Over-the-top video advertising now counts for 26% off video ad spend, up from just 8% a year ago, according to data from SpotX, a video ad serving platform. The company estimates that OTT ad spend will increase to about 30% by the end of 2017.
“This incredible growth of OTT ad spend across our platform demonstrates a shift in thinking on the part of media buyers, as advances in technology have now made it possible for buyers to follow viewers (wherever they may be) while enjoying the benefits of targeting and analytics that they've come to expect elsewhere,” Kelly McMahon, VP of global demand operations at SpotX, told Digital News Daily. “We believe OTT ad spend will continue to build even more momentum throughout 2018.”
While television is still king when it comes to advertising reach, the explosive growth of streaming video offerings is leading to more and more consumers cutting the cord in favor of streaming bundles of video and content, as well as niche video services. Media buyers and advertisers are, in turn, responding to that shift in consumption by reevaluating where their money is spent.
Another big factor in the shift to OTT ad spending is the targeting capabilities it offers. Not only can advertisers target niche audiences, but they can try and track what they do elsewhere online.
“The key to buying across video channels, including OTT audiences, is taking a holistic view of the data that can be made available; specifically: linking consumption behavior, or what people watch, to digital activities, or what they do online, along with ad exposure data,” says Jay Prasad, chief strategy officer for the demand-side platform (DSP) VideoAmp.