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Consumers Who Watch Mostly Ad-Supported Internet Video Skew Younger, Higher Income (Study)

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).

  U.S. General Population Watch Ad-Supported
OTT Most
Watch Subscription
VOD Most
TV-Only Viewers
Male 49% 60% 46% 44%
Female 51% 40% 54% 56%
18-34 30% 44% 42% 10%
35-54 33% 37% 36% 28%
55+ 36% 18% 21% 61%
White/Caucasian 64% 58% 60% 72%
Black/African American 12% 15% 11% 11%
Hispanic 16% 14% 23% 11%
Asian/Other 8% 12% 6% 7%
$75K+ Income 28% 34% 34% 21%
Married 50% 49% 51% 51%
Kids in Household 41% 51% 51% 26%

Source: IAB and Maru/Matchbox

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.

The IAB report is based on two online surveys, fielded among Maru/Matchbox’s Springboard America online panel. The first was an omnibus survey polling 1,500 nationally representative U.S. consumers on Aug. 10 to determine the profile of ad-supported OTT video viewers; the second surveyed 1,223 U.S. consumers 18 and older with age/gender quotas set to reflect viewership profiles from the omnibus study and was fielded Sept. 25-26, 2018.

The “Ad Receptivity and the Ad-Supported OTT Video Viewer” study is available to download at iab.com/ad-supported-video-ott.

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