THE POWER OF OTT - freewheel.tvfreewheel.tv/library/uploads/2018/02/FreeWheel...traditional TV. OTT...

FREEWHEEL SIGNATURE INSIGHTS, VOLUME 01

THE POWER OF OTT:AUDIENCES & ENGAGEMENT

2 FREEWHEEL SIGNATURE INSIGHTS / VOL. 01 / #OTTInsights

VOLUME 01

#OTTInsights

From the thought leaders that bring you the Video Monetization Report (VMR) each quarter, comes a new track of transformational research. Introducing FreeWheel Signature Insights, a new platform for

exploring the most widely-debated, needle-moving issues driving the premium video economy.

The inaugural installment of this semi-annual study takes a closer look at the growing prominence of

Over-the-Top (OTT) devices and what makes them so promising yet challenging for the industry to monetize. We investigate the unique benefits of OTT and what to believe or question about the

rhetoric surrounding this transformational platform.

THE POWER OF OTT:

AUDIENCES & ENGAGEMENT

#OTTInsights / VOL. 01 / FREEWHEEL SIGNATURE INSIGHTS 3

EXECUTIVE SUMMARY PAGE 4

SECTION 01

THE ACCELERATION OF OTT PAGE 7

SECTION 02

OTT’S UNIQUE VALUE PAGE 11

SECTION 03

OTT: FROM OBSTACLES TO OPPORTUNITY PAGE 19

THE BOTTOM LINEPAGE 28

CHALLENGE 1VIEWABILITY &

FRAUD

DESIRABLE AUDIENCES

CHALLENGE 2INCREMENTAL

REACH

ENGAGED VIEWERS

CHALLENGE 3MEASUREMENT

BRAND LIFT


EXECUTIVE SUMMARY

In Q1 2017, over-the-top (OTT) devices surpassed desktop as the leading digital platform for premium video ad views in the U.S.1 What was once an emerging technology is now a dominant destination for premium video viewing, transforming the way content is distributed and monetized.

OTT viewing combines the power of digital advertising with the engaging, lean-back user experience of traditional television, creating one of the most compelling environments for viewers to engage with both content and marketing partners’ messaging.In particular, these big-screen devices deliver:

• DESIRABLE AUDIENCES: OTT allows marketers to reach viewers who are harder to find on traditional TV. OTT device penetration is the highest among Millennials, according to Nielsen. Additionally, over 75% of OTT ad views on entertainment content are in demo, with the coveted 18-34 group driving the majority of impressions.

• ENGAGED VIEWERS: Over one-third of OTT visits are over an hour long and viewers complete 98% of all premium video ads.

• BRAND LIFT: OTT campaigns produce a greater lift in brand awareness and favorability than desktop and mobile according to a recent Hulu study2, demonstrating that the engaged OTT viewing environment is more conducive to promoting brands than other digital channels.

THE NEXT BIG THING IN ADVERTISING IS HERE...

1. “The FreeWheel Video Monetization Report: Q1 2017,” (2017). Retrieved at http://freewheel.tv/insights/#video-monetization-report 2. “The Role of OTT in a Cross-Platform Video Campaign,“ (2016). Retrieved at https://www.hulu.com/advertising/the-role-of-ott-in-a-cross-platform-video-campaign/


OUR NOTE ON METHODOLOGYIn order to better understand viewers’ behavior and the opportunity OTT affords, we selected a sample of U.S. FreeWheel clients representing over 95% of OTT-driven digital ad views in our research data set, which is also used for the quarterly FreeWheel Video Monetization Report. The analyses using FreeWheel data were conducted using data from Q1 2017. In some cases, sampling was applied given the large amount of data and will be called out in the charts within.

While OTT brings together the best of digital video and linear television, it doesn’t neatly fit into either category. Our research identified three concerns from marketers and agencies, and suggests that misconceptions around the platform have resulted in OTT being under-utilized relative to its true value:

• VIEWABILITY & FRAUD: Because OTT is an IP-based platform, marketers have carried over their concerns from desktop around viewability and fraudulent traffic. However, OTT is inherently less vulnerable to both challenges due to high authentication rates, the devices’ closed environments, and the nature of the viewing experience.

