Last week, MediaRadar hosted a panel to explore the recent changes in OTT and what the future holds for this type of advertising.

The panel was moderated by LA Times reporter Wendy Lee. MediaRadar CEO Todd Krizelman was joined by Bill Condon of Xumo, Justin Gutschmidt of Premion, and Matt Graham of Acorn TV.

All of the panelists know firsthand what struggles and benefits the industry faces as OTT was thrust into greater popularity and usage sooner than planned. Keep reading to learn some of their insights into the B2C implications of OTT advertising.

We encourage you to subscribe to our blog for the latest data surrounding the advertising industry. We will provide daily updates as COVID-19 continues to make its mark on the US economy.

COVID Propels OTT Into the Spotlight

2020 has been a whirlwind around the globe, and most outcomes haven’t been positive. However, in the midst of an economic recession in the U.S., OTT advertising is benefiting. Why?

The growth in OTT advertising is a result of the huge increase in streamed content that occurred amid stay-at-home mandates. With everyone spending so much time watching entertainment content from streaming platforms, it only made sense that advertising content went there as well.

Of course, OTT was on the rise anyway—the pandemic just accelerated the process.

This quick shift to OTT was driven by many factors surrounding the pandemic itself, including a need for measurability, a changing economic landscape, and the consolidation of OTT platforms.

Need for Measurability

One reason that buyers who traditionally buy ad time on linear tv platforms turned to OTT was the ease with which digital data can be gathered.

“For the first time, budgets were constrained. Understanding how successful my campaign was became very important in a time where budgets were being inspected,” explained Gutschmidt. “For advertisers that did not traditionally advertise in the OTT environment, they started looking there for the opportunity of measurability to really precisely target those audiences that they really needed to get in front of and understand the outcomes of a campaign.”

Essentially, OTT allowed brands to be more effective with their spend. Because of the uncertain financial scene, it was more important than ever that they put their money towards worthwhile advertising. The data collection made possible via OTT gives advertisers the assurance they need.

Changing Economic Landscape

Some brands chose to change their OTT advertising approach based on the shifting needs of their audience. Some categories of ad spend were unnecessary during a pandemic, while others benefitted from an increased demand.

As a result, retail saw an immediate dip in the month of April. 17% of all OTT ads in Q1 were retail, but this number had dropped to just 9% by April. The sub-categories driving this quick recovery included chain restaurants and home improvement retailers. Meanwhile, jewelers, wedding registries, and formalwear retailers remain down.

Ad spend on finance spiked in April, and remains higher than pre-pandemic levels. The largest players driving that trend include insurance brands and debt management firms such as Credible.

Home Furnishings also spiked in the early days of the pandemic before returning to pre-pandemic levels. The primary drivers were cleaning supplies, air fresheners, and mattresses.

Alcohol brands have seen their share of OTT advertising increase amid the pandemic—especially beer brands. In Q1 they accounted for 0.4% of all ads, but in Q2 made up 3.1%. This increase was driven by a strong April where beer ads made up 4.2% of OTT ads. The category got a further boost in the summer from hard seltzers.

Of course, linear tv saw their fair share of fluctuations in ad spend by category too. How did that compare to OTT?

• Retail spend mirrors the same pattern in OTT and linear tv, with spend falling in April but recovering quickly. 
• Financial spend saw very little fluctuation in TV spending for the first seven months of the year. 
• Home furnishings saw the same spike in the early days of the pandemic, but has remained higher instead of returning to pre-pandemic levels. 
• Alcohol brands saw a similar trend on linear TV, seeing their presence grow as the year went on.

If these trends continue, many categories stand to maintain a high digital presence that, without the pandemic, would’ve taken much longer to get there.

Accelerated Timeline Brings Accelerated Benefits

While the rapid boost to OTT caught some industry members off guard, it looks like it’s here to stay. This is exciting news, in part because when used correctly, OTT advertising offers flexibility and efficiency during a time of economic uncertainty. As we continue to monitor all the new ways advertisers are using OTT, we’ll share our findings here on our blog. For more information, reach out to us directly.

For more updates like this, stay tuned. Subscribe to our blog for more updates on coronavirus and its mark on the economy.