The Future of Advertising: Why Ad-Supported OTT Services are Winning

21 Sep 2022

There’s been a meteoric rise in connected TV advertising expenditure in applications like AppleTV, FireTV, and Roku, as a result of overwhelming demand. This boom resulted in data-driven, multi-platform ads being embraced by publishers and brands, resulting in a 57% rise in connected TV advertising spend from 2021 to 2022.

Customers have made it clear that subscription fatigue is a real problem for content creators.

With Disney and Netflix releasing ad-supported OTT platforms, ad technology may be able to monetize their content. Generally, customers prefer relevant, brief, noninvasive, and timely ad content, as long as it does not irritate them.

Because of this, ad-supported business models are becoming increasingly popular among content providers. The majority of content providers wish to satisfy their clients despite lacking the technical expertise needed to build data-driven segment audiences.

Technology is enabling content creators to add e-commerce features, allowing authentic merchandising to be sold quickly to fans, for example. The content creation economy is growing, and new tools allow content creation across multiple networks. How do you monetize that? Subscription games are no longer the only option.

Brands will pay more attention to media companies with a clear audience and engaged fans in the next decade, in my opinion. Data—and data is the new gold—is their sales pitch to brands. They will collect large numbers of subscribers and analyze them to deliver targeted, timely ads.

Are OTT providers’ customers prepared to see ads on mainstream and specialty content platforms? Subscribers are willing to put up with targeted delivered ads and a slightly delayed experience in order to see the highest quality, premium content at a lower price point.

The Benefits of Ad-Supported OTT Services

How can brands benefit from ad-supported OTT services in this new era? There are three benefits: increased reach, reduced waste, and better segmentation through data.

We’ve found that short-form ads are much more profitable than lengthy-form ads. The optimal length is five to 10 seconds in both landscape and portrait orientations. To entice viewers who want to learn more about your product or service, include engaging touchpoints in your ads. Using new technology, it is possible to produce and distribute nonintrusive advertisements. In addition, we’ve discovered that preroll advertisements no longer provide a good return on investment. Instead, make the ad experience enjoyable and engaging for audiences by gamifying it—the process of rewarding consumers through game thinking and prizes.

For the first time in history, advertisers and brands are making direct deals with niche creators. Because consumers are willing to pay a premium for specialized content, the more specialized the content is and the more creatively brands advertise, the more ad viewers we will have. That will result in more customers.

The rest of the content creators are likely to follow Netflix and Disney in fully embracing data-driven, ad-supported video as the next phase of content monetization at scale. Are you ready?

For more information on how you can capitalize on the OTT advertising boom, contact VIIRL today. If you haven’t already, it’s time to invest your top-of-funnel advertising funds in the future of broadcast advertising. With demographic targeting, video production services, and a premier management team, now is the time to maximize your company’s ad budget. Learn more today!