• INCREMENTAL REACH: Advertisers should not be concerned that OTT audiences overlap with people they’re reaching through linear buys. In reality, OTT has compensated for a large part of decline in time spent with Live TV, replacing traditional linear viewing for many consumers. We found that viewers treat OTT devices just like traditional television — they watch a large amount of live streamed content and tune in mostly during the popular, primetime TV hours. Therefore, marketers who only advertise through linear TV spots would miss out on these OTT audiences, who are watching the same content during the same time period, but on a different platform.

• AUDIENCE MEASUREMENT: While OTT is the best of linear and digital, it doesn’t fit neatly into the measurement frameworks used by either. There are many ways to measure and transact OTT if advertisers are willing to be flexible and innovate, and safe automated marketplaces open up new targeting and measurement opportunities for buyers.

No doubt there is still work to be done. However, these complexities should not be enough to dissuade advertisers from taking advantage of this valuable inventory.

To fully realize the potential of OTT, premium video publishers also must position their organizations to navigate these challenges. This includes:

1. Equipping sales forces with the right tools and information to represent the value of OTT inventory and address agency concerns.

2. Ensuring technology integrations are optimized to support seamless execution of OTT campaigns.

3. Leveraging 1st and 3rd party data to overcome measurement challenges while increasing the value of their inventory.

We’re extremely optimistic about the future of OTT and look forward to partnering with you to unlock its true potential.

Thank you, FreeWheel Advisory Services


3. “Premium Content Helps Grow US Connected TV Audience,” (2016). Retrieved at https://www.emarketer.com/Article/Premium-Content-Helps-Grow-US-Connected-TV-Audience/1014731

Few trends have enabled the acceleration of premium video consumption like the introduction of OTT devices. According to eMarketer, over 58%3 of the U.S. population uses an OTT device at least once a month, leading programmers, distributors and advertisers to pay close attention to the increasingly ubiquitous platform.

THE ACCELERATION OF OTT

SECTION 01


The Interactive Advertising Bureau (IAB) defines OTT as:

A device that can connect to a TV (or functionality within the TV itself) to facilitate the delivery of internet-based video content, such as streaming boxes, media streaming devices, smart TVs and gaming consoles4.

THE ACCELERATION OF OTT

4. “IAB/2016 Video Advertising Glossary,” (2016). Retrieved at http://dvglossary.www2.iab.com/ 5. “State of OTT: An in-depth look at today’s over-the-top content consumption and device usage,” (2017). Retrieved at https://www.comscore.com/Insights/Events-and-Webinars/Webinar/2017/State-of-OTT

OTT is by definition a very broad category, and it’s important to acknowledge the collection of different endpoints it encompasses. These devices can roughly be divided into three groups [Chart 1]:

• Attached Devices (84% of Ad Views): Devices that plug into or pair with a television set to stream digital content. These devices are mainly used for digital content consumption. Examples: Apple TV, Chromecast, Roku and Amazon Fire TV

• Gaming Consoles (11% of Ad Views): Devices that include home video game systems that also have built-in entertainment platforms and apps. Video gaming typically drives the original purchase of these devices, but many owners are increasingly using these devices for general entertainment and video streaming. Examples: PlayStation, Xbox and Wii

• Smart TVs (5% of Ad views): Internet-enabled televisions that have the ability to receive traditional linear feeds as well as stream on-demand content without any additional devices. The majority of television sets are now manufactured with these capabilities, though not all households take advantage of them.

Comparing ad monetization across these different categories, we find that attached devices account for the vast majority of ad views. When developing apps for OTT platforms, most mainstream programmers prioritize attached devices because of the larger user base and their focus on streaming video content. According to a recent comScore study5, the penetration of smart TVs and gaming consoles in U.S. wifi households (30% and 28% respectively) is much higher than their video ad view shares, indicating that there’s significant opportunity to drive monetization for those device groups.

ATTACHED DEVICES

SMART TVS

GAMING CONSOLES

CHART 1

Q1 2017

OTT DEVICE SEGMENTATION & AD VIEW SHARE

11%

5%

84%


https://ctt.ec/Gkh4b


OTT provides the advantages of digital advertising in a highly engaged, linear TV-like experience. It truly combines the best of both worlds.


