• by Jim Wilson , Op-Ed Contributor, September 27, 2017

The transformation of TV is happening faster than many anticipated. OTT (over-the-top) viewing is growing exponentially. It’s now the dominant platform for premium video viewing. While advertisers know they must be there, many are still asking: Is it a broadcast or a digital buy?

It’s time we look at OTT advertising differently.

In this golden age of TV, where consumers have more quality content options than ever, they’re embracing the speed at which TV is moving to the Internet, especially if it’s ad-funded and free.

eMarketer estimates there are 193.3 million OTT users in 2017, with 168.1 million U.S. connected TV users. The rise of OTT comes at a time when cable is seeing continuing declines as another million consumers cut the TV cord last quarter, per a DSL Report.

Audience fragmentation across devices and screens is accelerating; according to comScore, the average household has 10 connected devices, and that figure rises to 19 devices among households with at least four people. Every major TV player is adjusting to this phenomenon by moving quickly to launch or announce plans for standalone Internet TV services.

How should marketers navigate the rapidly evolving and fragmented OTT space and reap its full potential?

For TV buyers: Focus beyond linear impressions

TV buyers tend to view OTT as an extended reach tactic but there’s also a misconception that OTT audiences overlap with viewers that they’re already reaching through their linear buys.

In reality, OTT is both a duplicated and extended reach tactic. It’s also making up for ratings point declines in both prime time and cable. According to a FreeWheel study, viewers treat OTT devices just like traditional television — they watch large amounts of streaming content and they also tune in to prime-time TV hours.

Advertisers that just focus on linear spots are missing out on reaching significant OTT audiences.

OTT provides all the value that TV delivers with TV-like impressions (15- or 30-second spots) but with much higher engagement. Since OTT viewers actively select a show, they have greater affinity to the programming, are less distracted and they’re not channel-surfing. Moreover, as OTT ads are non-skippable, they deliver a much higher completion rate, typically averaging 97 percent or higher.

And unlike cable, OTT offers new opportunities for one-to-one targeting, allowing for more efficient delivery of ads to an intended audience. OTT allows advertisers to reach the most diverse audience of cord-cutters, cord-nevers and people that still have cable. In fact, Broadcasting & Cable reports that 91% of cable subscribers also have OTT.

Therefore, TV buyers should rethink OTT as not simply just an add-on in the scatter market, but it should be prioritized for the Upfronts and ahead of their cable buy. 

For digital buyers: Move beyond core measurement standards

Digital buyers want to buy like digital; they try to apply the same measurement standards and assumptions about viewability and fraud with OTT as they do on digital. While OTT is an IP-based platform, the user experience is intrinsically different.  

In a walled-garden OTT platform, your ads run on trusted networks with authenticated viewers in a closed environment; it is the most brand-safe and fraud-free option. Videos on OTT devices take up the full screen and devices don’t allow for multitasking, so it’s unlikely for an ad to not be fully viewable.

And with the heightened focus on transparency, it makes sense that more digital buyers are opting to buy inventory using private marketplaces and premium video directly sourced to ensure brand safety.

While some OTT providers promise low CPMs, they’re blending short-form advertising such as pre-roll, in-banner video and user-generated content into the mix, to lower their costs.

OTT is the new cable, and it’s evolving with advanced targeting capabilities so advertisers can zone it down to DMA or Zip code and target by demographic, behavioral and contextual groupings, such as auto intenders. Also, new measurement capabilities in OTT are emerging, such as the ability to target users through a device ID that allows advertisers to leverage their first-party data or a data management platform (DMP) to reach their identified audiences.

We’re still early in the OTT advertising evolution.

OTT blends the best attribution of TV with digital media’s precision, and it’s where the most desirable audiences are. The future of OTT will see both TV and digital buyers leverage smarter buying strategies and for our industry to work together to invest in new capabilities and standards to deliver more relevant and effective advertising.