The streaming world saw a huge shake-up recently when wunderkind and Hollywood favourite Bob Iger returned to helm Disney as CEO once again. His shock reappointment saw the CEO joining amid major competition arising in the OTT space, and the platform’s new embrace of ad-supported offerings.
Upon his return, Iger also shared that one of his top priorities was to make the company’s streaming business profitable. Known to be responsible for Disney’s launch of Disney+, he was quoted on Reuters as saying that instead of “chasing (subscribers) with aggressive marketing and aggressive spend on content, we have to start chasing profitability.”
Experts MARKETING-INTERACTIVE spoke to during his return said he has long been heralded as someone who understands the creative process while recognising the “business imperatives, urgencies, and opportunities”.
Some also noted that with Iger being a step ahead in the media and entertainment space, competitors such as Netflix are also likely to get a run for their money. Moreover, his entry comes at a time when the industry is grappling with the economics of video-streaming services.
Today, it is safe to say, consumers are living in a golden era of content. Spoilt for choices, consumers are also more open to having ads subsidise the cost of a subscription. Once thought of as an absolute no-go on OTT platforms, ad support has seen an increase in the OTT space today.
According to a study commissioned by The Trade Desk, currently 5.9 billion ad-supported OTT hours are already being watched in a month across Southeast Asia – led by Indonesia, then Vietnam and Thailand. This means that brands and advertisers can tap into more than 116 million viewers in Southeast Asia, a 10% increase compared with 2020.
An engaged audience by nature, these viewers are likely to be heavy users who consume more than four hours of OTT per day as they seek to relieve stress, satiate their curiosity for new knowledge, or simply to kill time.
How to best advertise on this evolving platform
While mobile has been the top way to access OTT in the region, today’s viewers are increasingly accessing OTT content via connected TV such as smart TVs and casting devices.
It is worth advertisers noting that smart TVs claim a third of all OTT viewing hours, roughly three billion hours. As of 2021, 71% of SEA OTT viewers use a smart TV which offers advertisers a unique way to target households.
The report by The Trade Desk also highlighted that advertising on OTT is particularly effective when combined with other channels. The combination of OTT with TV ads can further elevate the impact of a brand.
In one client campaign where “Brand I Trust” was a key metric, the combination of OTT with TV ads contributed to 42% of this KPI, in addition to the 32% impact by OTT alone.
But the medium shouldn’t be used in isolation.
In another case, 90% of campaign impact was driven by OTT in combination with different channels, showing a 114% increase compared with Kantar norms.
As such, brands should consider spending part of their linear TV advertising on OTT platforms. Leading brands are already designating part of their wider TV budget for OTT to employ test-and-learn approaches to find what works for them.
Additionally, using a new channel such as OTT can generate new data on audiences to help build clearer buyer personas and improve future campaign designs. This makes OTT ideal for marketers seeking to run more cost-efficient campaigns for reach, especially for brand impact KPIs.
In one case study, OTT is also seen to be second only to programmatic when driving brand impact, consistently outperforming TV, YouTube, and Facebook. OTT was at least 2.2x more cost-efficient than TV in driving reach. In some cases, OTT’s reach efficiency was also 1.5-1.8x more than Facebook and YouTube.
While overexposure is a valid concern given it often leads to ad fatigue, frequency capping can be an easy solution to this issue. OTT platforms can solve this by providing an estimated campaign performance at different ad exposure levels to help marketers make informed frequency capping decisions. As a guide, drop-off rates typically increase after five or six exposures.
One expert tip when advertising on these platforms is that shorter ad lengths often result in greater ad retention. A 15-second creative generally tends to perform better – despite the storytelling potential of longer ads. Longer ads need to be highly engaging to hold the attention of viewers.
Having shorter creatives will also work better with the primary audience of OTT content in the region, Gen Z and younger Millennials, who comprise 44% of the region’s viewers. This is set to continue as Gen Z and younger Millennial audiences are growing at more than double the rate of the overall OTT viewers in the region, said The Trade Desk.
Interestingly, women are also big consumers of OTT content and they are likely to use ad-supported platforms. Growth rates for Gen Z, younger Millennials, and women with children below the age of 16 (mums), are currently at 10%, 21%, and 15% respectively.
Advertiser benefits of OTT
Overall, OTT’s average contribution to brand recognition is high, and it consistently outperformed many platforms when used right, said the report by The Trade Desk. Especially in today’s context of ad-cluttered channels, OTT is an effective way to cut through the noise.
In a study of a recent campaign that used channels, including traditional TV, YouTube, Facebook, and TikTok, OTT was the only touch-point to deliver impact throughout the funnel, despite being the third lowest in spend. This is enabled by consumer perception that OTT is less intrusive and more engaging compared with other channels.
Overall, OTT also enables brands to build brand trust and bring customers from awareness to consideration. In this golden age of content, brands must embrace creative storytelling in a measurable manner – which makes OTT a great choice for success.
This article was created in collaboration with The Trade Desk. To find out more about how you can make OTT advertising work for your brand, download the full white paper here.