Consumers continue to reduce their reliance on traditional cable TV, and in some cases are cutting the cord altogether. What does the switch to streaming media mean for search advertising?
To gain some insight, I caught up with Sean Galligan, Yahoo's VP and industry lead for technology, media and telecom, who will soon work for Verizon when the telecom company closes the deal to acquire the media icon.
No doubt Verizon and AOL will combine data with Yahoo to gain more insight into a variety of topics, from app downloads to over-the-top (OTT) services, the delivery of apps and services over the Internet, without the need for consumers to subscribe to cable or satellite pay services.
comScore's most recent published data on OTT from December 2016 estimates that with more than 49 million homes, 53% of the U.S. WiFi-connected homes access at least one OTT service. For an average of 19 days during the month, consumers used the device 2.2 hours per day.
If my recent choices are an indication of the future in general, it seems consumers will continue to cut the cord, following last year's findings that suggest 77% use more than one OTT service; more than one-third reported not having a television; and 72% would rather see mobile, video, native, search or social advertising from OTT video-streaming marketers compared with 46% who selected TV ads.
In my opinion, OTT services put consumers more closely in touch with the Internet. Galligan said that among Millennials, more than 75% stream movies and traditional programs on something other than a television.
The industry will need to resolve these challenges. Consumers are frustrated by the search to find live content and the need to initially sign up and into channels on a service. I have many choices through Roku, but finding the content is laborious. I am continually reaching for my laptop or smartphone to search for the content before watching it on my television. Although it's a hassle for me, this could present opportunities for search marketers.
While the focus from last year has changed from getting consumers to subscribe to making it easier for them to search for information, consumers are still nearly seven times more likely to sign up for an OTT video-streaming service based on searching online or seeing an ad online, compared with viewing a TV ad.
"During the past 12 months we have seen a big increase in advertising activity and we're seeing nearly every media property, if they're not active with an OTT strategy, in the process of ramping up on one," Galligan said. "Often when consumers subscribe to a service, it's because they engage with some sort of digital ad."
This column was previously published in Search Blog on April 17, 2017.