OTT’S UNIQUE VALUETo date, ad spend on digital video pales in comparison to traditional linear television. eMarketer estimated 2017 digital video ad spending in the U.S. to reach $13.2 billion compared to $72.7 billion for linear television6.Many agencies and advertisers still approach digital in general with a degree of increased scrutiny given concerns associated with viewability, fraud and accountability. While these concerns are often mitigated by what we define as “premium video” — professionally produced, rights-managed video content presented in a high-quality environment —additional advantages exist when that content is consumed on OTT.

For consumers, OTT provides access to an array of made-for-TV content, both on-demand and live, the way it was meant to be watched: in a lean-back, living room environment. For publishers, it provides a unique distribution platform that creates a premium user experience and helps reach audiences on the TV screen that otherwise may choose to cut the cord. For marketers, it promises the ability to buy highly engaged viewers on a targeted, impression-by-impression basis [Chart 2].

6. “US Ad Spending: The eMarketer Forecast for 2017,” (2017). Retrieved at https://www.emarketer.com/Report/US-Ad-Spending-eMarketer-Forecast-2017/2001998

SECTION 02

CHART 2ADVANTAGES OF DIGITAL VIDEO vs LINEAR TV

DIGITAL LINEAR

Direct targeting by platform, audience

Measurement by impression over ratings

High ad completion rates and viewability

OTTEngaged, lean back experiences

https://ctt.ec/9XHeg


OTT delivers the audiences that many advertisers would pay a premium to reach. According to Nielsen’s Q1 Total Audience Report7, Millennials (defined as those aged 21-37 in 2017) have the highest weekly reach on OTT and spend the most time each day on those platforms of any other generational group. Further, our analysis of entertainment networks on FreeWheel showed that over 75% of ad views were “in-demo” (defined as reaching viewers between the ages of 18 to 49) with 18–34 year olds driving 56% of impressions [Chart 4].

High-demand audiences are concentrated within OTT environments, providing advertisers a compelling platform to grab their attention.

DESIRABLE AUDIENCES

OTT’S UNIQUE VALUE

CHART 3

Q1 2017, NIELSEN TOTAL AUDIENCE REPORT

OTT8 WEEKLY REACH PERCENTAGE AND DAILY TIME SPENT BY GENERATION

“ The rise of video consumption in the living room through OTT devices provides great opportunities for advertisers – new sources

of premium inventory coupled with the ability to align delivery with

changing consumption habits allows us to better connect with the

consumer and ultimately drive more brand value for our clients…

A focus on this area now ensures our clients are ready for a future

that one could argue is already here.”

Leaders in advertising are looking to OTT as the way forward. In the words of Jon Anselmo, Chief Digital Officer, President at Omnicom Media Group:

WEEKLY REACH PERCENTAGE

AGE IN 2017 2-20

32% 37% 32% 22%

21 29 20 13

53-7038-5221-37

DAILY TIME SPENT (MINS)

Jon Anselmo

7. “Nielsen Total Audience Report Q1 2017,” (2017). Retrieved at http://www.nielsen.com/us/en/insights/reports/2017/the-nielsen-total-audience-report-q1-2017.html 8. Report by Nielsen as “Multimedia Devices,“ defined as “Viewing on AppleTV, Roku, Google Chromecast, Smartphone, Computer/Laptops, etc connected to the TV”

https://ctt.ec/uUCyK

9. Based on Nielsen DAR measurement of audience composition by show on desktop and mobile devices, extrapolated to OTT based on the show mix of OTT devices

CHART 4

Q1 2017

AD VIEW COMPOSITION BY AUDIENCE GROUP9, ENTERTAINMENT CONTENT

4%AGES 13–17

13%AGES 55+

56%AGES 18–34

27%AGES 35–54

>75%WITHIN 18–49 (IN DEMO)


https://ctt.ec/xuGcD

14 SUMMER 2017 FREEWHEEL SIGNATURE INSIGHTS #OTTInsights


In a world where content distribution, and consequently audience engagement, are more and more divided, platforms that encourage undivided attention are increasingly vital. When a viewer tunes into a clip, show, or live stream on an OTT device, they are actively seeking out a specific series or network and tend to watch it all: both content and commercials. Furthermore, viewers on OTT devices can’t switch to another tab when an ad plays or easily change the channel during commercial breaks.

