2021 Promises A FAST Start, Data Transformation, AI, More Work On Standardized Measurement

Reflecting strong reader interest in last week’s column, here are some more insights and predictions about where the CTV and OTT sectors are headed next year and beyond.

Bill Wise, CEO, Mediaocean:  ”Streaming providers are winning the battle for media attention during the pandemic, and with the introduction and growth of new streaming offerings, this will only continue. For broadcasters, the focus will be on creating data-rich closed ecosystems of the streaming and linear offerings that allow marketers to purchase multiple inventory types with consistent audience definitions that go beyond basic demographics. This will help them compete with digital walled gardens and prepare for the converged world, which goes beyond OTT and CTV.”

Cathy Oh, global head of marketing and analytics, Samsung Ads:  Ad-supported video on demand (AVOD) gained popularity and reached parity with subscription services during 2020. During Q3 2020, streamers spent 1 hour and 24 minutes per day with AVOD solutions — a year-over-year increase of 47%. Subscription video on demand (SVOD) grew only 36% year-over-year, to reach 1 hour and 22 minutes in Q3.



Free ad-supported TV (FAST), a growing component of AVOD, is having its moment, and we should expect to see these platforms launch more original programming and advertising innovations. In 2021, these “channels” will become household names, just as AVOD has. FAST isn’t just growing viewership on TVs: Consumers are tuning in on mobile devices. Two-thirds of U.S. internet users watch video content via mobile, according to Statista

Just as we believe advertisers will stop thinking of TV as just linear or just streaming, advertisers will take the same approach to video overall — whether watched on a TV, computer or mobile or other device.

While linear addressable TV still hasn’t realized its full potential, streaming in just a few short years is ahead of the curve and fully addressable. Streaming has already proven its audience-based one-to-one reach. 

In 2021, we will start to see more collaboration around standardized measurement and attribution. TV marketers will be able to prove sales attribution versus modeling. They will also be able to use advanced technology and AI to find new audiences and opportunities that traditional TV just can’t support. The smartest advertisers are not measuring individual campaigns; they are looking at the combined impact and effectiveness of linear and streaming campaigns, optimizing, and allocating spend based on how best to reach consumers. 

While media and entertainment were early adopters of CTV and advanced TV, auto, pharma and travel started “leaning-in” in 2020. We will see these industries push ad innovations forward in CTV in 2021 as they use CTV to generate sales, not just awareness.

Automakers have started using advanced attribution techniques to measure cars sold to households exposed to CTV. They are also taking an integrated approach to TV — understanding how to reach certain audiences on linear versus CTV. For example, one luxury automaker reached half a million net new households via CTV. They also experienced a 143% lift in website visits.

For travel brands, advanced TV is driving results like brand lift and website traffic, as hotels and airlines amp up marketing efforts, leveraging native ad experiences and campaign flight strategies that have previously been used only by entertainment companies. Pharma brands have used data-driven CTV methodology to figure out which DMAs to prioritize and which to avoid in light of COVID-19.” 

Eldad Persky, VP of product development, Samsung Ads: “The demise of third-party cookies will forever change the way advertisers think about data, even for media that don’t rely on cookies — namely, CTV and smart TV. Quality of data will become more important than quantity. Expect to see a renewed focus on the overall household and defining the customer journey within that context. 

Data is also critical to the survival of AVOD, FAST and SVOD services alike. What doesn’t get a lot of attention is how streaming services acquire customers. That’s true for paid services — customers are only going to pay so much for these — but also for ad-supported services. Next year will be a real test to see how platforms use data not just to acquire, but to maintain, customers. 

Using mobile device data and other cross-device data will super-charge television advertising. This is an extremely compelling value proposition for mobile companies, as the attribution link between TV and mobile becomes more solidified.” 

Will Offeman, chief product officer, WideOrbit: “A major trend the industry will face in 2021 is a transition away from distribution channels through local, over-the-air TV, back into aggregated direct-to-consumer portals like Hulu, Peacock and Disney+. This will force many media companies to transform themselves and operate similarly to local news organizations rather than entertainment destinations.” 

Tristan Veale, market analyst, Futuresource Consulting: “Consumers inform content creators of their preferences by voting with their money. Globally, pay-TV subscription revenue dominates the market, accounting for $172 billion in consumer spending worldwide in 2020 and 70% of total global home video spend across pay TV, SVOD, TVOD, EST [electronic sell-through], DVD and Blu-ray.

[But] by the end of 2020, worldwide SVOD spend is set to reach $55 billion, with Netflix capturing almost half of all global value. The sector is exhibiting phenomenal growth and driving overall growth of home video spending… Combine this with the convenience of being able to pick up where you left off, no matter what device you decide to continue watching on, and it’s inevitable that SVOD will continue to power the growth curve. By 2024, we expect over a third of home entertainment spend will be on SVOD…

Our research shows that the market continues to tip in favor of VOD… the oldest demographics spend [most] of their time watching linear TV, whereas the youngest have significantly more fragmented viewing preferences, with SVOD and AVOD services like YouTube absorbing the majority of viewing time. The burning question is whether these younger age groups will adopt the habits of their parents and grandparents as they grow older, or will their current video behaviors remain with them as they age?...

While the SVOD services have developed a business model which suits modern living, there remains value in the linear model, with the vast majority of content spend directed that way.

Is there a way to combine the two? SVOD services certainly believe so, as they are experimenting with scheduling and acquiring sports rights — two key pillars of the pay-TV industry. The aim is to improve visibility on distribution platforms, including fitting in with current EPGs on legacy infrastructure, whilst still retaining the consumer’s ability to start from the beginning of the program if they wish.

Thinking about the customer journey, the first challenge is to entice them to the app or service, with the second challenge being to make it easy to find the right content. Whichever service can make that journey easier will have a competitive advantage.” (Quotes are from Futuresource’s summary of Veale’s recent presentation to the Society of Motion Picture and Television Engineers.)

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