The CMO’s Guide to OTT Advertising

May 2, 2017 | By PREMION

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.

Jim Wilson, President, Premion

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