While other premium video platforms also yield high video ad completion, no other platform comes close to the near perfect rate observed on OTT [Chart 5]. These superior metrics can partially be explained by the full-screen, lean-back experience that OTT enables, replicating behaviors seen on traditional linear television.

ENGAGED VIEWERS

OTT TABLET SMARTPHONE DESKTOP

98% 91% 86% 84%

CHART 5

Q1 2017

AD COMPLETION RATES BY DEVICE PLATFORM

OTT’s average video ad completion rate is a whopping 98%.

https://ctt.ec/6FunV


OTT also attracts committed viewers who are eager to invest a significant amount of time in their content of choice. When examining average viewing sessions on OTT, we found that 55% of visits to a network were at least 30 minutes long, with over one third of visits lasting for an hour or longer [Chart 6]. Moreover, those viewers who watch an hour or more per visit spend 60% of that time watching live streamed content.

25%

0–10 MIN.

20%

10–30 MIN.

19%

30–60 MIN.

36%

60+ MIN.VISIT LENGTH

PERCENT OF VISITS

CHART 6

Q1 2017

DISTRIBUTION OF VISITS PER NETWORK BY VISIT LENGTH ON OTT

FOR 60+ MIN. VIEWERSHIP, 60% OF TIME IS SPENT STREAMING LIVE CONTENT

https://ctt.ec/1m4SU


12.8%

15%

8.6%

-1.1%

13.1%12.1%

7%8%

12.7%

Aided Awareness Brand Favorability Purchase Intent

DESKTOPOTTMOBILE

CHART 7

QSR ADVERTISER | STUDY BY HULU & KANTAR MILLWARD BROWN, 201610

PERFORMANCE LIFT AGAINST CONTROL ACROSS KEY BRAND METRICS

OTT is an important platform for publishers, distributors, and advertisers to reach quality audiences at scale and generate positive brand outcomes. This trend is likely to accelerate as more content becomes available, especially driven by the growth of new virtual Multichannel Video Programming Distributor (MVPD) offerings.

10. “The Role of OTT in a Cross-Platform Video Campaign,“ (2016). Retrieved at https://www.hulu.com/advertising/the-role-of-ott-in-a-cross-platform-video-campaign/

Like traditional television, OTT is one of the most effective platforms for driving brand metrics. According to a Hulu & Kantar Millward Brown study conducted last year using a campaign for a quick-service restaurant, exposure to the ad message in a living room setting produced the highest lift for aided awareness and brand favorability compared to exposure on desktop and mobile [Chart 7].

BRAND LIFT


https://ctt.ec/2tfAp


OTT: FROM OBSTACLES TO OPPORTUNITYDespite the benefits that OTT brings, the industry is still figuring out how to capitalize on its full potential. Just as the rapid adoption of mobile devices created monetization challenges due to the initial lack of standards for measurement and ad delivery, OTT has its own set of obstacles to overcome in order to unlock the dollars it deserves.While OTT combines the best of both digital video and linear television, it also has acquired some of the legacy challenges and assumptions associated with each platform. Since many advertisers do not consider OTT to be an independent media category, it is inconsistently lumped in either digital or traditional television budgets and therefore subject to the purchasing norms of each.

Ultimately, the marketing and monetization challenges that emerge require combatting misplaced assumptions and architecting forward-thinking ways of transacting on this growing platform.

SECTION 03


OTT: FROM OBSTACLES TO OPPORTUNITY

In advertising, protecting brand safety and ensuring the delivery of advertising messaging to real human beings is rightly a top priority for marketers. On desktop and mobile, where viewers have more flexibility to hide ads and disreputable publishers can easily purchase fraudulent traffic, the industry developed and deployed measurement solutions to prove that their ads were seen by real people.

