Watching a recent Warriors broadcast, I wasn’t focused on Steph Curry’s long bombs or Kevin Durant’s emphatic slam dunks. I was more captivated by the disparity between ads on OTT and linear TV.
After Chromecasting the game to my TV via the NBC Sports app, I quickly noticed the sloppy OTT ad experience. Only about 10 of the 30-second ads were unique. In fact, in just an hour’s time, one of those ads repeated five to seven times.
During one commercial break, the sequence of ads was laughably monotonous: Honda, Toyota, Toyota, Land Rover, Land Rover, Subaru.
In this age of digital transformation, why is the sell-side of OTT advertising so different from that of linear TV? How can ad sales execs differentiate their OTT inventory, swapping one of those Toyota spots for a Taco Bell ad, a Land Rover for a Ray Liotta Chantix testimonial?
It was fairly easy to find the answer to the first question.
According to Nielsen, despite the use of connected devices by millennials and other tech-savvy consumers, coupled with an increase in streaming video access, adults spend nearly five hours daily watching live and time-shifted TV.
Other viewing experiences pale in comparison, as TV-connected devices clock in at 46 minutes, computers and smartphones at 10 minutes each, and tablets at a lowly five.
Furthermore, four apps (Netflix, Amazon Prime Video, Hulu, YouTube) make up an estimated 75% of those 46 minutes spent on TV-connected devices — and Netflix and Prime Video are ad-free. This means there is not enough premium OTT ad inventory to go around, and it behooves advertisers to get in front of the much larger linear TV audience.
The OTT spoils go to a small number of gargantuan ad buyers, namely car companies: Honda, Toyota, Toyota, Land Rover, Land Rover, Subaru.
Fortunately, it appears execs at TV networks are starting to sell linear TV and OTT ad inventory as part of the same package. These “fluidity” deals bundle linear and OTT together so that ads follow audiences across viewing platforms.
With linear TV still leading the pack, advertisers, at this point in time, see connected TV as a supplement to their linear campaigns. Many streaming video services syndicate traditional TV ads to connected TV; other advertisers leverage OTT as a safety net for viewers who may have missed an ad from a linear TV campaign.
Samsung and Roku, for example, track content watched on standard TV and deliver targeted ads to those same consumers on their connected platforms.
As for diversifying OTT ad inventories, it may simply boil down to a waiting game. Advertisers are still easing into the connected TV realm, but will likely pour more dollars in — and add to networks’ available ad content — when additional users pivot away from conventional TV.
Measuring OTT impact is a concern for buyers as well, but ad tech companies are answering the call with automated planning and data solutions that clarify campaign results more effectively.
While most can agree that ads will never be as thrilling as watching the Warriors play, evidence suggests OTT inventories are repetitive and literally “over the top.”
However, with TV networks seemingly modifying their advertising packages, and ad-tech platforms facilitating the migration to OTT, buyers, sellers, and viewers may all soon reap the benefits of a diverse and less tedious commercial break.