This year, we’re bringing in the end of the year with a series: 12 Days ‘til New Years. We’ll continue our tradition of highlighting the most notable brands and spending across ad tech platforms, consumer media, and B2B industries.
Today’s entry in the countdown: nine top OTT spenders.
2020 saw an increase in both the number of streaming services and the size of their respective audiences. As a result, brands began to incorporate ad-supported video on demand (AVOD) channels in their media mixes. The channel is still nascent, but as ad-supported OTT becomes more mainstream and people cut their cable subscriptions, it will be important to pay attention to the brands experimenting with this new advertising channel.
At the beginning of the year, MediaRadar began tracking OTT advertising. Soon, we will be releasing a new report on OTT and TV Everywhere. It digs deep into the biggest buyers and trends shaping this ad space. Subscribe to get the new OTT trend report in your inbox when it’s published.
For now, here’s a snapshot of the top 9 spenders on OTT.
9 Top Spenders in OTT Advertising
OTT is a relatively new advertising format, but 2020 provided an ideal landscape for advertisers to increase their spend in this area. As brands look to it as an alternative to other digital spending, it’s reasonable to believe that the OTT space will only continue to grow.
The nine big spenders listed below have a head start in reaping the benefits of OTT.
GEICO, the second-largest auto insurer in the US, dove into OTT advertising this year. Some industry experts expect auto insurers to benefit significantly from the pandemic, and GEICO clearly hoped that that would be the case.
Some carriers have offered rebates and rate cuts to reflect users’ decrease in driving time due to stay-at-home orders and shelter-in-place mandates. Though providers offer lower prices and have less revenue coming in, the industry as a whole is more profitable when people drive less and get in fewer accidents.
Part of GEICO’s advertising strategy may have been influenced by the lack of live sports. GEICO boosted ad spending on OTT when sports were suspended back in March. When the NFL returned in September, GEICO OTT ad spend fell as dollars shifted back to linear TV.
OTT only represents 1.6% of their advertising spend, but that small percentage still places it at the top of OTT spenders when translated into dollar amounts.
T-Mobile was another big spender in the OTT space. This is likely due in part to their acquisition of Sprint Corporation in April—the deal had been in the works for a while, but was still notable.
Even before the merger, T-Mobile was vastly outperforming others in the industry, which could be the reason they felt comfortable spending so much on OTT advertising or the result of their investment in OTT.
The Home Depot
Home Depot invested in OTT advertising space this year, mirroring increased store traffic due to a surge in home remodels during the COVID-19 pandemic. It turns out that people put more effort into making their homes the way they want them when they’re forced to spend more time there.
Home Depot also spent over $1.3 billion on increased employee benefits during the pandemic and aided in supplying resources such as N95 masks to frontline healthcare workers.
AT&T struggled in 2020—keeping up with the 5G network craze and struggled to profit as much as expected with HBO Max. Despite this, they were one of the top spenders using OTT advertising.
Analysts at Trefis expect their work to pay off. In comparing AT&T’s performance in 2020 to their performance during the 2007-2008 financial crisis and taking into account their current strengths and the expected rise in popularity of HBO Max, analysts predict that their earnings will rise with time.
Next up is Noom, who brands themselves as a long-term health solution.
Noom was particularly well suited to the market in 2020 as many individuals looked to better themselves during lockdown and even more had a heightened concern for their long-term health.
Noom increased their advertising across all channels this year, except print and events (which they did not spend any money on in 2019 or 2020). According to MediaRadar data, OTT made up 5% of their marketing mix.
People seeking financial guidance and education during the shaky financial climate this year turned to Nerdwallet. With many facing unemployment or decreased hours due to the pandemic, there was a high demand for personal finance solutions.
The company continues to target those looking to save by providing specific guides and blog posts related to COVID and spending, such as 5 Minimalist Tips to Make the Holidays More Affordable.
Verizon, like AT&T, also put significant effort into continuing to grow the 5G network. At the same time, they managed to stave off the more drastic effects of the COVID-19 financial crisis based on their wireless network.
With more people working and attending classes from home, strong wireless connectivity increased in importance. Verizon capitalized on this demand and spent on OTT advertising.
Liberty Mutual Insurance
Liberty Mutual, another insurance company with plenty to offer customers during a time of stress and fear, sought to make themselves known on OTT platforms.
Despite high catastrophe losses of almost $1 billion—due to COVID-related events, the west coast wildfires, and major hurricanes—Liberty had high Q3 earnings and attributes their success to strong investment income rebounding after March lows.
We’ve written before on the impact COVID-19 has had on the real estate industry. With the housing market still going strong, it makes sense that Zillow would work to stay at the forefront of their audience’s mind.
Zillow is uniquely situated within the real estate industry because they are not location-dependent, meaning that the various areas in which home sales have increased (mostly in the suburbs) all have the potential to benefit Zillow.
If you want more insights on OTT spending, we highly recommend you check out our upcoming trend report. The report offers more in-depth analyses of buying patterns across industry segments on ad-supported OTT platforms. Read past trend reports and subscribe here.
Up next in our 12 Ads ‘Til New Years series will be: 8 Biggest Mergers.
For more updates like this, stay tuned. Subscribe to our blog for more updates on coronavirus and its mark on the economy.