Study: Consumers Who Watch Ad-Supported OTT Are Younger, Higher Income

It turns out there’s a large group of Americans who don’t watch just Netflix or other ad-free video services: 45% of consumers who regularly watch video online say they mainly watch ad-supported over-the-top services.

That’s according to a new study from the Interactive Advertising Bureau. The online-advertising trade group’s research also found that the largest audience segment of ad-supported OTT viewers comprises adults 18-34 years old, and on average they have higher incomes than the overall U.S. population (with 34% of ad-supported OTT viewers reporting income of $75,000 or more).

In addition, consumers who mostly watch ad-supported OTT services skew higher among men; black and Asian consumers; and households with children, the IAB study found.

As a cohort, ad-supported OTT viewers are harder for advertisers to reach through conventional TV (while pure subscription-based video-on-demand services like Netflix, Amazon Prime, or HBO Now do not carry advertising). On average, primarily ad-supported OTT viewers watch 10.4 hours of cable TV per week versus 14.7 hours among TV-only viewers. Meanwhile, about 52% of ad-supported OTT viewers are cord-cutters or cord-shavers, with over one-third citing “better content on streaming services” as a reason for choosing ad-supported OTT over other services.

IAB released the findings at its inaugural NewFronts West advertising event in L.A., which runs Oct. 9-10. Sue Hogan, the trade group’s SVP of research and measurement, said the study points to “the high value that brands should place with increased investment in ad-supported OTT.”

The IAB’s study defined ad-supported OTT video viewers as those who watch video through a free streaming service with ads (such as YouTube, Pluto, the Roku Channel, Crackle or Vevo); via an online pay-TV provider (e.g., Sling TV, DirecTV Now); through a streaming app that requires a cable, satellite or telco login (e.g., Discovery Go, FX app, WatchESPN, Comcast Xfinity); or through a subscription-streaming service that includes ads (e.g., Hulu or CBS All Access with limited ads).

The IAB study also found that the predominantly “ASV OTT” cohort showed higher ad receptiveness than those who mostly watch SVOD or only watch TV — which is not surprising, but a key point for marketers. About 59% of ASV OTT users agreed that “I don’t mind seeing ads if I’m getting to watch content when I want,” compared with 47% of primarily SVOD viewers and 34% of TV-only viewers.

In addition, ad-supported OTT viewers reported spending more on online subscription purchases — $119 per month — than subscription VOD viewers, at $89 per month. ASV OTT fans also are more likely to follow social influencers: 25% said they regularly watch videos from YouTube personalities, vs. 17% of SVOD-dominant consumers and 5% of TV-only viewers.

read more here: variety.com