Some see over-the-top as the platform with the most potential for eventually enabling efficient, scalable, one-to-one targeting in the television environment.
In comparison with two other “precision TV” platforms, addressable and programmatic, OTT has “the greatest promise” because it offers the possibility of going beyond household-level targeting to get to “person-level” targeting, said Jonathan Bokor, SVP, director of advanced media at MediaVest Spark, during InFronts 2016, a forum on television and video audience buying and selling hosted by Tru Optik.
OTT has the advantage of sharing the same data and technology platform as desktop and mobile, Bokor said. It also offers the potential for “re-aggregation of reach” in an environment where television viewership has become “atomized” as a result of proliferating channels, networks, platforms and devices, he stressed.
“If I can get to that cross-platform reach and frequency, which is what OTT has the potential to do, I can know who I’m hammering with ads, and stop doing that,” he said. “I can cap my frequency to them and try and reach people I’m not getting. That is very difficult to do in traditional television today, because I don’t know who I’m exposing [to ads].”
In viewership terms, ad-supported OTT is now growing faster than subscriber-based OTT, added Scott Rosenberg, VP advertising at Roku. Further, the studies that Roku packages with campaigns are showing substantial lifts in brand impact relative to digital video and linear TV, as well as in intent to buy, brand perception, aided and unaided recall and (through matching with third-party data sets and impression counts) sales lifts, he reported.
However, Bokor laid out current obstacles limiting advertising investment in OTT. “We’d love to put more of our clients’ money in OTT,” he said, but “the vast majority of viewing is on Netflix,” and HBO, Showtime and Amazon don’t take advertising, so “the amount of inventory we can buy in OTT in comparison to linear TV is microscopic.”
Premium pricing, at least given the current limitations of the targeting value proposition of most OTT inventory owners, is another core obstacle, said Bokor, who stressed that linear remains dominant because it’s still both effective and highly cost-efficient for many advertisers.
“We would like to fully take advantage of data and be able to buy in a more granular fashion, but most of the people who control video inventory on the OTT platform want either to sell it untargeted — what we in the business call ‘P2 plus’ — or on a demo basis,” he said. “So the advantage that the platform potentially offers is not being delivered by the sellers of that inventory.”
Most of the suppliers don’t have advanced data-enhancement capabilities, “and even if they did, they don’t want to sell it that way, because it’s much harder to find the advertisers and fill in all of the impressions” than it is to sell on a P2 plus, run-of-platform basis, where “every impression is sold at a high price,” Bokor added.
MediaVest and its clients “want to be able to evaluate each advertising impression individually, be able to bump that ID against our DMP to tell us what we know about this person and how many times we’ve exposed them [to ads],” and then decide whether it’s desirable to expose those individuals again, and what price the client is willing to pay for that, he said.
Impression-based, programmatic buying, with some limitations, is possible in online video, and OTT “is very similar to OLV — it’s just at an earlier stage of development,” Bokor observed. “I think we’re going to get there [with OTT], but there needs to be more inventory, more development of how we actually execute against it.”
Bokor also contrasted OTT with addressable TV, where the ability to “specifically target households, and then measure ROI on the back end, is very effective.” Addressable has generated “very positive” penetration and sales lift results for a number of automotive and CPG clients, and as a result, MediaVest Spark is planning to double clients’ spending in addressable for the third year in a row.
“OTT is [also] fully capable of delivering that, but there are currently very few who will sell [OTT] to us that way — and again, price is another big issue,” Bokor said.
Roku’s Rosenberg acknowledged that OTT is currently challenged by limited inventory and reach in comparison to linear. But he argued that consumer awareness and adoption of OTT for the superior viewer experience (at least outside of live events, where linear will continue to have strength) will grow rapidly — especially once high-value content now “locked up in carriage deals” begins to flow to OTT.
Moderator David Wiesenfeld, chief strategist at Tru Optik, asked if inadequate measurement capabilities are also holding up OTT.
Andrew Frank, a VP and analyst with Gartner for marketing, noted that because audience fragmentation is challenging the validity of traditional panel-based methodologies, “Nielsen and everyone else is going to sort of ‘hybrid census’ models.” But for technical reasons, “perfect” census models aren’t possible, either, so the industry is “still experimenting and thinking our way through how you solve that measurement problem in a world where everyone’s doing a different thing at a different time,” he said.
Wiesenfeld also speculated that practical obstacles to the desired model of using census-based measurement for OTT, like software installation challenges, might cause Nielsen and comScore to use panels.
Rosenberg said that that’s not Roku’s approach, and that, “done right, it is possible to measure ad impressions in the OTT environment on a census basis.” He noted that Roku partnered to put Nielsen’s Online Campaign Ratings — and now Digital Ad Ratings — “right into the OS.”
If the industry ends up with panel-based measurement for OTT, “it would be like having a Ferrari and using it to drive to the mailbox to pick up your mail,” commented Bokor. “It would make no sense.”
The measurement solution is “never going to be perfect — there’s always a compromise,” noted Frank. “But I think we’ll see a great deal of improvement over the next year or so.”
Of course OTT, with its generally lower levels of ad clutter generates higher levels of commercial exposure and its targeting and frequency control capabilities are a major plus. But you must have significant audience tonnage to attract more ad dollars and that takes a lot of content. Where is that coming from?