Case Study | Design Phase
OTT CONCEPT DESIGN
Senior Product Design & Interactions
Industry Type: Streaming Marketing
Background
FLIX is a OTT service application that allows users to easily interact, shop, share and purchase advertised products and services during streaming episodes and product details.
Pain points: Many users are frustrated with advertising on streaming platforms. There are many features users don’t want to use and many features users find frustrating and confusing to interact with. FLIX objective is to offer functionality that allows user to purchase and interact with advertised offers to have an easier and more intuitive experience.
Design a new approach to generating advertising revenue using the OTT streaming model.
Create a platform model which offers users a simple way to off advertising to streaming customers.
OTT (Over-the -top) Monetization of Streaming Content
OTT streaming delivers video or audio content over the internet and can be pay-to-access or free-to-access. While many OTT platforms use paid subscriptions, others rely on ads or combine both models. Some offer tiered options, allowing users to choose between free access with ads or an ad-free experience for a fee.
OTT monetization methods
Ad-supported: Content is free, and revenue is generated through paid ads displayed within the content.
Subscription: Users pay a recurring fee for on-demand access to a content library.
Transactional: Users can pay a one-time fee to access specific content.
Premium: Users can pay a premium fee for early or exclusive access to specific content.
Hybrid: Use of multiple of the above monetization models in tandem.
Commonly referred to OTT service is video streaming. Netflix, Amazon Prime, Disney+, Hulu, and YouTube are OTT providers in the video streaming space.
Source: Wurl, CTV Trends Report
Website: Concept Prototype
Quantitative Research > Competitors Site Analytics
·Documentation > Statistics > Use Cases > Word & Excel
Diagram > Personas
Adobe XD > Wireframes & Prototypes
Research, Competitors and Analytics: Measuring user interactive models and placement
Measuring view-through attribution (VTA) and click-through rate (CTR) helps marketers combine engaging content with modern tools to track and quantify impact.
OTT targeting uses data and analytics to understand viewers and deliver ads tailored to specific audiences. Contextual advertising, ensures ads reach the right people at the right time, boosting campaign effectiveness in online streaming.
HOV - Average daily user hours of viewing (HOV) measures the total amount of time a typical user spends watching CTV each day.
Several factors can influence the effectiveness of ad conversions on OTT platforms:
Targeting Capabilities: Platforms offering advanced audience segmentation and targeting can enhance ad relevance, potentially leading to higher conversion rates.
Ad Formats and Placement: The type and timing of ads (e.g., pre-roll, mid-roll) can impact viewer engagement and conversion likelihood.
User Engagement Levels: Services with highly engaged audiences may provide better environments for ad conversions.
Measurement and Analytics: Access to detailed performance metrics allows advertisers to optimize campaigns effectively.
Research: What OTT services offer ad placement?
Netflix: In 2019, the average U.S. adult spent approximately 53.3 minutes per day watching Netflix.
Hulu: In 2017, Hulu reported that its users streamed over 6 billion hours of content. With 20 million subscribers at that time, this averages to about 0.82 hours (49 minutes) per day per user. While this data is from 2017, it suggests a similar or slightly higher engagement level in subsequent years.
Disney+: Launched in November 2019, Disney+ quickly gained popularity, but specific average daily viewing hours per user for that year are not readily available.
The average daily user hours of viewing (HOV) for Connected TV (CTV) increased significantly from 2015 to 2019, reflecting the rapid adoption of streaming services and the shift away from traditional cable TV.
2015: Around 1 hour per day on average, as CTV was still gaining traction.
2016: Increased to 1.5 hours, driven by growing platforms like Netflix and YouTube.
2017: Reached 2 hours, with more households adopting streaming devices like Roku and Amazon Fire Stick.
2018: Rose to 2.5 hours, fueled by the introduction of new services like Hulu Live and YouTube TV.
2019: Averaged around 3 hours, as services like Disney+ launched, and streaming solidified its place in daily entertainment routines.
OTT Content Personalization features
Several features can improve ad interactions on streaming platforms, making them more engaging and less intrusive for users. These include:
1. Personalization
Tailoring ads based on user preferences, viewing habits, and demographics increases relevance and engagement.
2. Interactive Ads
Allowing users to engage with ads directly, such as clicking for more information, playing games, or completing surveys, creates a two-way interaction.
3. Ad Choice Controls
Providing users with options to skip ads, select ad categories, or choose between ad formats (e.g., video, static) increases satisfaction and engagement.
4. Ad-Free Upgrade Options
Offering tiered subscriptions where users can opt for ad-free experiences or limited ads gives viewers flexibility and control.
5. Seamless Integration
Ads that blend naturally into the content, such as product placements or sponsored recommendations, feel less intrusive.
6. Shorter Ad Formats
Using shorter ads (e.g., 6-second or 15-second spots) respects user time while delivering a concise message.
7. Reward-Based Ads
Offering incentives for viewing ads, such as discounts, free content, or extended viewing privileges, motivates users to engage voluntarily.
8. Clear Call-to-Action (CTA)
Ads with clear, actionable CTAs (e.g., "Click here for more" or "Scan to learn more") make it easy for users to interact with offers.
