The proliferation of content options across platforms, screens, and devices, and the continued splintering of audiences brings increasing fragmentation woes for marketers. If you’re a national brand, local relevance is becoming all the more important. It requires honing the ability to personalize and localize messages and consumer experiences with contextually, dynamic and relevant content.
Today, national brands face a number of challenges.
Beyond navigating the continued consumer and channel fragmentation, they need insights at a national to local level to efficiently reach the right audience. Most often, the impression distribution of national footprints is naturally skewed, leaving gaps in harder-to-reach markets.
As such, brands are seeking more effective ways to reach local audiences and drive business outcomes. BIA Advisory estimates national brands will spend $62.7 billion in 2019 to target local consumers.
At the same time, we’re witnessing a dynamic local-media marketplace flourishing with the growing adoption of addressable over-the-top (OTT), in addition to an explosion in streaming TV offerings and inventory by station operators, publishers and virtual multichannel video programming distributors (vMVPDs).
For this upfront season, over-the-top (OTT) advertising is at the top of the “transformation” agenda for the TV industry. In fact, connected TV (CTV) and OTT advertising is expanding at the fastest rate of any major medium and will reach $4 billion this year and $5 billion next year, according to Magna’s latest forecast. Even with this rapid growth, OTT ad spending is still catching up with consumption — it’s just 3% of TV ad budgets.
To win over advertisers, we’re witnessing a battle brewing at the agency level — people are vying for marketers to shift budgets to CTV and OTT. Many traditional TV buyers have renamed themselves as “video investment” teams, and digital buyers are emphasizing their audience targeting, measurement and attribution prowess to stake the vast, growing CTV opportunity.
As the competition rages on between the media giants and the distribution platforms to grow their direct-to-consumer (DTC) streaming offerings, the OTT ecosystem is becoming ever more complex and fragmented, which makes the buying experience even more confusing for advertisers. Compounding the market confusion is the rise of new entrants that claim to do the same thing but are executing differently. Advertisers need a checklist to truly understand what they are getting.
We’re thrilled to kick off our Beet TV video series titled – The Next Big Thing for Advertisers: The Growth of Direct-to-Consumer Streaming.
Over the next several weeks, Beet TV will be featuring industry leaders from major agencies, publishers and technology partners in a video interview series focused on the emergence of OTT as an advertising platform. The episodes will explore topics such as the growth opportunities with ad-supported OTT, how OTT is changing the game and effective buying strategies for marketers.
We have an impressive roster of industry voices including our own Jim Wilson as well as experts from Havas, UM, Horizon Media, Publicis, Discovery, Fox, Pluto TV, Philo, MadHive, to name a few.
Please watch and share this with others!
Last month, I spoke at NAB’s Small Market Television Exchange (SMTE) Conference on the Demystifying OTT panel to share insights on the challenges and growth opportunities for local broadcasters as viewers shift into the OTT space.
Consumers are embracing OTT viewing options, and the accelerating adoption is projected to put the premium OTT market in the US at $21 billion by 2020, according to a new MTM report. As such, content owners should move quickly to not only follow but also attract viewers.
To succeed today, TV and content providers need to woo audiences with enticing content, enhance the user experience with greater personalization, and be everywhere their viewers are.
Here are key takeaways from the session:
Partnerships are key for broadcasters to speed roll-out of OTT offerings – In many instances, local broadcasters are still playing catch up to their audience, which have shifted, at least a portion of their viewing, to streaming platforms. To overcome distribution challenges, broadcasters should leverage the right partners to get to market faster with new OTT offerings. These may include vMVPDs such as Sling and aggregators like Pluto and Xumo. While owned & operated (O&O) digital properties are crucial for your most loyal viewers, they may garner limited viewership due to difficult discoverability.
Broadcasters need to expand beyond limited shelf-life programming – Many local broadcasters produce content with a brief shelf-life. Any app or service with good content longevity provides time-shifting viewers something to consume at all hours of the day. Building a successful OTT programming strategy requires broadcasters to re-evaluate their programming strategy.
