OTT advertising: Compared with scale, we should pay more attention to the rise of living room consumption scenarios

As an emerging advertising channel, the scale of China's OTT advertising is not surprising, but the annual growth rate of several times still makes the advertising industry smell the scent of new opportunities.

In 2017, China's OTT advertising market grew by nearly 2.5 times, reaching a scale of 2.5 billion yuan. It is expected that by 2019, the advertising revenue of the entire OTT market will exceed 10 billion yuan.

Companies such as Baidu, Alibaba, and Tencent have also been investing in smart TV terminals, with investments often in the billions, making BAT active participants in the OTT advertising industry.

Compared with the annual output value of China's advertising industry, which is close to 700 billion, OTT still seems very small, with a market size of 2.5 billion last year. So, what touched the nerves of BAT and made them want to actively participate in the OTT advertising industry?

It is believed that compared with the huge scale, more profound changes are quietly taking place: because of the rise of living room consumption scenarios, the OTT advertising model is slowly affecting people's consumption habits.

OTT is full of young consumers

Throughout 2017, China's TV sales showed a downward trend. However, according to the Aowei report, in 2017, China's daily active OTT terminals reached 62.3 million, and the number of terminals in use exceeded 168 million, an increase of 30% compared to 2016.

Fewer people are buying TVs, but more are watching TV. From these two data, it is not difficult to see that some people are returning to the entertainment method of home TV. What kind of audience is returning to the TV terminal camp?

The answer is of course young people who have been using mobile phones and PCs. And there is only one reason for them to return: the current OTT streaming videos can meet their needs for watching the latest high-quality content.

According to statistics, in 2017, the total amount of OTT content resources across the entire network reached more than 58,000, which is 27 times that of traditional TV content.

So, those young people who were unwilling to watch traditional TV and went to watch entertainment programs on computers and mobile phones, returned to the TV with the rise of OTT.

This group of young people happen to be the consumers with advanced consumption concepts, consumption desires and purchasing power.

Huge consumption potential of living room scenes

More and more young users are using smart TV terminals, and OTT streaming companies also have more and more high-quality active users.

With a huge terminal guarantee and a fixed viewing population, it will occupy a larger share of the video market compared to mobile and PC.

According to statistics, in 2016, OTT accounted for 10%-15% of the traffic on multiple screens; it is expected that by 2019, its share of traffic will rise to 20%-30%.

Where there is traffic, there is naturally a market. Advertisers have therefore turned their attention to this emerging OTT advertising market. This is when the advantages of TV advertising are demonstrated.

1. Compared with TV, PC and mobile terminals provide a small-screen viewing experience, and the visual stimulation and sense of immersion are not as strong as those on TV.

2. For ads placed on PC and mobile terminals, the viewing scene is mostly outdoors, or in open or semi-enclosed environments such as offices. However, ads placed on TV terminals are targeted at families, and users watch ads at home, which forms a closed space.

The large-screen experience coupled with the closed space environment, coupled with the long duration of OTT streaming media viewing, has resulted in targeted advertising on TV to young people with the greatest spending power.

Compared with PC and mobile terminals, this type of advertising is more stable and private. Consumers' psychological needs are more transformed from their own needs to the needs of their families, which can make people more motivated and want to consume.

The development of the OTT advertising market is activating young people's consumption model centered on family needs, while extending the living room scene to consumer needs.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.