9. Enhanced Ad Metrics
Providing feedback or visible progress bars for ad completion helps users feel in control.
10. Cross-Device Synchronization
Allowing users to interact with ads across devices (e.g., scanning QR codes from TV ads on their phones) improves accessibility and engagement.
Competitive Analysis
OTT Advertising Feature Comparison
Along with conducting user research, I also did a competitive analysis of other apps and services. I included Netflix, which dominates the streaming market. I also included Amazon Prime, and Hulu.
Over-the-top (OTT) streaming services have transformed media consumption, offering viewers greater control over content selection and viewing schedules. This shift has led to the integration of advertising into streaming platforms, prompting varied viewer sentiments.
Viewer Preferences and Acceptance
A significant portion of viewers prefer ad-supported streaming options to reduce subscription costs. In Australia, for instance, the adoption of advertising-based video on demand (AVOD) services more than doubled over a year, with 12.5% of streaming households subscribing to AVOD by early 2024, up from 5.6% the previous year. – The Australian
Ad Tolerance and Engagement
Viewer tolerance for ads is influenced by factors such as ad frequency, relevance, and integration. Platforms like Amazon Prime Video have increased ad loads, allowing more brands to advertise, which has been met with mixed reactions. While some viewers accept ads for cost savings, others express frustration over increased interruptions. – Financial Times
Impact on Subscription Choices
The availability of ad-supported tiers has influenced subscription decisions. Netflix's introduction of a lower-priced, ad-supported plan led to 45% of new subscribers opting for this tier, indicating a willingness to accept ads for reduced costs. – The Wall Street Journal
Viewer Frustrations
Despite cost benefits, some viewers express dissatisfaction with the increasing number of ads. Roku users, for example, have reported frustration with the rise of "shoppable" ads, viewing them as intrusive and detracting from the viewing experience. – The Sun
Conclusion
Viewer sentiment toward streaming advertising is multifaceted. While many are open to ad-supported models for cost savings, the nature and frequency of ads significantly impact user satisfaction. Platforms must balance monetization strategies with viewer experience to maintain engagement and satisfaction.
Personas and Empathy Maps
User Interview Questions: Understanding the Impact of Ads on Viewer Retention
To confirm how OTT viewers feel about their advertising experience, a research plan was created. The goals of the research were to answer the following questions:
General Viewing Preferences
What factors do you consider most important when choosing a streaming platform? (e.g., cost, content library, ad experience)
How often do you watch content on ad-supported streaming platforms?
Do you currently subscribe to an ad-free or ad-supported tier of any platform? Why did you choose this option?
Perception of Ads
How do you feel about seeing ads while streaming content?
What types of ads (e.g., length, format, relevance) do you find most acceptable while watching content?
Can you recall an instance where an ad felt intrusive or disrupted your viewing experience? How did it affect your perception of the platform?
Ad Relevance and Targeting
Do you find the ads shown on your preferred platform(s) relevant to your interests or needs? Why or why not?
How do you feel about platforms using your data to personalize ads? Does this make the experience better or worse?
Ad Frequency and Duration
How do you feel about the number of ads you see during a typical viewing session? Is it too much, too little, or just right?
What’s your ideal length for an ad in the middle of your favorite show or movie?
Would you prefer fewer, longer ads or more frequent, shorter ones? Why?
Ad-Supported vs. Ad-Free
If you currently use an ad-supported plan, would you consider upgrading to an ad-free tier? Why or why not?
If you currently use an ad-free tier, what would make you consider switching to an ad-supported plan?
How important is cost savings when deciding between ad-supported and ad-free streaming options?
Retention and Loyalty
Have you ever canceled a subscription because of the ad experience? If yes, what specifically led to this decision?
What would encourage you to stay with a platform despite the presence of ads?
Are there any features (e.g., ad-skipping, rewards, customization) that would make ads more acceptable to you?
Overall Experience
How does the overall ad experience impact your likelihood of recommending a streaming platform to others?
If you could improve one aspect of the ad experience on your favorite platform, what would it be?
To answer these questions, the methodology consisted of first sending out a survey and then conducting in-person interviews. The survey received over 50 responses and I conducted 6 in-person interviews.
OTT viewers' sentiments on streaming advertising.
Results of OTT Advertising Sentiment Analysis
Results of OTT Advertising Sentiment Analysis
Viewer Preferences and Acceptance:
Adoption of AVOD (ad-supported video on demand) in Australia more than doubled within a year, increasing from 5.6% to 12.5% by early 2024. (Source: The Australian)
Ad Tolerance and Engagement:
Mixed reactions to increased ad loads on platforms like Amazon Prime Video:
Some viewers accept ads for cost savings.
Others express frustration over frequent interruptions. (Source: Financial Times)
Impact on Subscription Choices:
Netflix’s introduction of an ad-supported plan led to 45% of new subscribers opting for the lower-cost tier, indicating a willingness to tolerate ads for financial savings. (Source: The Wall Street Journal)
Viewer Frustrations:
Roku users report dissatisfaction with "shoppable" ads, describing them as intrusive and disruptive to their viewing experience. (Source: The Sun)
