The benefits premium OTT presents to advertisers in Asia

The way we have consumed media has changed radically in the past decade driven by rapidly evolving technology, viewer habits and of course business model innovations. No longer bound by medium or time, OTT has fundamentally changed our entertainment and content consumption habits. In fact, today OTT media services have largely become recognised as part of mainstream media – and the magnitude of this shift is immensely important.

According to a report by eMarketer, by 2022 there will be nearly 220 million Internet-delivered or OTT video users in the US. Echoing this growth, reports from Docomo Digital, also outline that OTT media services is expected to grow from US$97.4bn in 2017 to US$332.5bn by 2025, an astounding CAGR of 16.7%. Meanwhile a 2020 study by The Trade Desk also found that 180 million Southeast Asians use OTT streaming services and viewers stream eight billion hours of OTT per month across Southeast Asia. Nearly 57% of OTT viewers have increased streaming during COVID-19, and 73% plan to maintain or increase OTT consumption even after the pandemic. Regionally, 17% of OTT viewers haven’t watched any traditional TV in the three months prior to responding to the survey.

While premium OTT ad dollars in the past have often trailed behind non-premium and TV ad spend, marketers are fast waking up to the powers of advertising on premium OTT with an immensely engaged audience. With pay-TV subscribers and linear TV audiences on a slow decline over the past few years, premium OTT mediums help fill a void for advertisers trying to reach certain age groups in particular.

What’s leading the change in audiences?

Changes in audience preference have been a steady, and well documented shift. Many of us will recall our own shifts from consuming TV on a scheduled basis via traditional multichannel pay-TV bundles, to actively deciding what we want to watch, when we want to watch it and the platforms most convenient for the consumption. Growth in the adoption of smart devices and greater access to higher internet speeds is one of the key forces driving the monumental shift to OTT. According to  the "Over the Top (OTT) Market - Growth, Trends, and Forecasts (2020 - 2025)" report, mobile data traffic is experiencing exponential growth, driven by data-capable devices and high-bandwidth applications such as live video streaming.

Meanwhile, the growth of mobile based internet users is also attributed to the rising adoption of OTT viewers. A 2019 study by Penthera, quoting Limelight, also showed that in 2019 the smartphone became the primary device where people watch online video globally, surpassing computers, smart TVs, and tablets. Around 48% of adults say in the study that they’d be unable to give up their smartphone even for a single day, so it’s clear why OTT growth through mobile seems unstoppable.

The onset of the COVID-19 pandemic also created a boom on the OTT landscape, with audiences consuming more content at home via OTT devices. As per Zuora's Subscription Economy Index Report, trends of the COVID-19 impact on subscriber acquisition rates from March 2020, in comparison to the last 12 months, suggested that the global subscription growth rate for OTT Video Streaming companies grew seven times in March 2020.

Unsurprisingly, the demographic that most clearly transitioned from linear viewing in the living room to a variety of new approaches are 18-34-year olds, said a report by Gamut. With the rise of connected audiences, content choices have also accelerated with fewer audience members now opting to pay for expensive traditional pay-TV bundles.

All of these have led to OTT players now achieving a scale in viewership that is very compelling to advertisers.  The study by Gamut also said that consumers watching OTT are watching ad-supported OTT providing marketers the opportunity to gain incremental reach with an attractive audience. In fact, 73% of adults who watch streaming video say they watch ad supported OTT video, and 45% say they watch ad supported OTT the most out of all streaming video.

The study added that the audience that is watching ad supported OTT is an attractive audience for marketers as they are younger, diverse, affluent, and have children in the household. This means, there is a smaller overlap between OTT viewers and traditional viewers given the target audience for the latter, often fall under the older demographic. Compared to OTT, traditional TV can also come across as out of date with reach being fragmented due to measurement difficulties. This means that even with the right data, targeting remains less granular on traditional TV as compared to OTT, resulting in added wastage in spend for marketers for the former.

Traditionally, TV networks have represented to advertisers the details of their audiences, based on proprietary research and research from third-parties. Ad buyers used this data, as well as their own research, to create a marketing mix with campaigns that spanned different TV networks. These campaigns tried to balance overall costs with frequency of exposures to drive optimal results. While reach has always been the strength of TV advertising, targeting ads at the viewer-specific level, measuring them precisely and clearly attributing actions to them has been elusive. Given the data willingly shared by consumers with OTT players, prospect of targeting audiences across premium content sources becomes a whole lot more precise.

The advantage over traditional TV

As a digital platform, OTT is different from TV, and has a mature monitoring method to ensure advertiser investments pay off. Taking for example, leading Asian streaming platform iQiyi, third-party monitoring companies can easily track advertisements placed on its platform, by including cross-device monitoring, covering mainstream standard advertising formats, to provide customers with targeting data, impressions, reach and frequency and GRPs.