Address scale challenges with product extensions – Achieving scale in premium digital video in local markets remains a challenge. Nimble broadcasters should focus on building out audience extension offerings, which will enable them to sell more inventory and generate more ad dollars. There are premium offerings, like PREMION, which ensure that ads are running in a brand safe and fraud free environment, unlike open exchange products.
Keep pace with the speed of change – Our industry is filled with digital acronyms (SSP, DSP, CPM, eCPM, OTT to name a few) and it’s changing quickly. Beyond speaking the language, it’s important to stay abreast on new capabilities in targeting and measurement to win over advertisers by simply educating them. It’s a great time to be an advertiser as more TV advertising can be measured than ever before.
If you’re not capturing the vast (and growing) streaming audience, then you’re losing them to your competition. How effective is your OTT content and advertising strategy? Let’s have a conversation.
Best practices for OTT success
By every measure, OTT (aka Connected TV or CTV) viewing is the new normal. With three in four U.S. households now consuming content on streaming services, advertisers and brand marketers are shifting bigger budgets into this rapidly growing channel. In fact, 78 percent of marketers plan to buy ad inventory on streaming TV within the next 12 months, according to a SteelHouse survey.
But for some marketers, the complexity and fragmentation of the OTT ecosystem remain hurdles to widespread adoption. To reap the benefits of OTT, you’ll need a deeper understanding of the solutions available.
What are the key considerations for developing an effective OTT buying strategy? Here’s our playbook to simplify the media-buying process to reach the vast and highly engaged streaming audience.
Data is king for OTT targeting
Data is fueling the OTT landscape but targeting and execution capabilities vary significantly among OTT providers. When planning their media buy, marketers need to consider whether they’re buying audience or content. Or maybe both. And when you’re doing data-driven targeting, where is the data coming from and how accurate is the viewer profile?
The latest OTT advancements allow marketers to use audiences instead of content to plan their campaigns. Audience segmentation can be truly deterministic and addressable down to an individual level. Data can be collected based on viewership and matched back to the individual within a household. Using non-personally identifiable viewer data, marketers can analyze content and match it to channel, program and ad placement data to better understand what types of viewers are watching each type of programming and what is triggering their purchase decisions.
In addition, first-party data collection on some OTT platforms offers the capability for online and offline attribution. This can give marketers richer insights on desired actions taken by a viewer that has been served an ad.
Inventory quality matters
Brand safety remains a paramount concern and advertisers need to understand what they’re buying. Since not all OTT quality is the same, determining inventory quality is imperative for marketers. Many providers claim they have directly sourced inventory, but it is important for marketers to know exactly where the inventory is coming from to ensure that their ads are running in a brand-safe and fraud-free environment.
What questions should you ask? Is it a direct buy with a network or ad solution platform, or through programmatic channels that source inventory from open exchanges and non-guaranteed PMP deals? Which is the right combination to give marketers what they need to ensure brand safety and provide the greatest reach?
There’s no denying that OTT has hit the mainstream, solidifying its place in the media plans of advertisers. But as OTT continues to grow at a rapid rate, what do advertisers need to know about integrating OTT into their broadcast buys?
TEGNA Marketing offers insights into the value of integrating OTT and TV advertising in your ad campaign:
If you’re still getting up to speed on Over-the-Top (or OTT), it’s time to catch up. OTT is an FCC term that refers to how consumers receive their primary video signal, meaning it’s “over the top of the cable/MVPD plant.” Almost 80% of U.S. consumers have OTT subscriptions and the average weekly time spent watching OTT is expected to increase to 18.9 hours by 2020. This represents a huge opportunity for marketers, and OTT ad revenues are forecasted to rise to $31.5 billion by 2018.
It’s not just Millennials watching, either. More than 60% of OTT viewers are ages 25-54, and as a whole, the OTT audience represents a mix of cord-shavers, cord-cutters, cord-nevers and cord-extenders—industry terms used to describe consumers’ cable subscription patterns. What does all of that mean? In addition to reaching those no longer viewing traditional linear TV (cord-cutters or -nevers), OTT reaches consumers who want to expand their options (cord-extenders or -stackers). In other words, OTT TV is not replacing their broadcast TV viewing but rather adding to their total video viewing time.
OTT has started to solidify its place in the media plans of advertisers. But what about TV advertising? Should you choose one over the other?