Changing the channel: Use data to leverage potential of OTT in Southeast Asia

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With 2020 seeing a global rise in OTT (over-the-top) penetration, such platforms represent a promising channel for advertisers. Yet, without access to detailed viewership data in the region, the extent of opportunities has been poorly understood.  

At a panel hosted by Campaign Asia and The Trade Desk, Eugene Yap, Kantar’s head of digital consulting southeast Asia, and Jennie Johnson, senior director of marketing, Southeast Asia, Australia and New Zealand at The Trade Desk, discussed the findings of a new report, commissioned by The Trade Desk and produced by Kantar, which offers insights into regional OTT growth. 

“We knew OTT viewership was on the rise, but when we talked with agencies and advertisers we found low awareness of the size of the opportunity,” says Johnson of the imperative behind the report.

Unsurprisingly, Covid-19 has had a marked impact on OTT growth in 2020. 

According to the report, around 180 million people now spend 8 billion hours every month on OTT in Southeast Asia. 

“We see from the data that 60% of OTT viewers have increased their viewing time as a result of the pandemic,” says Yap. “We see anywhere between 65%-80% of viewers expecting to maintain or increase their viewing time within the next couple of years.” 

In the longer term, improving connectivity across the region, 5G, and lowering costs of mobile data and broadband, will all continue to support the demand for media streaming, bolstered by a groundswell in new users in the region. “There will be 50 million middle-class consumers coming on board in the next five years,” says Yap. 

This demand will drive more creative content. “OTT network players spent around US$2.7 billion in content in 2017, and that is expected to double or even triple in the next couple of years,” Yap adds.

The report also highlights just how popular local content is – especially in Thailand and Vietnam, where local content is more popular than Hollywood blockbusters and highly-rated Western programming.

While consumption of OTT mainly takes place on mobile across Southeast Asia, there’s a shift in viewership underway, with 80% of viewers looking to enjoy content through multiple devices, including smart TV. 

“People are using platforms that often offer a hybrid of ad-supported and subscription options,” says Johnson. “It’s a huge opportunity, but there are a lot of players, and it’s very fragmented.”

This fragmentation presents an opportunity and a challenge for advertisers and OTT players, with consumers expecting greater diversity across devices and business models. 

However, while one in five OTT viewers say they have not watched traditional television in the last three months, the growth in OTT does not necessarily represent a total shift of demand. Yap highlights that many respondents enjoy television as a more social activity, alongside friends and family.

“We see 43% of OTT viewers in the region are 35 and below,” says Yap. “At the same time, 30% on average are 55 and above. So the appeal is very broad across different age groups. Given the factors growing both types of media consumption are quite different, we expect them both to co-exist in the coming years.”

Johnson says that buying programmatic, compared to buying direct, allows advertisers to better build reach and avoid duplication across the audiences. “Programmatic campaigns can offer a lot of flexibility and the ability to pause or move budgets to other channels as you build reach, mid-campaign if necessary,” she adds. “If you’re buying programmatically, you don’t have to buy context at all; you can buy based on your audience.” 

While the reality is television is not going to vanish tomorrow, it’s clear a “TV-plus” strategy is needed for advertisers to stay ahead of the curve and leverage OTT to drive incremental reach. This is even more important while platforms are still relatively nascent and offer better ROI.

“Digital drives convenience, and it drives on-demand,” concludes Johnson. “This is relentless logic, from a consumer point of view. People need to get ready – the writing is on the wall. Don’t wait for the dust to settle before you figure this out.”

For more insights, watch OTT in SEA: streaming and the future of TV.