Many agencies often require the same standards for OTT as for desktop, even though the user experience is inherently different and existing measurement does not scale across these newer devices. Videos on OTT devices take up the full screen as they do for linear TV, and devices don’t allow multi-tasking, making it all but impossible for an ad to not be fully viewable. To address agency demands, premium publishers have initiated creative collaborations with measurement companies to certify their OTT inventory is viewable, which has gone a long way to addressing this monetization hurdle11.

Similarly, many traditional solutions that measure non-human traffic don’t work in server-side environments, which encompass the majority of OTT platforms. But even if these solutions could measure fraud on OTT, the likelihood of uncovering any on premium video content would be extremely low in these closed environments. Also, invalid traffic is much more likely to be associated with open exchanges12, which are used very infrequently in premium video OTT inventory. Nearly all OTT inventory from premium publishers is sold directly to buyers or through private marketplace transactions.

Furthermore, OTT audiences usually verify themselves as humans, by authenticating through a cable, satellite, or “skinny bundle” subscription [Chart 8].

CHALLENGE 01: VIEWABILITY & FRAUD

OTT has one of the highest authentication rates of any digital platform, with 68% of ad views being generated by viewers that have logged in.

We see a similarly high rate of authenticated ad views on tablets, but it starts to drop for mobile and desktop where there is more content available in front of the paywall. This large base of authenticated ad views on OTT not only implies that the audiences are genuine but that they approach the content with high intent to engage and commit to viewing.

11. “Crackle Leads Industry in Viewability on Connected TV with First Ever Measurement in Collaboration with Moat,” (2015). Retrieved at http://www.prnewswire.com/news-releases/crackle-leads-industry-in-viewability-on-connected-tv-with-first-ever-measurement-in-collaboration-with-moat-300094681.html 12. “Is Invalid Traffic Really a Problem In OTT?,“ (2016). Retrieved at https://adexchanger.com/digital-tv/invalid-traffic-really-problem-ott/

OTT TABLET SMARTPHONE DESKTOP

68% 68%

56%

25%

CHART 8

Q1 2017

PERCENT OF AUTHENTICATED AD VIEWS BY DEVICE PLATFORM


https://ctt.ec/MrFa4



Advertisers want their message to target audiences as efficiently as possible. Since OTT devices use the same screen as linear TV, some have raised concerns that OTT viewers may overlap with linear TV audiences. While there is currently no precise way to measure unique reach across devices, a growing body of evidence points to distinct characteristics between OTT and linear TV viewers.

According to an analysis of data from Nielsen’s Total Audience Report13, people are spending less time each day with Live TV but increasingly more time with multimedia devices connected to the TV. Adults 18+ spent 30 minutes less with Live TV in Q1 2017 compared to Q1 2014 [Chart 9]. Over that same time period, daily time spent with OTT has increased by 14 minutes. People spend almost the same amount of time with a TV but increasingly access their content through multimedia devices. This suggests that a large majority of OTT audiences have used it to supplement or even replace linear television for certain content and therefore could not be reached through traditional TV buys alone.

CHALLENGE 02: INCREMENTAL REACH

CHART 9

Q1 2014 - Q1 2017

AVERAGE TIME SPENT PER ADULT 18+ PER DAY LIVE TV & MULTIMEDIA DEVICES

LIVE TV MULTIMEDIA DEVICES

2

1

3

4

5

HO

UR

S :

MIN

S

0

Q1 2014 Q1 2017Q1 2016Q1 2015

4:51

0:05 0:09 0:13 0:19

4:34 4:31 4:21

13. “Nielsen Total Audience Report Q1 2016,” (2016). Retrieved at http://www.nielsen.com/us/en/insights/reports/2016/the-total-audience-report-q1-2016.html and “Nielsen Total Audience Report Q1 2017,” (2017). Retrieved at http://www.nielsen.com/us/en/insights/reports/2017/the-nielsen-total-audience-report-q1-2017.html

https://ctt.ec/5af3x


10%

15%

20%

25%

ATTACHED DEVICESSMART TVSGAMING CONSOLES

CHART 10

Q1 2017

SHARE OF AD VIEWS BY TIME OF DAY, PER DEVICE GROUP


OTT viewing follows similar time patterns as traditional TV viewing, indicating that audiences are merely shifting their devices and not their viewing patterns. Across all OTT device groups, ad consumption, and by proxy, viewing, rises gradually during the day and reaches a high during peak primetime, 8–10 p.m. [Chart 10]. Linear TV consumption follows almost the exact same pattern, with viewership rising gradually through the day with a peak during primetime and a sharp drop thereafter14.

