Over-the-top video is becoming the norm among consumers. People are cutting their cable cords and taking down their satellites in favor of by a Smart TV or plugging in a Roku (or Roku-like) device. But despite the rapid adoption from consumers, many advertisers are still hesitant to put serious cash into advertising through OTT Platforms.
According to a study commissioned by SpotX and conducted by Kagan, a media research group within S&P Global Market Intelligence, only 11% of advertisers are spending 21-40% of their advertising on OTT platforms. Seventy-eight percent of respondents ranked data security and measurement as the primary challenges in adopting audience-based buying of ads.
However, the percentage of advertisers spending a considerable amount on advertising through OTT platforms is expected to more than quadruple in two years, with 67% of advertisers expecting to have OTT ad spending in the 21%-40% range.
Among those advertisers, 44% said they expect to see an 11% to 20% increase in return on advertising spending by moving from traditional ad buying to audience-based buying, with 33% expecting a 6% to 10% increase.
“OTT enables precise identification of viewing households, providing highly granular audience segmentation for targeted advertising,” says Ashwin Navin, co-founder and CEO of Samba TV, the world’s leading TV data and analytics company. “As the industry moves more towards audience-based buying, OTT will increase in importance as an efficient way to reach desired targets, and this report from SpotX sheds light on how the industry is thinking about OTT ad strategies.”