By Brian Hunt, Premion, Corporate VP of Business Development
This month, I participated in panel discussions at CableFax’s TV Innovation Summit and the Next TV Summit. At both events, industry leaders convened to share perspectives on our fast-evolving TV landscape. The common discussion theme at both events is that linear TV is still a huge business but the pace of OTT is growing much faster than many anticipated.
In fact, OTT now leads the way in terms of online ad view share, according to a new report from FreeWheel. The report cites that advertising view composition and growth on OTT devices surged 45% year-on-year and it notes that OTT has ballooned from 2% to 32% in a four-year period with heavier investment by publishers and programmers.
Amid the excitement for our transforming TV industry, there is still more education and investment needed to build out advanced capabilities for OTT to truly scale.
Let’s start with how we define OTT. Our industry uses various terms to describe the targeting of a video advertisement to someone watching TV over the Internet. Is it OTT, cord-cutters or Connected TV? While all three terms are correct and used interchangeably, they have subtle differences.
- OTT or Over-the-Top is an FCC term that refers to how consumers receive their primary video signal meaning that it’s ‘over the top of the cable/MVPD plant.’
- Cord-cutters is an industry term used to describe consumers who once were cable subscriber and now have decided to get their primary video signal(s) via the Internet, so they have ‘cut the cable cord.’ And according to Moffett Nathanson analyst Craig Moffett, cord cutters spoke loudly in the first quarter cutting 762,000 cable subscriptions.
- Connected TV is more of technical term used by advertisers, content owners and video ad serving companies to define ads that run on smart TVs or Internet-enabled devices that deliver TV programming and advertising.
So while there’s no right definition, there is a right path forward for driving growth in OTT. Here’s what to watch for in the advancement of OTT advertising.
IP delivery of advertising offers greater opportunities for targeting – IP delivery of content is increasing exponentially, which means that the ability to have digital-like targeting via IP delivered ads is going to increase. Both Nielsen and comScore are actively working on their measurements in this new world. Unlike digital advertising, the key difference is that Connected TVs do not have cookies. This means that the targeting must be done via tags to IP addresses.
Solving the complexity for advertisers to reach cord-cutters in local DMAs – The increasing fragmentation of media and our OTT networks makes it hard for advertisers to reach the right local audiences. There needs to be a simpler way for aggregating disparate OTT inventory in local DMAs. We are helping to address this issue at Premion with our demand-side OTT ad platform. We’ve aggregated OTT ad inventory from leading OTT providers and top content owners and we’re offering this in local DMAs to advertisers.
Ad supported OTT services are growing and thriving – The future of television will be over the Internet and it will be ad-supported. With more premium video content being made widely available across platforms, more ads are being served through Connected TV apps and OTT devices. Just look at the growth of Sony’s Crackle or TubiTV, which recently touted that its audience grew by a 9x growth rate in monthly active users in 2016.
OTT is clearly solidifying its position with advertisers in their media plans. We are excited to be collaborating with our partners to lead the industry forward. We’re investing in new capabilities to improve standardization and deliver advanced targeting and engagement for our advertisers.
by Jim Wilson, President of Premion
LinkedIn, May 2, 2017
To drive the growth engine in today’s fast-changing world, CMOs must keep pace of the rapidly evolving channels and technologies to engage audiences that are multiplying at a lightning pace across platforms and devices. Forward-looking CMOs are paying greater attention to the rise of over-the-top (OTT) audiences, which has emerged as the fastest-growing segment of video advertising views.
TV viewing has entered its sixth evolution with OTT
In our ‘place-shifting’ era, consumers pick a device, connect to the Internet and consume OTT content anywhere and at anytime they choose. According to The Diffusion Group (TDG), 78 percent of households have OTT subscriptions and they’re spending more time watching OTT than ever before.
NBC’s latest announcement to expand OTT with local affiliates further validates the ‘mainstreaming’ of OTT. Another study by Level 3 suggests that within the next five years, viewership hours of live-linear streaming OTT video could surpass those of traditional broadcast TV.
According to Nielsen, more than 60 percent of OTT viewers prefer to watch long-form and live-streaming content on a big screen. And it’s not just millennials. More than 60 percent of OTT viewers are age 25 to 54 years old – that’s more than 90 million viewers (source: eMarketer).
While consumers are clearly spending more time watching OTT, advertising on OTT is still a new, emerging frontier. So how can marketers keep up and make sense of it all?
OTT offers untapped potential but it’s highly fragmented
OTT blends the attribution of TV advertising with digital media’s precision, but it’s still the Wild West. OTT advertising is highly fragmented; some OTT ad inventory is sold as part of big upfront TV packages alongside traditional cable and broadcast ad time. Some inventory is sold by OTT service providers and platforms like Sling or Roku. And in some cases, these ads are purchased through ad tech middlemen, or programmatically.
So what does it take to shift more ad dollars to OTT advertising? It begins with helping advertisers and marketers navigate the highly fragmented space through a simplified buying process for OTT.
Our roadmap for effective, simplified OTT media buying
Don’t limit your reach – To effectively reach the rapidly growing local and regional audiences that are no longer viewing traditional linear TV requires working with many OTT providers. You can get rid of the fragmentation headache by picking a partner that will streamline your media buy across multiple OTT providers and platforms in one seamless transaction.