5–7 A.M. 8–10 A.M. 11–1 P.M. 2–4 P.M. 5–7 P.M. 8–10 P.M. 11–1 A.M. 2–4 A.M.

GAME CONSOLES LEAD IN LATE NIGHT

ATTACHED DEVICES INDEX HIGHER IN AM DUE TO MORE NEWS CONTENT

ALL OTT PEAKS IN PRIMETIME

14. “State of OTT: An in-depth look at today’s over-the-top content consumption and device usage,” (2017). Retrieved at https://www.comscore.com/Insights/Events-and-Webinars/Webinar/2017/State-of-OTT

5%

https://ctt.ec/eoaG3

We also find that for attached devices, the largest device group in terms of ad views, live streamed content accounts for 43% of OTT monetization [Chart 11]. This is the same content distributed on television, further emphasizing that the viewers are highly unlikely to overlap with linear TV consumers.

Together, these patterns show that what and when content is watched on OTT closely mirrors behaviors on traditional TV, suggesting that OTT viewers look to the platform to replace standard TV viewing and contribute to incremental reach for advertisers.

CLIPS (0–5 MIN.)FULL-EPISODESLIVE

ATTACHED DEVICES

GAMING CONSOLES

SMART TVs

78%

5%

5%

29% 17%

53%

52%

43%

18%

CHART 11

Q1 2017

AD VIEW SHARE BY CONTENT FORMAT, PER OTT SEGMENT


https://ctt.ec/LKPvg



Traditional TV and digital measurement solutions weren’t designed to incorporate OTT viewing, and the industry has yet to arrive at a common standard for how to evaluate campaign reach, targeting, and performance. While it may be the case that traditional ad measurement companies like Nielsen and comScore do not yet directly validate audiences across all OTT platforms, there are many ways to get credit for audiences on OTT — but all of them take work and require flexibility from buyers [Chart 12].

The most common strategy for audience validation on direct sold OTT inventory is through using compositional measurement, which involves extrapolating the demographic mix from other digital platforms (and sometimes TV) to OTT. Many buyers are open to accepting that proxy, especially in cross-device buys of which OTT are a part.

CHALLENGE 03: MEASUREMENT

CHART 12

Q1 2017

OTT MEASUREMENT CHALLENGES AND ALTERNATIVES

DEMO GUARANTEE FRAUD/NHTVIEWABILITY

POST-IMPRESSION VALIDATION

AUDIENCE TARGETING

PRIMARY CHALLENGES

ALTERNATIVES

Nielsen/comScore methodologies do not yet scale across all OTT devices

Compositional measurement

Audience targeting

Tracking criteria don’t work for server side integrations

Custom traffic analysis

OTT doesn’t employ cookies, which are typically used to create user segments

Build audience profiles based off Device ID or IP + user agent

Tracking dependent on flash/VPAID, which aren’t supported by OTT

Ad completion / view-through rates

Certification through 3rd Party (e.g. Moat)

https://ctt.ec/ie6UX


Advancements in OTT measurement are rapidly emerging, especially through programmatic channels. One such milestone is the ability to target users through a device ID, which can give advertisers the ability to leverage their first-party data or a data management platform (DMP) to reach their identified audiences. Where device ID isn’t readily available, new solutions to build audience profiles using the combination of a viewer’s IP address and a user-agent string are emerging.

All the while, 3rd party providers are making progress. Nielsen has been working to extend its audience measurement methodology to more OTT environments15, and comScore is developing advanced OTT audience measurement solutions16.

