While all advertisers are allocating more dollars to OTT, among product categories, apparel & accessories allocated the most, with 61% of their premium video ad budget going to OTT, by far the most of any category. Other categories above average were travel services (36%), entertainment & media (36%), technology (31%) and CPG (26%).
Looking at OTT by sub-type, advertisers are paying a premium price for TV Everywhere compared to OTT Pureplay and Ad Network/Ad Exchange. TV Everywhere is video content from networks authenticated by MVPD’s. In 2020 NBCU captured the most incremental investment in ad spend. Among OTT Pureplay, the AVOD Hulu, received the largest incremental investment in ad spend (and most of any provider) followed by Roku. Ad Network/Exchange had the lowest CPM although The Trade Desk had significant ad spend growth.
In 2020, streaming video had a breakthrough accounting for 25% of total TV usage in the second quarter, up from 19% in fourth quarter 2019. Several new providers, led by Comcast’s Peacock, were launched while other providers reported strong subscriber gains.
Looking at 2021, industry analysts project continued OTT growth, Discovery+ will launch as a hybrid streaming video service in January (AVOD and SVOD), HBO Max could introduce an AVOD service in the 2Q and ViacomCBS will be relaunching their streaming video products. The services will be rolling out worldwide ensuring continued ad spend growth domestically and globally.
SMI’s data and market intelligence for the OTT category have been enhanced by our introduction of a new, more granular taxonomy that provides actionable insights at an OTT sub-type level. We will continue to track the ad spend, ad revenue, and pricing within this growing market, helping you make smarter media decisions.