5 Insights about monetizing OTT video from Advertising Week Europe
Live OTT (“over-the-top”) video is pushing the boundaries of digital video, and more and more advertisers have taken notice. But to truly become a burgeoning field in the world of digital advertising, OTT monetization must find its footing among a number of issues. At Advertising Week Europe, industry experts—including JW Player’s COO Bill Day—sat down with Léon Siotis of SpotX to discuss the challenges and opportunities within OTT advertising. Here are 5 key takeaways.
1) OTT ad data is scarce and isn’t easy to access yet.
Quality data on OTT ad performance has been spotty at best, but the Interactive Advertising Bureau (IAB) will be unifying and standardizing its measurements to include OTT. This means publishers and marketers can eventually compare individual ad consumption across web, mobile, and OTT. But accessing data directly from OTT platforms remains challenging. “Being able to get standardized measurements will help OTT grow from a monetization standpoint,” said Bill Day.
2) Companies are still ironing out where OTT advertising fits into their budget.
For some companies, OTT is now part of the innovation budget, but for others, it falls into the overall AV budget—as is the case for Discovery. “The goal is to collate VOD impressions . . . so there’s a convergence between TV and digital,” said David Fisher, Vice President of Digital Ad Sales at Discovery. Innovation budgets, which can reach beyond OTT and include interactive video, are emerging yet hard to measure.
3) OTT raises the bar for more relevant ads.
Unlike linear TV, OTT allows viewers to make a conscious decision to watch. “OTT video is in front of a customer who’s decided, ‘It’s my primetime,’” said Aurelia Noel, Global Digital Partner at Carat. An irrelevant ad is disruptive and ignores the viewer’s choice. Aurelia compared this experience to a “bath with nice music, and someone storms into my bathroom trying to sell something.”
One key challenge for live OTT advertising, then, is to insert ads in a natural or comfortable way that makes sense. That could include finding natural ad breaks that exist, for example, after every half inning in baseball, though not every live sport will lend itself to advertising in this way.
Moreover, the challenge is to ensure ads stay relevant. “People don’t mind advertising as long as it’s relevant, impactful, and playful,” said Aurelia. “It’s our role as agencies to work with advertisers to make sure we have creative that’s fit for purpose.”
“Too often you see the creative created first and then we find the audience for it. But it should be the other way around,” she continued. “It should start with the audience: Where is that ad going to be seen? What kind of moment am I going to tap into?”
4) OTT advertising won’t face the same challenges as mobile.
Despite its challenges, OTT advertising is expected to break through in a way that mobile video couldn’t at first. “Mobile was in a death trap for years,” said Bill. “It was new, hard to measure, and the screen was small. I don’t think OTT will suffer from that. OTT will scale very rapidly in both consumption and monetization.”
5) GDPR is both a blessing and a curse for OTT advertising.
On the one hand, the European privacy and security legislation will further limit access to data that is already rare in the OTT space. But it can also be a “gift in a way because it helps clients put together a data strategy. We can create personas using data, making advertising smarter and more effective,” said Aurelia.
The session concluded by asking panelists to rate industry hot topics as either “Underrated” or “Overrated”:
- Death of TV – Overrated. As the most effective medium, TV is going through a golden age.
- Death of the media agency – Overrated. Media agencies may be transformed but will still play a hugely valuable part in the ecosystem.
- Duopoly or Triopoly – Underrated / Real. It’s important to push advertising beyond the concentration of power held by Facebook, Amazon, and Google.
- Artificial Intelligence – Underrated. A decent amount of OTT inventory is programmatically sold, and AI (as distinct from machine learning) will change the ad world.
- Blockchain – Underrated. There’s a lot of opportunity for blockchain to combat endemic issues like fraud in the digital space.
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To learn more about how JW Player can support your OTT video advertising, schedule time to speak with a video expert.