Marketers 'Bullish' On OTT As Consumption Grows

Over-the-top video will grow in a significant way in the coming years, presenting new opportunities for marketers. That is a key takeaway from a panel discussion at Advertising Week New York.

The panel featured executives from Hulu, Blue Apron and Nielsen discussing the growth of OTT — and the potential it brings to advertising.

“When you see this convergence of linear and digital, how do you take the best of linear TV and marry it to digital?” said Jeremy Helfand, vice president, ad platforms. Hulu.

As brands spend more of their media budgets on OTT video, they are  beginning to reap the benefits of new measurement capabilities, and the ability to move consumers through the purchase funnel. Whereas TV has traditionally been a “top of the funnel” medium, OTT can deliver actual purchases as well.

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“ROI is the proxy for ROI,” Helfand added. “We are seeing the greatest transformation in advertising in a long, long time.”

That transformation means that increasingly, ads will look and feel different from the commercial pods we have today. Helfand says that over the next few years, Hulu expects half of its ad inventory to come from outside of those pods, specifically calling out sponsorships of programming events like “Huluween,” and brand integrations into shows.

Panelist Blue Apron CMO Jared Cluff said “there is something special happening” with OTT, which has slowly eaten up more and more of the company’s video budget, much of it from traditional linear TV.

“I am really bullish because we are seeing the results today,” Cluff said. “Over the last six months or so, we are starting to think of OTT as its own digital channel.”

Of course, with viewership fragmented between devices, platforms and screens, measurement is substantially more complicated than other forms of media.

“The tricky thing is that in digital measurement, it is a team sport,” said Megan Clarken, president of Nielsen Watch. Nielsen has inked deals with Roku, FreeWheel and Hulu, among others, to try and bring together data alongside its Nielsen panel and create more accurate viewing data.

Clarken noted that the average American watches 6 hours of video per day, and 4 hours and 45 minutes of that is linear TV, with OTT comprising 45 minutes. While OTT remains small by comparison, it has grown significantly over the past few years and will continue to do so. “That 45 minutes is going to eat into that live TV time, and it will be really interesting to see who rises to the top,” Clarken said.

Another issue OTT programmers and marketers consider: While the technology allows for precise targeting, its place on TV screens means there is usually more than one person watching. 

“By virtue of it being on a TV screen in the home, it is not a one-to-one device,” Clarken said.

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