The marketing industry has been developing and expanding continuously, largely due to improvements in digital technology. The Covid-19 pandemic has also contributed to this, forcing brands to be agile with their strategies and seek new development opportunities.
During the last two years, we have witnessed the magic of silver screens come to a standstill, while Over-The-Top platforms (OTT) have unfurled their wings. These platforms enable people to stream rich, diverse, and engaging content through their portable devices and TVs at home. With cost-efficient internet rates and an approach where something is offered to everyone, OTT platforms have become a trend that is here to stay.
The Indian OTT industry is expected to achieve a value of $12.5 billion by 2030, which reflects significant growth from $1.5 billion in 2021. As per Statista, the number of Netflix (an OTT platform itself) subscribers in the United States is projected to become 188 million by 2025.
The worldwide rise of OTT platforms has provided digital marketers with fantastic opportunities to reach and communicate with their prospective customers in several innovative ways. Digital marketing on OTT platforms involves creating marketing campaigns that are streamlined to make the most of the increasing viewership of top OTT platforms.
Size of the OTT Advertising Market, and how much are businesses really spending?
According to MordorIntelligence, the global OTT industry, which was valued at USD 101.42 billion in 2020, is projected to reach USD 223.07 billion by 2026, representing a CAGR (compound annual growth rate) of 13.87 %.
Within the United States, 64 million homes have subscribed to OTT services, with an average home watching time of 86 hours of OTT content each month. This definitely indicates that the days of cable television are now well in the past. Viewers definitely prefer online streaming media.
OTT platforms like Netflix do not run commercials or advertisements with their paid content, while some OTT platforms display advertisements with their content. Online streaming platforms are all for keeping the prices of commercials low because of growing competition between platforms and to enable the attraction of more and more eyeballs.
As per MediaRadar, 5530 advertisers ran advertisements across 5 leading OTT platforms including Discovery+, HBO Max, Hulu, Paramount+, and Peacock. In the fourth quarter of FY 2021, they spent around $438 million. Further, OTT advertising expenses have witnessed a growth of 22% between the third and fourth quarters of 2021.
How do brands use OTT to advertise?
Accurate Audience Targeting
People use their email accounts to log in to OTT platforms. Thus, marketers get valuable data associated with users like age, gender, region, and type of device. Brands make the best use of this data to create customised marketing campaigns. Consequently, they access the viewers with the highest potential, and launch tailored ads for better engagement, which are less expensive, and boost ROI.
To evaluate the effectiveness of their marketing activities, marketers utilise analytics to track and measure data that is not available on traditional platforms, such as viewability, interactions, and delivery efficacy. This information assists marketers to understand what is working and helps them optimise future ads accordingly, to increase conversions.
Advertising via OTT channels is an innovative way to reach your customers/target audience. OTT platforms allow advertisers to distribute their material across all devices (e.g., computers, TVs, phones, and tablets) when viewers access the OTT platform, resulting in “second chance” business. For example, suppose a customer looks for but does not purchase a pair of headphones. In this case, cross-channel marketing can retarget this customer with headphone advertisements on an OTT platform, using the email address of the customer it is linked to.
Besides in-show content, digital marketers leverage OTT channels to reach consumers through unconventional promotional collaborations. These collaborations try to capitalise on the popularity of specific OTT series by developing parallel narratives that sync with the brand’s identity.
PepsiCo’s recent advertising agreements to capitalise on the hype around Netflix’s Spanish drama ‘Money Heist’ is one such instance. PepsiCo began selling limited-edition cans with photographs from the web series as well as a QR code directing the purchaser to an enrollment form for a virtual fan gathering.
How the IPL influenced digital marketing in India?
Since its beginning in 2008, the Indian Premier League has been portrayed as a marketing extravaganza by people in the biz. Further, the IPL has become a household name amongst people of all ages and socioeconomic classes. Cricket is extremely popular in India, not just as a sport, but also as a vital medium for expressing human emotions. However, while most people are counting the number of runs, balls, and overs on screen, the real numbers are being counted behind the scenes, where advertisers are utilising this four-hour show (2-month-long event) to deploy their marketing strategies.
The IPL has indeed opened opportunities for brands to utilise innovative approaches to attract an extensive base of viewers and prospective consumers. Moreover, the ideal timing (in the evenings, and during the summer holidays) of the mega event also contributes to making it a hub for marketers looking to launch their marketing strategies.
Every year, IPL matches are scheduled during the April and May months, when most students and college-going teenagers are on vacation. On weekends, when people are looking for something to watch with their families, there are usually two matches organised. The longer the duration of the matches, the more time will be available for advertisers to display their advertisements.
How is IPL making money together with advertisers?
Currently, the IPL is the most-watched yearly mega sports event in the country and contributes significantly to the Indian economy. The IPL has been a game-changer for the advertising industry when it comes to ad income. The IPL’s official broadcaster, Star Sports, got digital rights to the tournament for the period from 2018 to 2022, for Rs. 16,347 crores. The IPL hosts T20 cricket matches, with each match including around 2300 seconds of commercial space. Typically, a sponsor buys a few seconds for each match and pays approximately Rs. 5 lakh for each second.
On the other hand, earning sales is not the only purpose of IPL marketing for brands. They launch products during a season and then continuously run their ads during the breaks between two overs or innings breaks. While Vivo was the title sponsor, the brand launched new smartphone models during the IPL. Now that the TATA group has bought the title sponsorship, the multinational conglomerate has utilised the event to launch its much-awaited super app ‘TATA NEU’, as well as promote ‘TATA Punch’, the SUV car.
Advertising brands put in a lot of effort and creativity into building a strong image of their products during the IPL, and this benefits them throughout the year. They run ads for their newly launched products repeatedly, to ensure that their viewers grow familiar with them.
OTT Advertising and its Pitfalls
While digital marketing on OTT platforms has become one of the most popular advertising channels today with several advantages over traditional approaches, it is not without its limitations. The difficulty with OTT advertising is that it is a fragmented business with a lack of operating rules and norms. There are now more than 200 online content streaming sites.
However, OTT advertising delivers many advantages that TV commercials cannot, there are still some issues that require serious consideration and must be resolved before we can eventually claim that OTT advertising is a perfect digital advertising medium. Significantly, these platforms still lack ads fraud prevention measures. Additionally, on OTT platforms, one can not easily measure user engagement and reaction since OTT ads are not calculated by metrics such as clicks.