The proliferation of streaming over-the-top video presents new opportunities for brands and marketers, but right now it remains just a “piece of the puzzle.”
That was the big takeaway from a panel at MediaPost’s TV & Video Insider Summit, held Thursday in Pinehurst, N.C.
“[OTT] is a piece of the puzzle, not the whole puzzle,” said Jared Lake, vice president of digital strategy for the independent media agency Ocean Media, during a panel moderated by MediaPost editor in chief Joe Mandese.
That idea was echoed by the other panelists, Trey Dickert, media director for the media planning & buying agency Media Two Interactive, and Carlos Ramirez, group director at the ad agency Quigley-Simpson.
"[OTT] really works as a supplement, supporting all of our traditional and programmatic TV campaigns," Dickert said.
“We see it as an extension of our TV planning campaign,” Ramirez said. “Over time, ratings are declining, cable subscriptions are declining. Not that these consumers are going away. Screen time is increasing, so they are going somewhere, and OTT is where we believe these consumers are going. So we need to be relevant in this space.”
How big a market is OTT? Lake said right now it represents around 5% of his firm’s spend.
Ramirez noted it depends on the client. For big national brands, the bulk of the spend could be on TV, with OTT used “to extend the reach to go after part of the audience missing through linear TV.” For a startup with a more limited budget, it could account for far more spend.
Meanwhile, the way consumers watch TV is changing, and both content companies and marketers need to up their game to compete.
“The best consumer experience out there is not ad-supported, unfortunately,” Lake said. “What Netflix does, both from content perspective and a consumer perspective -- they are hitting it out of the park.”
In response to Netflix, services that do have advertising should aim to provide a better experience and boost engagement.
“Whether it be actual transactions or lead gen, those metrics will go up because people will be more engaged,” Dickert said. “It is never going to be a person just watching on Netflix or Hulu. They will always be on some other channel as well.”
Another alternative? More choice for consumers. Spotify and Hulu, among others, offer both ad-supported experiences and ad-free offerings at a higher price point.