THE EVOLUTION OF STREAMING: Insights for advertisers


Video Streaming Distribution by Brands

Streaming as we know it today has undergone a massive evolution, growing in importance for marketers throughout its rise to mainstream media. The viewing platform continues to grow as ad spend in the space is projected to surpass $10 billion in 2021, eMarketer predicts.

“About twenty-five percent of households skewing younger are OTT/streaming/digital delivery-only, about another twenty-five percent average older and are more accustomed to the broadcast TV format… and that leaves about the other half of people somewhere in the middle.”

Jonathan Steuer EVP, TV Strategy & Currency, VideoAmp

“We’ve made such incredible strides in the streaming industry over the past ten to fifteen years that it’s easy to forget how far we’ve come. Ad format innovation is a huge opportunity that’s reallyallowed us to introduce [different types of advanced advertising], figuring out how to incorporate ads within the product experience so we have a lot more room to play with.”

Patricia Hadden Head of Growth Marketing, Peacock

Once a nascent platform in the 2010s, streaming video platforms have matured technologically and grown to deliver engaged audiences at increased scale. The streaming marketplace is cluttered though, and laden with poor-quality, non-sophisticated platforms.

For marketers, working with streaming partners who are transparent in their advertising experience and house premium-quality video content is of the utmost importance when activating OTT (or “over-the-top”) campaigns. Even more essential is to incorporate streaming and OTT into a balanced media mix, inclusive of linear TV, in order to maximize reach to the intended audience.

US Subscription OTT Video Viewer forecast

A Timeline of Streaming More than a decade of OTT and streaming premium video:

PRE 2010:  

Apple iPhone launches (2007), Netflix launches streaming service (2007), Hulu launches (2008), Roku launches (2009), TWC launches TV Everywhere (2009)

POST 2010:

2010: Smart TVs start to gain traction in the market

2011: Amazon Prime Video launches for Prime users, Xumo launches

2012: Connected TVs in 25% of HHs; 10M authenticated devices access 2012 Summer Olympics

2013:  Netflix launches first successful original series, House of Cards (and wins Emmy nominations), Google launches Chromecast; Online video is over 50% of all internet traffic

2014 Netflix spends $3B on content and wins 31 Emmy nominations

2015: 79% of U.S. HHs get broadband at home; 40% of smartphone owners watch video on their mobile devices; Amazon releases Fire TV device with voice search; Fubo TV, Dish Network’s Sling and Comcast’s Xfinity Stream launches

2016: DIRECTV Now launches

2017: Hulu launches Live TV service; YouTube Live launches; Disney pulls Marvel & Star Wars content from Netflix

2018: 76% of U.S. households have a connected TV device; Average daily time spent with connected TV increases to 15% of daily media consumption; Quibi launches; IAB launches IFA and apps-ads.txt

2019: OTT subscribers reach 182M (>50% of population); Viacom purchases Pluto TV; Crackle Plus, Disney+, and Apple TV+ launches

2020: Streaming is 25% of total time spent with video (Nielsen); OTT companies spend over $105B on producing original content; HBO Max, Peacock launches

leading benefit of OTT Advertising

THE FOUR DIMENSIONS OF STREAMING

There are four aspects that are vital to streaming advertising opportunities and progress against each one will ensure that the ecosystem scales and matures in a way that works for consumers and advertisers alike:

1. SCALE & UNIFICATION

2. AUDIENCE TARGETING

3. QUALITY: VIEWABILITY & FRAUD

4. AUDIENCE MEASUREMENT THE FOUR DIMENSIONS OF STREAMING

According to the Leichtman Research Group, 80% of U.S. households have at least one smart TV or internet-connected device plugged into their TV (with almost 400 million connected TV devices being used today).

Overall, 40% of adults in U.S. TV households watch video on a TV via a connected device daily – compared to 29% in 2018, 12% in 2015, and 1% in 2010.

According to research firm Parks Associates, in July 2019, Roku and Amazon had approximately 70% share of the U.S. market for streaming media devices, with Apple in third place.

According to Nielsen in their August 2020 Total Audience Report, streaming viewing has scaled to 25% of total time spent with TV through better connectivity (both in home and on the move), improved services and content libraries, as well as more savvy consumers with evolved expectations on how they want to consume their favorite programming.

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