We Need To Break A Few Bad Habits To Advance OTT Advertising

"On TV And Video" is a column exploring opportunities and challenges in advanced TV and video.

Today’s column is written by Ed Kim, vice president of product and strategy at Nielsen Catalina Solutions.

The silos are coming down between digital, mobile and TV, in all its different formats. Although the industry continues to splinter, the future will be less about which device to advertise on and more about on-demand content, particularly video. The fact that “The Blacklist” is delivered via the programmer, a cable or satellite operator, smart TV, OTT device, desktop computer or mobile device will be irrelevant.

As we move toward this future, all media activation approaches the point of becoming truly addressable. But we need to change the way we think about some things in the TV advertising ecosystem, especially with the newer, connected TV formats.

Scale

First, we have to stop using scale as an excuse for not investing in connected TV and OTT.

There’s a sizeable audience that marketers can reach today to positively impact their efforts and drive incremental sales. When you combine the audiences of streaming apps like Hulu, network apps, the ad-supported segment on the Roku platform and the recently announced YouTube TV, it’s not insignificant. While overall TV viewing is up, the linear TV ratings for the Big Four broadcast networks continue to decline because viewing habits are fragmenting, which means marketers must reach audiences wherever they are.

For years, we talked about scale as a barrier to addressable TV growth. Sometimes we still do, and we can all agree that there’s still scale to be had here. But in 2016, advertisers spent $890 million on addressable TV advertising, according to eMarketer. Last November, SMG said it had completed more than 100 addressable TV campaigns for more than 50 clients.

Even without huge scale, there’s a lot of money going to addressable TV advertising. OTT shouldn’t be any different. There’s enough of an audience here to seriously consider the channel as part of a media plan.

Expense

We need to stop thinking of connected TV and OTT inventory as expensive. Right now, it’s being priced at a premium, so it’ll probably cost more than linear TV, digital or mobile inventory.

Buyers should expect to pay a premium for reaching an audience that’s been qualified based on behavioral and purchase data, with better targeting and minimal waste. It makes sense that it would be priced like addressable TV. Advertisers are willing to spend on addressable TV for the precision; OTT should be no different.

Creative

We need to stop thinking of creative for connected TV and OTT in the same way we think of creative for linear TV. There’s a huge opportunity here for dynamic creative optimization. We need to bring creatives, data analysts and media folks together so they can innovate around creative that enables viewers to customize and interact with what they see on the screen.

Marketers must have the insights needed to develop a variety of different versions of creative, with different beginnings and endings, like we see with digital video. Household-level targeting, combined with IP-enabled delivery, means that brands can create personalized versions of advertising and get it in front of the person most likely to make a purchase.

Measurement

Finally, we need to stop debating how to measure the value of OTT and connected TV. Does a viewer watching “The Bachelor” on Hulu on their Roku device have a different value than a viewer watching “The Bachelor” on Hulu on their laptop?

Measurement is very complicated because each network can have an app on five or more different platforms. I’d argue that it doesn’t matter. We need to shift our focus to the value of the audience and reaching the right audience regardless of how they’re watching the content.

At some point, marketers just have to get their feet wet with OTT and connected TV advertising. And when they do and measure the results, they will realize how effective it can be.

Follow Nielsen Catalina Solutions (@ncsolutions) and AdExchanger (@adexchanger) on Twitter.

 

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