Netflix and Hulu started offering streaming packages in 2007. These were the first companies to offer video streaming. They charged a small fee for unlimited content viewing. This was the start of a revolution in the video viewing world. The streaming services have given users the ease to watch shows whenever they want and choose from a wide range of options, which are only a click away.
Not only did these new streaming services give people a lower-priced way to access videos, they also changed the way people watched TV. This evolution led to the creation of a space popularly called over-the-top (OTT). From video streaming to video on demand (VoD) platforms, the segment has grown to an industry in a short time. Globally, it is expected to grow at 16.7 per cent CAGR by 2025, according to Allied Market Research.
Netflix is set to remain the largest MENA subscription VoD platform with expected growth of 60 per cent by 2024. In the next two years, the top eight platforms in the MENA region are expected to be Netflix, Amazon Prime Video, Icflix, Starz Play, Iflix, Wavo, beIN Connect and Shahid Plus.
According to the Allied Market Research forecast, by 2024 Netflix will have 4.22 million subscribers, followed byStarz Play with 2.98 million subscribers, and then Shahid Plus with 1.81 million.
YouTube has also announced an investment of $100m for the creation of original children’s content, and Snapchat is investing in short, TV-style programmes users can watch via Snap’s Discover platform. With this growth, the OTT industry is becoming more fragmented. Just like on social media, users have a lot of choices to make in terms of accessibility, shows and fees, and therefore users will be subscribed to multiple platforms
HOW CAN ADVERTISERS LEVERAGE THE OTT SPACE TO WIN CAPTIVE ATTENTION?
As advertisers, we must understand the relationship between different streaming services and devices through which they are being accessed. Is YouTube streamed more using smartphones because users prefer viewing shorter duration content on the platform? Is Netflix replacing prime time with the coming of smart TVs, and therefore users prefer watching longer-duration content on the TV screen? Advertisers should empathise with users to understand their video-viewing behaviour, and hence be able to define their interests and preferences. This way advertisers will be able to target the right audience at the right time.
Once the audience is defined, the relevancy of the creatives can be increased, and personalisation of messaging will be done, thus making overall targeting more effective. Ad formats will also play a pivotal role in seeking audience attention. A long-form advertisement will only act as a roadblock and may force users to opt out of the OTT, while formats like in-stream and pre-rolls go well with the overall user experience and thus are likely to be used. This will in turn challenge brands and agencies to create personalised and relevant videos.
YouTube’s search and discovery ads have grown by 42 per cent in the last two years. Amazon Search has also grown by 13 per cent. Therefore, search and discovery ad formats can also be incorporated into the various OTT platforms. Brands are also collaborating with the shows by doing subtle integration without disturbing the viewing experience. One of the best examples is how Coca-Cola teamed up with Netflix’s Stranger Things to revive the New Coke. Such native brand messaging is just going to increase.
In my opinion, the biggest challenge facing advertisers is measuring effectiveness on OTT. As these platforms do not use cookies or device IDs, it becomes difficult to track and hence measure. Therefore, developing a third-party verification tool that can act as the single source of truth for all OTT platforms is important. Moat is a great example of how digital platforms have been integrated and independently measured. As it’s a third- party service, Moat gives advertisers additional oversight to validate the viewability metrics they see from advertising.
Marketers need to be able to prove that the right audience is watching their ads, and so be sure that the ads are having the right impact for the brands based on the goals they have set. Warner Media, Disney+ and HBO Max are launching soon, which will only make this space more competitive. I believe OTT will continue to expand and lead to an exciting place for advertisers to utilise and connect with the audience. This means advertisers will follow the audience and leverage the platforms that are ad-supported. OTT services will also move to an ad-supported model to captivate the audience at a scale that will be profitable for them in the long term. And brands will focus on adding OTT platforms to their media mix. Sponsorship will also thrive, making the future an interesting time for all.