Why should your brand care about OTT advertising, especially in SEA?

Since the 1980s, the digital revolution has and continues to evolve the world of business through various ways by changing consumer habits, spearheading innovation in communication technology and the rising expectations for products and services.  One unfolding product of this boom is over-the-top media (OTT), a technology that bypasses cable, broadcast, and satellite television to deliver world class content directly to the consumer – anywhere, and anytime. 

Speaking of time, a survey conducted by Trade Desk on the usage and viewing habits on OTT platforms in Southeast Asia* revealed that the majority of OTT viewers (70%) prefer to tune in between 8pm – 12 am, otherwise known as primetime. 

While this indicates OTT is a strong and direct competitor to traditional TV, it also explains why more advertisers are rushing to move their campaigns to reach consumers right where they are and collect valuable data they otherwise wouldn’t be able to from linear TV. 

This phenomenon is known in the industry as cord-cutting. 

Cord-cutting refers to the pattern of viewers, referred to as cord-cutters, cancelling their subscriptions to multichannel television services available over cable or satellite, dropping pay television channels or reducing the number of hours of subscription TV viewed in response to competition from rival media available over the Internet. 

According to GlobalData’s report, ‘Pay-TV Market Trends and Opportunities in Asia Pacific – 2019’, cord-cutting in developed Asia-Pacific (APAC) is set to offset gains in Direct-to-Home (DTH) and Internet Protocol television (IPTV) in emerging APAC (South and Southeast Asia). 

As a result, the overall region is forecast to witness a marginal decline in pay-TV household penetration from 67.4% in 2018 to 67.0% by the end of 2023. 

OTT advertising is becoming the latest advertisers’ gold mine

Indeed, OTT is growing into a highly effective tool for advertisers as digital consumption proliferates. In Malaysia, as of last year alone, 99.2 % of the adult population owns at least one digital device. It is therefore  not surprising that as the medium follows the consumer even outside their homes, digital engagement continues through content on their phones, often stealing attention from billboards or digital OOH ads. 

According to Dinesh Ratnam, the ​​Country Head (Malaysia, Indonesia, Singapore & Brunei) of iQiyi – the fastest-growing streaming service in Malaysia – OTT platforms give advertisers the insight and freedom to target audience segments based on the type of content they are watching. 

“For instance, a beauty or cosmetics related brand may choose to have their ads run during romance or Korean content, which have a large, predominantly female, audience,” Dinesh explained. “We’ve also worked with some brands who have taken this to another level by also targeting specific scenes in the content, by inserting overlay advertising in scenes when the female characters are putting on skincare or makeup.”

iQiyi is perhaps the most relevant OTT platform when it comes to Asian content and in Malaysia, it has been the  most downloaded OTT app over the last 12 months. This isn’t so surprising when the range of high-quality content found on iQiyi includes original Malay, Korean, Chinese and Anime shows and movies. 

Programmatic video advertising platform, SpotX, recently released a report based on an in-depth research on streaming behaviours in APAC. It revealed that OTT has reached critical mass in APAC as the diversity of the region has enabled it to fully embrace streaming media at levels unmatched by Western markets.

“New consumers are coming online for the first time, and existing ones have increased their content consumption during the pandemic,” said CEO of SpotX, Mike Shehan. “The estimated reach of active OTT viewers in APAC is 392 million people, larger than the population of the United States.’’ 

In terms of racking in revenue, according to the Global OTT TV and Video Forecasts report released by Digital TV Research, ad revenue from connected TV campaigns reached nearly USD 68 billion in 2018 and will reach just over USD 158 billion by 2024. 

Advertisers are increasingly looking to OTT platforms as one of the preferred mediums for brand advertising. When comparing OTT advertising with other forms of video advertising such as YouTube and Facebook, OTT offers a brand-safe environment. 

Since OTT platforms obtain their content from TV broadcasters and film studios who adhere to strict content guidelines, advertisers today, who are extra cautious about their brand’s visibility, are more comfortable pivoting towards OTT advertising.  

Additionally, advertisers also view OTT advertising as a means of getting their ads on the living room screen without the exuberant costs associated with cable tv advertising, reaching a highly engaged segment of viewers known as cord-cutters. Plus, OTT advertising allows for a higher level of measurement which traditional TV advertising is unable to offer. 

As part of this shift, a large majority of this segment is also willing to embrace ads in exchange for free content. For example, in the SEA region, where more than 100 million people use ad-supported OTT platforms, 89% fall within the group that is willing to watch content with ads as a substitute for paying for a service. 

Aware of this demand for flexibility and optionality, iQiyi has, since its launch, operated on a “freemium” model that offers both subscription and ad-based viewing options.

“We want to provide as much flexibility and the best experience to our users as possible and most of our titles are free to watch with ads as we want to maximise reach and viewership and provide full access for our users,” Dinesh said. “VIP (paying) users might have access to these titles in advance of Free users but Free users will still have access nonetheless as we see our free layer as important as our VIP layer.”

While the popularity of streaming entertainment services across the globe continues to grow, local and regional players are seeking to establish themselves as homegrown heroes. iQiyi strives to achieve both goals – to be a truly global service while retaining its credibility as an entertainment leader born-and-bred in Asia combined with a hyper-local approach in each of its unique markets. 

In Malaysia, that means knowing exactly what Malaysians want and being able to deliver that to all users across the nation. 

iQiyi also recently signed a deal with Eversoft in Malaysia to sponsor the Sweet On collection featuring a list of romantic Asian series. “This kind of content sponsorship allows brands to be associated with our most popular dramas & celebrities at maximum cost efficiency. Not only does it help to create brand affinity with premium fan-favorite content, but also allows brands to leverage our own iQiyi marketing efforts too.” says Sukhbir Sidhu, Head of Ad Sales iQiyi Malaysia

By investing more in quality content and productions and rampant expansion to reach local markets, iQiyi has been consistently expanding its local ad sales teams to support the demand in each of the markets, as more advertisers are enlightened by the superiority of OTT advertising. 

*countries include Indonesia, Philippines, Malaysia, Singapore, Thailand and Vietnam