73% of video streamers have watched ad-supported OTT, IAB reports

Dive Brief:

The largest audience segment of ad-supported video (ASV) delivered via over-the-top (OTT) is adults age 18-34 who have annual incomes of $75,000 or more, according to a new Interactive Advertising Bureau report “Ad Receptivity and the Ad-Supported OTT Video Viewer” that was provided to Marketing Dive.
Seventy-three percent of viewers who regularly stream video have watched ad-supported OTT, and 45% say they watch ad-supported OTT the most. More than half, or 52%, of ad-supported OTT viewers are cord-cutters or cord-shavers. With regard to why these viewers cut the cord, 77% point to cost, 42% cite “convenience/flexibility” and 38% better content on streaming services.
Ad-supported OTT video viewers are also more likely to try new brands, and 36% learn about new brands, products or services from video ads. These viewers also spend more on online subscription purchases, like meal kits, at $119 per month compared to $89 per month for subscription-based video on demand (SVOD). ASV OTT audiences are also more likely to follow social media influencers than SVOD and TV-only viewers.

Dive Insight:

The IAB’s research highlights the growing opportunity in ad-supported OTT video while offering valuable insight into audience viewing habits and behaviors as the compare to reviewers of subscription-based on-demand video and TV-only viewers. A key opportunity for marketers in this is area is being able to connect with consumers — especially younger age groups who have been a struggle to reach via traditional TV. Younger consumers are driving the cord-cutting trend, which is accelerating faster than industry experts previously thought, and are more likely than older generations to stream video.

Another key opportunity for marketers could be in combining OTT video ad campaigns with influencer marketing as ASV OTT viewers are more likely to follow social media influencers, according to the research.

Marketers should note the higher percentage of ASV OTT viewers who enjoy interacting with ads and rely on video ads to discover new products, brands or services. This aligns with recent Forrester research showing that two-thirds of viewers don’t mind watching video ads to access free content. Millennials and Gen Zers spend more time streaming video than older generations, and are not averse to ads, especially when they are offered something in return.

Overall, OTT TV ad spend is projected to increase 40% to $2 billion in 2018, according to a fall update to Magna’s U.S. ad forecasts for 2018. Higher adoption of smart TVs and set-top boxes is driving the increase, and Magna projects that 80% of U.S. households will be reachable via OTT this year.