Jonathan Bokor, SVP, Director of Precision Video at Publicis Media Exchange (PMX) puts it perfectly:

15. “Nielsen to Break Out Metrics for Apple TV, Roku, Other Connected-TV Devices,” (2016). Retrieved at http://variety.com/2016/digital/news/nielsen-tv-viewing-roku-apple-tv-connected-tv-devices-1201737565/ 16. “comScore Introduces Breakthrough Service to Measure Over-The-Top (OTT) Content Viewing on TV Screens,” (2017). Retrieved at https://www.comscore.com/Insights/Press-Releases/2017/5/comScore-Introduces-Breakthrough-Service-to-Measure-Over-The-Top-OTT-Content-Viewing-on-TV-Screens

“OTT and the increase in dynamic advertising opportunities in the living room represent a very valuable opportunity for our clients to use precision

methodologies to reach viewers who have diversified their viewing habits

to include OTT. We believe that the future of TV will marry the best of linear

and digital and when OTT is transacting at scale with more standardized

measurement, it will realize its full potential for brand marketers. Today,

despite the measurement challenges, it represents incremental reach and

value for our clients, and we continue to seek out creative solutions to tap

into these audiences.”

Jonathan Bokor

THE BOTTOM LINEOTT holds a world of promise for publishers and advertisers alike. By bringing together the best of what digital video and linear television have to offer, these devices provide a preview of how the future of premium video will unfold.

The desirable audiences, engaged viewers, and marketing effectiveness that OTT brings to the table make it an increasingly essential channel for marketers. While barriers remain in order to accelerate advertising investment, each member of the premium video ecosystem — buyers, content publishers, distributors, tech providers — must do their part to develop and align on standards for transacting OTT.

So what can publishers do now to help drive progress?

1. ARM SALES TEAMS WITH KNOWLEDGE & TOOLS: As the guardians and evangelists of OTT inventory, publishers’ sales teams play a huge role in educating buyers and stimulating demand. But to do that properly, they must have sufficient knowledge about the platform’s benefits and limitations, anticipate agency’s concerns, and be able to offer creative solutions to address them. Having the right training and understanding of industry best practices in this area will be critical to success.

2. ENSURE SYSTEM INTEGRATIONS ARE OPTIMIZED AND ALIGNED: Delivering a quality OTT viewing experiencing involves integrating multiple device endpoints with unique specifications and ensuring that a variety of delivery systems effectively communicate with each other. While it’s tempting to integrate with every new smart TV, sometimes it’s better to focus on optimizing the experience on larger established platforms instead of investing in the marginal incremental reach of newer device models. Additionally, it’s important that publishers make sure all of their systems are configured to get the most out of their OTT inventory, including ensuring that key pieces of information are being passed between systems — including the device ID and IP address — to enable richer targeting.

3. LEVERAGE DATA TO MAXIMIZE INVENTORY VALUE: There’s vast opportunity in selling beyond traditional age and gender on OTT. The ability for advertisers to bring in their target audience lists and find them on these devices puts a premium on OTT inventory. Publishers should experiment with new ways of packaging and pricing OTT as well as open it up to safe automated channels where it’s easier for advertisers to incorporate their own data. Additionally, publishers should work with DMPs to define audience segments (e.g., based on age, income, psychographics) that they can sell against.

Properly implementing these practices takes focus and commitment. While OTT has a unique set of challenges, its journey in maturing as a premium video monetization platform is very similar to what the industry went through with mobile just a few years ago. In the meantime, it’s essential for all stakeholders to be flexible in finding creative solutions to make OTT work while investing in new capabilities and standards.


DAVID DWORIN

VP, Advisory Services

YING WANG Director,

Advisory Services

ALEXA ATAMANCHUK

Senior Associate, Advisory Services

STEVEN ROSENBLUM

Data Scientist

XU YAO

Data Scientist

30 SUMMER 2017 FREEWHEEL SIGNATURE INSIGHTS #OTTInsights

ABOUT THE AUTHORS

FreeWheel’s Advisory Services team helps businesses navigate complexity and adapt to change in the rapidly evolving premium video industry. We partner with many of the industry’s leading publishers to uncover opportunities for growth, execute new strategies, and evolve their organizations through actionable consulting engagements, proprietary research, and business intelligence. Our unparalleled dataset of over 200 billion annual worldwide video views, gathered from census-level ad monetization and viewership across all digital devices, informs our industry-leading quarterly Video Monetization Report and semi-annual Signature Insights studies. We look forward to working together to help you advance your premium video strategy.

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