Lindsay Hamill
There’s no question that the COVID-19 pandemic has changed Americans’ habits. Streaming consumption across all devices is up more than 74% over last year, and a full quarter of time spent with the television is dedicated to streaming videos.
When it comes to the business model for these streaming services, contenders fall into two main categories — ad supported video and subscription video on demand (SVOD) — that you need to know about if you’re interested in reaching this vast audience. And beyond those distinctions, industry data during the pandemic is definitively showing users are spending significantly more time streaming ad-supported video vs. SVOD. Read on to learn the details and what this means for advertisers.
Ad-Supported Video vs. SVOD
Over the top (OTT) video is considered to be any media that’s accessed via the internet rather than traditional cable or satellite. So-called “cord-cutters” who have given up their cable TV subscriptions often turn to OTT viewing which is streamed online.
Subscription Video On Demand (SVOD) services such as Netflix, Hulu, and Amazon account for a good portion of streaming video. However, these aren’t the only options. A second segment of streaming video is growing rapidly. Ad-supported OTT video is an emerging contender for the attention of streaming viewers. Ad-supported video is free to access because revenue is generated through the advertisement.
The Perks of Ad-Supported Video
For viewers, one of the greatest benefits of ad-supported video is the affordability. In difficult financial times, the allure of free streaming video is undeniable. As people find themselves spending more time at home and possibly recovering from lost income during the pandemic, ad-supported video will be well-poised to provide free, engaging entertainment.
For businesses, the growth of ad-supported video provides a fresh opportunity to reach audiences at home. Including your advertising on these videos is a great way to connect with an engaged audience. The “Big 5” of SVOD services — Netflix, YouTube, Hulu, Amazon, and Disney+ — account for 77% of video streaming.
However, this still leaves 23% of viewership for “other” services, which mostly constitute ad-supported options. According to a recent report from Nielsen, “while the aggregate growth is notable and speaks to the overwhelming popularity of video streaming, the year-over-year growth in minutes watched outside of content from Netflix, Hulu, Amazon, Disney+ and YouTube was more than 57%, accounting for more than 12 billion minutes.” This represents a significant opportunity for advertisers seeking to position their brand to highly targeted audiences.
Personalized Support for Your Advertising Strategy
Ad-supported OTT video usage is poised to outpace SVOD providers, particularly at a time when viewers are looking for ways to manage their spending and cut entertainment costs. Media consumption is through the roof now as we see the manifestation of the pandemic’s effects.
The expert marketing team at Mediagistic can help you connect with your audience effectively through ad-supported video. Contact us now to learn more about how we can help you reach your target audience through streaming content.
Lindsay Hamill is a Senior Key Account Media Manager at Mediagistic. She specializes in helping clients plan and execute robust media campaigns, which includes helping to determine reach & frequency goals.