Reach premium audiences at scale – Reaching premium audiences is the best approach for brand safety and we should make it easy for advertisers to buy premium media at scale. Buying ad inventory on premium content on OTT platforms such as Premion addresses brand safety, viewability and fraud. You want to ensure that your ads run on trusted networks with authenticated viewers.
Expect transparency – Take control of your brand and work with partners who can provide you with the confidence to know exactly where your ads will appear. While some providers tout low CPMs, they are adding a significant amount of short-form advertising products into the mix, including user-generated content, to keep costs down. If you want brand-safe long-form premium content, be wary and ask questions.
These are exciting times for OTT — both for consumers and marketers. Consumers have much more TV viewing choice and control. And marketers that leverage smart OTT buying strategies in their media plans will reach more engaged and relevant audiences.
by Jim Wilson, President of Premion
LinkedIn, April 21, 2017
As we head into this year’s NAB Show, there’s never been a more exciting time for the growth and investment in the future of OTT (over-the-top) content, advertising and related services.
Latest ComScore data reveals that more than 49 million homes — 53 percent of U.S. Wi-Fi connected homes — accessed at least one OTT service. Moreover, these households were active in viewing OTT content, doing so an average of 19 separate days during the month, and for 2.2 hours per usage day.
It’s also not just millennials. More than 60 percent of OTT viewers are age 25 to 54 years old – that’s more than 90 million viewers (source: eMarketer).
While we’ve reached a tipping point for OTT as more consumers are either cutting the cord or migrating away from traditional linear TV, we’re just scratching the surface with OTT advertising. It’s still a new, emerging frontier. According to Forrester, 2017 could be the year for OTT advertising.
For now, advertisers and marketers need help to navigate the highly fragmented space through a simplified buying process for OTT.
At NAB, we’ll be hosting our panel session: TEGNA Presents: Future of OTT Advertising: Meeting Customer Expectations with Advanced TV Experiences.
Our panel will feature innovators from Premion (Tegna OTT), Pluto TV, MadHive, ColorTV and CitySpark, who will share insights on OTT advertising strategies, monetization of content for OTT, how to meet customer expectations and the importance of data in Advanced TV experiences.
Our session will address:
- What strategies should advertisers adopt to reach this rapidly, growing audience?
- What’s the most effective ways and what kinds of campaigns work best to reach cord cutters and those migrating away from traditional linear TV?
- What are the challenges this fast growing segment faces as it scales?
If you’re attending this year’s NAB, I invite you to join us at our session on Tuesday April 25th @ 12:30pm for an engaging discussion on the future of OTT advertising.
by Jim Wilson, President of Premion
LinkedIn, April 4, 2017
The mass exodus of YouTube by advertisers could cost Google as much as $750 million in revenue, according to analyst estimates. And with global digital ad spending reaching $195 billion last year (source: eMarketer), there is simply too much money and risk involved to gamble with user-generated content (UGC) or questionable content.
Advertisers should be focusing on brand-safe media, especially when it comes to video. And they should be paying attention to the rise of over-the-top (OTT), which is emerging as the fastest-growing segment of video advertising views. According to The Diffusion Group, OTT ad revenues are forecasted to rise to $31.5 billion by 2018 from $8.5 billion in 2015.
The YouTube controversy also highlights the challenges with programmatic advertising. While automated media buying offers tremendous efficiencies, ad platforms need to invest in more human oversight to police content more thoroughly to avoid the costly mistake of having ads end up appearing next to offensive content that’s detrimental to an advertiser’s brand. Given the size and scope of advertiser spending on YouTube, it’s unacceptable to blame the volume of video uploads for not having adequate review policies in place.
Advertisers deserve stricter assurances on where their ads will appear as brand safety is of utmost importance in maintaining brand integrity. As advertisers evaluate the effectiveness and ROI of their media buying in brand-safe environments, here’s my take on the top three considerations:
Focus on premium long-form OTT content – Reaching premium audiences is the best approach for brand safety and we should make it easy for advertisers to buy premium media at scale. Buying ad inventory on premium content on over-the-top (OTT) platforms addresses brand safety, viewability and fraud. You want to ensure that your ads run on trusted networks with authenticated viewers.
Demand greater transparency – Advertisers expect to have control of their brand and they need to know exactly where their ads appear. While some providers tout low CPMs, they are adding a significant amount of short-form, non-branded advertising products into the mix, including user-generated content, to keep costs down. If you want brand-safe long-form premium content, be wary and ask questions.
Enhance consumer experience with fewer, more relevant ads – Too often, consumers are bombarded with irrelevant (and repetitive) ads on their various apps and devices. The OTT and on-demand environment offers advertisers a far more targeted audience, where viewers see fewer, more relevant ads. To address repetitiveness, we need to strike the right balance between frequency capping not just on shows but on providers and networks. Furthermore, the emergence of precision audience targeting in OTT will further yield greater efficiencies in reach and relevancy.
The future of advertising is about reaching premium audiences. In our ever-increasing ‘place-shifting’ era, where consumers pick a device, connect to the Internet and consume OTT content, advertisers need trusted partners who are committed to transparency and deliver greater ad relevancy so that consumers will enjoy engaging in brand experiences.