The way people consume their media has changed drastically over the last five years. Consumers are no longer bound by program schedules. They have the ability to watch what they want when they want for as long or short as they want. Many viewers are switching to various forms of over-the-top (OTT) media. OTT media is a streaming media service delivered to viewers via the Internet, allowing customers to bypass cable, broadcast and satellite platforms. 

The most common OTT examples would include streaming services like Netflix and Hulu, or devices like Roku. Traditionally, these outlets had acted as the controller or distributor of media. A combination of the 2020 COVID-19 pandemic and the increasing number of subscriptions services resulted in roughly 80% of US consumers reported having at least one subscription service, compared to 73% before the pandemic began.

While they still exist, there is a shift by viewers to switch to OTT media over these traditional distributors. This shift has created a window of opportunity for advertisers by lowering the barriers of entry (mainly high costs) for running an effective media campaign.

Disruption in Cable Television Viewership

There has been a disruption in the traditional media world that started years ago. First, viewing habits shifted to when viewers wanted to watch shows and not when the shows actually aired. The advent of DVR recordings allowed this change in when television programs were viewed to occur. Then, viewing habits changed again with OTT media and connected TV devices (smart TVs). In younger generations, traditional TV viewing time has dropped by 40 percent over the course of the last five years, according to data recently released by Nielson. [1]

Connected TVs (or smart TVs) are televisions that have Internet and Web 2.0 capabilities. This capability gives users the ability to download and run applications from various OTT media services. According to the Parks Association, 50% of broadband households own at least one Smart TV.These trends might seem as if people are watching less video media, but this is not the case. In fact, Limelight Networks reported average online video viewing time grew 59% since 2016 with an average of 6 hours and 48 minutes per week. By 2022, it is projected that 82% of the global internet traffic will come from video streaming and downloads. Regardless of the source of their video, people are no longer willing to make the time to watch their media on a set schedule.

Most current televisions available on the market today come with these capabilities.

Advertising Opportunities with Streaming

All of the available streaming options provide a variety of advertising options for both business and consumers. Many assume the less ads the better, but that’s not always the case. A Deloitte consumer survey from 2020 found that even before the coronavirus pandemic hit, 40% of consumers chose an ad-only model, like NBC’s Peacock, compared to 38% no-ad model such as Disney+ and Netflix, and 22% were willing to choose a some-ad model like Hulu. The reasons may have more to do with which content the consumers prefer and not ads; regardless, commercials are still part of the average expectation of consumers. The advertising models provided by OTT media outlets prove to be distraction-free opportunities for businesses of any size. [2]

New Opportunities for Small Businesses

While these changes have led to major headaches for big cable companies, they have opened big doors for small businesses. OTT media is known for its precise targeting attribution models. To the small business owner, this means you can have the prestige of video advertising on television sets while not having to cough up large sums of money. The precise targeting capabilities and even measured results provide a whole world of opportunities that otherwise wouldn’t be available.

The most appealing aspect may be that these campaigns require no minimum budget and a much lower initial budget than traditional TV campaigns and media buys in order to be effective. Video ads on connected TVs can be bought either on Spot TV advertising, meaning you purchase an allotted time slot with a particular station, or through private contracts, but the pricing model will almost always be on a cost-per-thousand impressions (CPM). Perhaps the biggest benefit is being able to bid on a per-user basis.Targeting a customer base through television ads has never been easier; determine a target audience, set up a corresponding campaign and place a winning bid.If you are a small business owner who thought about running a television media campaign but couldn’t afford it, the opportunity presented by connected TV and other OTT media services should not be ignored.

Points Group has an in-house video production department, as well as a full-service digital marketing department with access to premium inventory across many different Connected TV devices and OTT media services. If you are interested in running a highly effective media campaign, contact our specialists for more information.



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This document was last updated on July 24, 2014