Advertiser’s Guide to the OTT & CTV Landscape – Part Two
Understanding the continuously evolving landscape for over-the-top video and connected TV remains crucial for brands. Why? Brands need to reach consumers where they are spending time. And as traditional cable television utilization continues to decline, the increasingly common solution is via streaming services.
However, this is easier said than done. When planning campaigns that incorporate streaming services, there are two key considerations:
- Picking the right streaming service. With many streaming services either being entirely ad-supported already or set to offer an ad-supported model soon, there are a lot of options. So, to ensure campaign dollars are efficiently spent, marketers must effectively leverage various streaming services to engage with consumers, reach campaign objectives, and drive business results.
- Evaluating media buying options. Marketers can either buy placements directly through a partner (whether site direct and/or managed service) or programmatically through an internal display platform. The decision ultimately comes down to a brand’s objectives and what’s doable within the campaign parameters.
Let’s unpack this.
1. Picking the right streaming service(s)
Although there are a wide variety of streaming services available, a handful of them have the largest user base and therefore attract the most budget for advertising campaigns. According to Statista, five streaming services — Hulu, YouTube, Roku, Tubi, and Pluto — have dominated ad investment in recent years, although network-specific streamers (think Peacock & Discovery+) as well as Netflix are looking to disrupt this space.
Running ads on CTVs is becoming increasingly fragmented. This means marketers must consider broadening their streaming portfolio, instead of risking becoming siloed by using only one streaming service in the space. By solely implementing a lone Hulu buy, it will limit the potential reach and awareness results that brands require for a successful campaign. To select which streaming services are the best fit for a given campaign, we evaluate each platform’s current footprint, user base, consumer experience, and ad offerings. This not only uncovers alignment between platform and target audience, but will eventually ensure we allocate budget effectively to maximize campaign success.
The largest streaming services
The streaming services below fall into AVOD (advertising video on-demand), FAST (free ad-supported TV), SVOD (subscription video on-demand), and vMVPD (virtual multichannel video programming distributor) categories. Below, we compare and contrast the competitors.
- Hulu (owned by Disney): This platform has a current monthly subscription user base of 100 million, but only 62% watch with ads (equating to roughly 62 million individuals). This platform can be considered either SVOD or AVOD, depending on what subscription model a user has, but “regular” Hulu is all on-demand. Hulu + Live TV is an vMVPD that completely passes through the linear television channels, so even a direct buy with Hulu will not appear on Hulu + Live TV. Keep in mind that the media cost depends on the various paid subscription levels.
- Tubi (owned by Fox): With a current monthly user base of 56 million, Tubi is primarily an AVOD, with most of their movies and shows being on-demand. Tubi does have live channels (that aspect being FAST), but no linear pass-through (making it more akin to Pluto TV than YouTube TV). An easy way to understand it: Tubi is a completely free Hulu (as 73% of Tubi streamers are not on Hulu). This provides a huge opportunity to reach a large audience in conjunction with or separate from (depending on budget and campaign goals) another streaming service such as Hulu.
- YouTube TV (owned by Google): YouTube TV is an vMVPD, which means it provides a way to watch “regular” television channels for its five-to-eight million subscribers. It includes both the linear TV “pass-through,” along with spots reserved for Google. This streaming service offers a subscription cost model to use their services.
- fuboTV (owned by fuboTV): This subscription cost model currently has 1.1 million subscribers, with three million monthly active users. fuboTV works similarly to YouTube TV as it provides a way to watch “regular” TV channels like you would on a cable box without cable/satellite. fuboTV offers a wide selection of live sports, more than other streamers, which can be an important differentiating factor when evaluating which services align with your brand.
- Sling (owned by Dish Network): Sling has a user base of 2.4 million subscribers and the cost structure reflects various subscription levels. Sling works like a vMVPD; however, despite being one of the first to market in 2015, it now falls behind competitors for usage. That said, it can be a good fit for programmatic ad buys.
- Pluto TV (owned by Paramount): Pluto TV has one of the larger monthly user bases at 70 million (even more than Hulu) as a cost-free streaming service. It offers live channels, but not the same versions that users would see on their paid cable subscription. This FAST service is available on all devices, regardless of TV manufacturer — this is a big differentiator in terms of ease of accessibility. Furthermore, both Samsung TV Plus and Vizio WatchFree+ even utilize some Pluto channels.
- Samsung TV Plus (owned by Samsung): A cost-free streaming service, Samsung TV plus has 16 million active users. It offers live channels, but not the same versions you would see on your paid cable subscription (for example, “LiveNOW from Fox” rather than Fox News channel). The channels are either specific to the platform or available on other FAST streamers (also offers VOD titles). It is important to keep in mind that Samsung TV Plus is only available on Samsung devices and its website.
So, how do you pick?
This ability to evaluate each streaming service against a brand’s goals is key to success within this landscape. Ultimately, the biggest differentiator between each platform is their audience, as each streaming service caters to a slightly different group. For example, if a brand wants to reach a sports audience, exploring Fubo would be a great option given the platform’s extensive selection of live sports. Pluto TV, one of the largest streaming platforms, is a prime option for a client who prioritizes reach as it can be accessed on any device, which increases the potential audience pool.
2. Evaluating media buying options
Once you’ve identified which streaming services are the best fit, the next decision comes down to the buying method. As we stated above, there are two options:
- A direct buy is focused on a singular website and/or piece of content, and is beneficial if the target audience frequents that site or is closely aligned with that content.
- Buying inventory programmatically through an internal trade display platform(s) such as The Trade Desk is a more audience-focused approach, as it follows the target audience across the various sites and content they are viewing.
Within streaming services, both methods can be cost effective and provide marketers access to quality inventory on a broad scale. Another factor in deciding which streaming platform makes the most sense is the cost between them, which can vary depending on buying directly or going through an internal display platform. Audience should be the primary determining factor in the direction a media campaign should go, but ultimately, it comes down to availability and budget. Regarding budget specifically, comparing CPM between going direct and going through an internal trade desk, such as The Trade Desk, should be evaluated to determine what provides the most ROI to hit campaign objectives.
What marketers need to know
Ultimately, success in this landscape isn’t based on the streaming services themselves, but on the audience targeting level and scalability required to achieve the desired campaign results. A standalone buy on a single streaming service will likely get lost in the shuffle. Marketers must increasingly understand not only the key players in the landscape, but how each service’s various campaigns can drive their business forward to ensure goals are met and ROI is maximized.