At the same time, third party players can also help advertisers to easily track multi-screen advertising activities on both TV and OTT platforms, and understand the on-target incremental reach brought by OTT platforms, so that advertisers can measure the effects of multi-screen advertising.

For platforms such as iQiyi, third-party "Brand Lift Studies" can also be used to measure the performance of OTT brand advertising campaigns, helping advertisers understand the impact of advertising campaigns on the brand’s awareness and affinity, ad recall, purchase intent and recommendation intent amongst others. 

Compared to traditional TV, premium OTT platforms such as iQiyi also allow advertisers to target the desired audience segmentation, which enables better flexibility and targeting options as opposed to TV. The personalised ads ensure relevancy to viewers, which aids with the prevention of damage to brand reputation and improves satisfaction. With frequency capping tools in built, advertisers can also do their part to minimise ad annoyance and create a holistic experience for their target audience. 

Given its tech enabled ad offerings, iQiyi is also able to enable direct advertising conversion which aids the marketer to achieve different objectives of campaigns, and set the buying models to achieve the goal of maximising reach, visibility or specifying share of voice ratio through its display placements.  All of this allows the OTT platform to provide brands with a higher level of measurement with detailed and accurate monitoring. Most of all, advertisers will be able to deeply understand users' behavior patterns and preferences, and make use of the data to their advantage.

Premium vs non premium

Today, premium video channels, such as the platforms serving OTT content, should be an essential part of every advertiser’s toolkit given the trust consumers have on these platforms. This leads them to be more receptive to ads on them, said a report by Pubmatic. Premium OTT is generally defined as content which is created with broadcast quality with the streaming platform owner having full right to airing the content, unlike general OTT which can also contain user generated content and pirated content. This enables premium OTT to create a more brand safe environment for advertisers. Premium OTT content also enables a quality full screen, immersive full screen experience for the viewer.

Having brand ads on advertiser platforms also is key to branding initiatives. In today’s day and age, where consumers are inundated with ads, brand building becomes a necessity to ensure your brand stays top of mind during the purchase process. Moreover, customers are also conscious of responsible advertising and as such more consumers now care about ads needing to appear next to respectable content. So while some non-premium platforms may give the illusion of better performance, premium OTT services no doubt have a stronger branding advantage. According to Pubmatic, ads on premium OTT platforms can benefit from a halo effect — resulting in significant uplifts in branding metrics, like unaided brand awareness and message deliver. Premium OTT delivers brand messages better than non-premium video, on average 1.9x higher.

Viewers also trust premium OTT platforms more than non-premium ones with the use of their personal data, found the study. In fact, OTT viewers are almost two times less likely to feel like ads on the platform are using their data in a way they do not like, or are intruding on them.

The importance of brand safety and responsible advertising

Moreover, for most advertisers, brand safety is also a key priority when advertising on any OTT platforms. While short-form user-generated content (UGC) video platforms might have compelling offers for advertisers, the vast nature of content on the platform does little to make advertisers feel a level of security that premium OTT platform providers can present.

Understanding the importance of brand safety are premium OTT players such as iQiyi, which has been the top performing video platform in China since 2015. Aiming to give advertisers peace of mind when it comes to brand safety, iQiyi currently invests heavily in purchasing only work from the top production companies in numerous countries. It also invites the most well-known celebrities to participate in its self-made projects, to provide exclusive entertainment to audiences globally. iQiyi’s content strategy is Professional Produced Content (PPC). Among the several types of content UGC, PGC, and PPC in the video platform, PPC content is the most internationally influential, high-quality, and at the same time the most expensive.

Today, iQiyi is positioned as an Asian entertainment and cultural content platform, which sets it apart from European and American OTT platforms. The full spectrum of Asian content, especially top-class Chinese titles, makes the platform an attractive one for Asian viewers. Moreover, to keep its competitive edge, the platform has also increased the distribution of Korean dramas, Japanese comics, and Southeast Asian local dramas. All of these have resulted in the platform growing tremendously over the past two years where it now boasts 12 times more daily active in 2020 from the previous year. In total, the platform has 106.2 million paid members and 350 million viewing hours across 191 territories. It also launched its international app in 2019.

With majority of its viewers being Millennials who are digitally engaged, one of the main reasons that advertisers are drawn to iQiyi is the platform’s premium content is because allows for highly personalised campaigns that effectively target audience segments based on the type of content they are watching. Moreover, advertisers are able to partner with the brand for their own content marketing initiatives and take advantage of its exclusive content and high quality self-produced content which can aid with heightened brand affinity.

Given ads will not be skippable by users, the platform is able to also boast higher playback completion rate and better dissemination integrity.  The platform’s diversified, creative ad formats also have shown increase in visibility and impact of advertising and advertisers are welcome to customise planning solutions with the team through cooperation and innovative marketing methods.

This article was created in collaboration with iQiyi International.