega-Audience II, Fall 2015
- 3. OTT VIEWING HAPPENING ACROSS SCREENS + OFTEN Devices used to watch OTT by OTT Users Access OTT once a week or more 65% 59% 41% 35% 13% 89% 88% 83% 85% 83% Laptop Smartphone Tablet Connected TV Gaming Console Source: AOL and Advertiser Perceptions Monthly Omnibus Study, February 2016
- 4. BUT PAY TV ISN’T DEAD... YET 11%have discontinued paid TV service to watch TV over internet exclusively 13%say they are likely to discontinue paid TV service to watch TV over internet exclusively over the next 6 months Forrester, 2016 Source: Forrester, North American Consumer Technographics Online Benchmark Survey (Part 2), 2015
- 5. ADVERTISERS ARE ADAPTING as many advertisers are planning to spend on OTT in 2016 from 2015. The amount they spend also increases each year Source: AOL "2015 State of the Video Industry,” October 2015 Digital advertising budget allocated to OTT/Connected TV 18% 17% 16% 201620152014
- 6. PROS + CONS As an emerging medium, advertising on OTT comes with both benefits and challenges. Here are key points we heard from advertisers. TOP 5 BENEFITS 42% 41% 32% 31% 23% Reaching incremental audiences (i.e. cord cutters) Extending the brand story across screens No ability to skip ads Catching up to consumer consumption trends / gaining relevancy Gaining more consumer-level data TOP 5 CHALLENGES 35% 30% 29% 28% 28% Lack of measurement Small scale audience penetration Lack of standardization Price Lack of targeting capabilities Source: AOL and Advertiser Perceptions Monthly Omnibus Study, October 2015
- 7. THE FUTURE IS CONVERGENCE As the space evolves, advertisers see consolidation across channels on the horizon. 53%of advertisers agree that TV, online video, and OTT should be combined into one overall video budget Source: AOL and Advertiser Perceptions Monthly Omnibus Study, October 2015