• by Karlene Lukovitz  @KLmarketdaily, November 11, 2016

What’s the current status of over-the-top platform planning and buying, and where are they headed?

While OTT is still very much in the development stage, many agencies and marketers are excited by its one-to-one targeting potential, and increasingly interested in testing it.

On the other hand, entrenched methods and silos, as well as scale, budget, standardization and measurement limitations, must all be overcome before OTT can really take off.

Those were among the takeaways from agency and media executives on an OTT panel moderated by Crystal Chou, associate media director, Muh-Tay-Zik | Hof-fer. The session was held during a recent MediaPost Television Insider Summit.

Scale, Budgets And ‘Comfort’ Challenges
Oleg Korenfeld, EVP, ad tech and platforms, MediaVest, is among those who believe that OTT is the future of television. “The writing is on the wall — and for once, we can actually see it coming,” he declared.

While building the “tech stack” and establishing standards are essential, achieving scale, and gradually gaining access to traditional television budgets by getting television buyers comfortable with OTT, are the most crucial hurdles, in his view.

“I think [OTT] scale is getting there, depending on the campaign and how you’re running it,” Korenfeld said. In assessing scale, “You can’t just look at the number of devices sold because, until recently, most OTT has been Netflix, which doesn’t carry advertising. But now we’re seeing enough inventory that we can focus on finding campaigns that we know are small enough that we can deliver [the audience objectives] and then analyze the data.”

Korenfeld confirmed that it’s still rare to see TV dollars specifically diverted to OTT. “What’s often happening is that if there’s any money left over from the upfronts, they’ll say, ‘OK, let’s try that,’” he said. “And I’m comfortable with that for now, because we’re still in the test mode. We’re putting a huge asterisk on every [OTT] campaign, saying ‘This is a test campaign, and the money we’re using is purely test money.’”

Kris McDermott, director at digital marketing agency Resolution Media, said that she’s seen dollars for OTT coming out of digital display budgets, not TV. “That obviously makes the TV team happier, and it [amplifies] your results if you’re on the display side, so everyone seems to be happy with this,” she said.

“It’s still digital money” being used for OTT, agreed Dan Callahan, VP, programmatic sales for Fox Networks Group. Although OTT is sometimes consumed via the large TV screen, the technical specs for a connected TV and IPP-based environment, and the types of creative assets that can be run, are more similar to those for digital than traditional television, “so it’s a more natural fit for [OTT] to be bucketed under digital spend,” he said.

Callahan added that while growth is underway, industry statistics indicate that the lion’s share of streaming is still consumed by a very small percentage of viewers. “Once we see critical mass, we’ll see TV money spent on OTT — but in my opinion, it’s not big enough for that yet,” he said.

Korenfeld concurred that the “low-hanging fruit” for OTT currently resides in digital budgets, but stressed that moving television dollars into OTT should be the long-term goal. Ultimately, “I don’t want to spend digital money on [OTT],” he said. “We need to convince the TV buyers that this is TV as well, and that they need to be investing in it.

“One of our jobs is to get the buyers more comfortable with these new, quickly growing and potentially more efficient channels,” he added. “And that’s where measurement comes in.”

TV buyers need to be shown that OTT is “television plus, but it’s still television,” Korenfeld elaborated. They need to see appropriately aligned comparisons of the results generated with traditional campaigns and the results possible with “something more interactive, on a more identified device.”

The “promise of precise audience targeting” is OTT’s biggest benefit, and “precision should drive efficiency investment,” he said. “Often, TV investors will say that OTT is too expensive. Yes, it’s expensive compared to broadcast CPMs, but it should be viewed in the same way that we look at digital,” which is that overall results must justify the cost of the input investments. “It should be an overall investment conversation, not a CPM conversation,” he stressed.

“We approach it from the standpoint of, ‘What additional measurement are you going to get out of OTT?’” Korenfeld added. He cited fourth-quarter tests for two marketers that are very different but share a focus on conversions. These marketers wanted to explore how to use location-based targeting or attribution platforms to drive prospects to a Web site, or a retail store.

The tests served to shed light on what resonates with their OTT-viewing prospects and how that differed from traditional TV viewers. “I could have given them metrics similar to those that they’d get for traditional TV, but the point is to show how these TV buys are different in terms of actual measurement,” Korenfeld said.

The Art of Persuasion
Beyond metrics, understanding organizational dynamics and psychology may help persuade TV executives to consider moving some dollars to OTT.

“You need to find someone who’s willing to experiment within the client,” said Korenfeld. He reported some success with first getting validation for OTT from a client’s digital team — the people more likely to understand OTT, since it’s really a digital platform — and then going together to the client’s TV team to lay out the potential uses and benefits to be realized by trying OTT.

McDermott said that with some clients, it’s helped to first introduce social media to TV teams as another way of realizing incremental reach, and then introduce OTT as another incremental reach-driving option.

Callahan noted that OTT and other emerging platforms are starting to benefit from restructuring designed to address the challenges of audience fragmentation and more complex planning and buying. Fox has reorganized because its teams can now meet with the unified video teams that agencies have created by merging digital and linear TV teams, he said, adding that this is a notable step toward making it easier to buy across multiple screens.

Fostering Collaboration Across Functions
The executives agreed that, in the still-emerging OTT arena, the industry should be able to avoid repeating problems now plaguing digital, including exposing people to the same ad creative ad nauseum. They also agreed that producing different creative for OTT shouldn’t require huge time or investment.  

Korenfeld stressed that the agency should identify people with expertise in OTT and embed them in the client team to ensure a smooth, comfortable process.  

“It’s important to have specialty skillsets available to the strategy and planning team” — people who understand OTT technology and can facilitate the discussions with the creative agency that should begin early on. “Then you can say, ‘We understand the technology, so we’re going to make changes in these three elements of the creative” to use it in OTT, “but [the creative team] will develop those three spots inside this canvas,” Korenfeld noted.

McDermott also stressed that having media and creative collaborate early in the process inevitably results in more effective campaigns. Creatives want to produce highly effective ads, but frequently have not been educated about the functional changes that occur so rapidly, she said. Often, only small changes are needed to make ads functional, particularly if these issues are addressed up front, she pointed out.

She said that her agency has found that what works best is to start with a clear creative brief and then do quarterly educational sessions with the creatives themselves (as opposed to the account teams). “It sounds so simple, but it happens so infrequently, and it makes such a huge difference,” she emphasized.

At least while OTT and other emerging platforms are still in the developmental stage, McDermott also recommends designating a person on the creative side whose job description includes working closely with media and being responsible for receiving and ensuring implementation of all relevant updates, including new ad units and functionalities.

Measurement Standardization
The panelists also agreed that the “100% digital” nature of OTT demands digital measurement, as opposed to linear TV-type metrics — and that the ultimate goal should be to establish cross-platform, device-agnostic metrics for video as a whole.

“We should set that as the goal, and establish some standards” against which measurement companies can work in developing metrics for all measurable devices, said Korenfeld. “Standardizing the measurement loop” will at last “make multi-touch attribution real.”