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Why OTT is a Perfect Extension of Traditional TV

Jul 29, 2020

In 2020, it is no secret that all things change. This is now as apparent as ever.

While there are some things in today’s society that are currently the prime example of needing to change, how people consume entertainment is not an exception to the rule.

People are changing the way they consume content like watching television.

While it may seem like Traditional TV and OTT should be bloodthirsty competitors, in reality, they should be paired like the best of friends.

What is OTT? What is Traditional TV?

You see those three letter marketing acronyms all over the internet these days (and to be honest it’s hard to keep track of them all), but perhaps the most important is known as OTT.

Over-The-Top Television is more commonly understood as ‘streaming television’. When you watch Hulu, or Netflix, or any other internet TV, you are essentially watching OTT.

Traditional Television, also known as Linear TV, is how people would watch TV before streaming services were available.

All shows and channels are pre-programmed and follow a specific schedule.

A huge difference between Linear TV and OTT is with streaming, you get to choose your own programming whenever and wherever you want.

OTT allows you to no longer be limited to what is on at any given time, and gives you the ability to finally watch 20 episodes of The Office in a row.

While OTT Streaming and Traditional TV can be seen as very similar things with few differences, on the marketing side they are greatly different.

Most people are familiar with how Traditional TV works: ad space is bought and sold manually.

This leads to a very long process and an inability to have a quick turnaround time.

On the other hand, OTT ad inventory is usually bought and sold programmatically, meaning that digital ads are bought and sold in an automated manner through designed software.

This opens a whole new world of possibilities in marketing on the big screen!

Transition from Traditional TV to OTT

OTT subscriptions have seen some absolutely astounding growth in the past 10 years. Think about how you used to watch TV in the early 2010’s. You were probably still flipping through channels, while Netflix and Hulu were just getting started.

In 2014, there were 150 million online streaming services subscriptions.

In 2019, this number has grown to over 600 million, a 300% increase! Subscribers are also expected to almost double to 1.1 billion by 2021.

Researchers also found that about 70% of US citizens are subscribed to at least one OTT service, while the average user subscribes to 3.4 different services.

In addition to the average user being subscribed to multiple OTT services, it’s also been reported that the number of households with two or more OTT subscriptions has increased by over 130% in the past five years.

In 2019, 46% of US households subscribe to multiple OTT services, as opposed to 33% in 2017 and 20% in 2014.

This proves that once users try one of the big guns like Netflix or Hulu, they are likely to expand on their OTT capabilities and subscribe to other services! It’s getting easier each year to reach a vast number of people using OTT!

You can read more about the evolution and future growth of OTT in our OTT Advertising During The COVID-19 Outbreak!

Pushing the Growth of OTT

Now you may see the numbers from above and think “how it is even possible to achieve that many new users over such a short amount of time?”

The thing to know here is that these new users probably aren’t just discovering television for the first time, they are most likely just adapting with the newly available services.

These people are most commonly referred to as Cord Cutters.

A ‘cord cutter’ is simply someone who figuratively ‘cuts the cord’ on their cable in favor for internet streaming. Between 2019-2020, there were 120.6 million homes in the US that used some kind of TV service (that is about 94% of all homes in the US).

This equates to about 300+ million people in the US. Of these people, about 39.3 million were cord cutters. eMarketer is expecting this number to reach 55.1 million by 2022, following the trend of huge growth.

Who Are Cord Cutters?

According to a study from PwC, 90% of Americans between the ages of 25 and 34 access TV content via the internet.

Also, 87% of surveyed people between the ages of 18-25 are cord cutters, while 78% of people ages 35-49 and 63% of people between the ages 50-59.

This shows that cord cutters aren’t just millennials, they come from all different age ranges.

Families with a parent 35-54 years old with two or three children are a huge part of the cord cutting demographic.

The families claim that cord cutting is a way to save money and watch more content on demand. Cord cutters are value-focused but not averse to paying for entertainment.

Benefits of OTT

While OTT and Traditional TV seem to be very similar in their general definitions, the biggest difference has to be the targeting and tracking capabilities of OTT.

With Traditional TV, you are most likely casting the biggest net you can, and can really only attempt at reaching an ideal audience by choosing what shows or times people are choosing to watch.

These things are still possible with OTT, but your marketing campaign will also be able to target relevant audience segments.

Using advanced demographic information and internet cookies OTT can take advantage of users’ behaviors and serve your ads to the right people at the right time.

At Conduit, we are even able to target people based on the physical locations they recently visited!

As for tracking and reporting, your Conduit OTT campaign will be able to tell you how many users saw every second of your ad, where your ads have been served, and exactly what streaming service or tv application your audience is using.

Why OTT is a Perfect Extension of Traditional TV

If you are already running an ad campaign on Linear TV, there is absolutely no reason to not also be running an OTT campaign!

By only running one or the other, you are severely limiting the potential reach of your campaigns. It is easy to confuse the two and see them as rivals, but in reality, they should come hand-in-hand with each other.

With a huge population of TV watchers moving from Traditional to Streaming, it is getting more and more imperative to open up your capabilities and start targeting every potential customer, instead of just the ones watching one type of television!

We believe OTT is only going to continue to grow as the world switches to a more mobile first society, especially with the rollout of 5G.

As our internet becomes faster and more reliable, people will find themselves streaming video and movies on their mobile devices, which allows marketers like us to place our ads in front of them wherever they go.









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