Why Advertisers Must Embrace OTT Services' Ad-Supported Models in 2023

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As the fight for eyeballs intensifies, we are seeing more and more companies diversify their monetization strategies to include ad-supported revenue models that scale their advertising offerings and capabilities. As companies like Disney and Netflix debut ad-supported models, marketers and advertisers can take advantage by integrating themselves into the OTT mix to create campaigns that hook viewers in.

Historically, subscription-based models were leading the way for OTT and streaming companies, but as subscriptions have plateau’d, ad-supported revenue models have gained traction and become more mainstream, enabling a broader reach to those consumers who are unwilling to subscribe to content, but still want to view it.

OTT’s Impact on Advertising Trends

There is an intense competition for ad dollars because many advertisers are chasing those advertising budgets. We are starting to see this competition now, as ad spend and targeting costs increase across the market. As the market evolves, inventory quality is also quickly becoming a hot topic. From a pure supply basis, do providers have enough inventory to reach targeted audiences at scale? The irony of targeting is that as targeting specifications increase, addressable inventory starts to decrease.

Scaling happens in two ways: one is through actual ad sales based on inventory and that inventory being sold directly by you. The other way is through parents and other organizations selling your premium inventory. When this happens, you’re left with remnants that can be sold, thus posing the question: What do I do with remaining inventory? With this comes a deeper discussion of fragmentation of inventory and data, which will impact omnichannel planning and overall scalability for many teams.

Despite these concerns, the need for reaching highly targeted audiences across streaming media still exists and the fight for ad dollars intensifies, creating more prevalence for ad-supported models than ever before. Advertisers are leaning into OTT streaming as a critical part of their digital media mix to extend their marketing reach and increase ROI. As competition for ad space elevates across streaming and OTT channels, we will see companies continue to develop new, unique ad products that will be sought out by advertisers to bolster their omnichannel strategies.

Opportunities for OTT Advertising Success

All streaming media companies have content and audiences, but what is critical is the ability for these brands to come up with new, innovative ways to package the content and reach audiences based on their content consumption preferences. Otherwise, it becomes commoditized. Additionally, top OTT streaming companies are working to elevate their ad models to create non-intrusive and enhanced user experiences while also keeping their ability to scale advertising models and targeting capabilities, thus ensuring success for their advertisers.

Advertisers looking to target niche audiences at scale will be looking to streaming and OTT companies to fulfill their needs. Savvy advertising teams will be pulling ad dollars away from other channels like social, programmatic, and digital display to invest more into streaming media. Plus, ad-supported OTT streaming models are becoming increasingly more mainstream, presenting prime opportunities for advertisers to acquire premiere ad space to garner audience attention and diversify their revenue. As these streaming media platforms enhance their capabilities with AI and automation of their workflows, their targeting and success rates will increase, making OTT the ideal platform to leverage when expanding marketing channel strategies and a standardized platform to leverage within omnichannel marketing.

[Editor's note: This is a contributed article from Theorem. Streaming Media accepts vendor bylines based solely on their value to our readers.]

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