OTT audiences are prevalent and engaged.
But while advertisers are buying, they’re not exactly beating down the doors. Watch any premium long-form show on an internet connection and you’ll see the same irrelevant message played so frequently it’ll haunt your dreams.
The main issue is buyer confusion about how to transact on OTT inventory, as well as how to measure it.
A town hall at the IAB Leadership conference in Palm Desert, Calif., led by SpotX CEO Mike Shehan, discussed these issues and others. An edited version of the debate is reproduced below.
What’s the past year been like for publishers?
Lauri Baker, SVP of ad tech at Discovery: OTT is huge for us. We are seeing just under 50% of our total streams coming from connected TV. It opens up a lot of opportunities and challenges. Being primarily a cable network, our data is owned by our affiliates and our MVPDs. So first-party data has always been challenging for us.
But a lot of our partners are willing to cooperate on the data piece. We have great inventory, they have great data about our users and platforms. So what is the value exchange? The conversation with our partners is very different than it was a year ago.
What are the buying challenges?
Baker: How do we talk to our buyers now? We are a traditional TV company, so our largest relationships are with TV buyers. But digital-only buyers are realizing now that TV is no longer TV and digital is no longer digital: It’s video.
John Marshall, global head of digital ad tech at HP: Who’s going to execute it on the agency side? Who plans it? What creative do we run? How do we measure it?
Our agency has several different teams that transacts OTT, so they are figuring it out as well.
We have to think about how to construct a plan around it and measure it, based on what consumers are doing. That’s been a barrier, but there’s opportunity to figure out how to innovate and how to get data out so we can plan better.
Another challenge is that we’re seasonal in our television investment. So is this TV budget or is it digital budget? We have windows where we’re planning for our seasonal period, and if you miss that window, then you miss out on some opportunities. You need good data flowing into your planning tools.
Baker: Is this an upfront conversation that’s planned in the fall, or is this a more digital strategy that’s always on or in the scatter marketplace?
That’s the biggest challenge: When do we talk to people to get in front of the great inventory we have in store for the ’18 to ’19 upfront?
Manny Hernandez, VP group director of programmatic at DigitasLBi North America: If you think about the planning process, the first thing we do is define an audience and strategy. We don’t think about the inventory source.
Once I define that audience, there are a couple of other questions: What inventory do you have that’s premium or mid-tail? And what is my scale?
We’ve run with SpotX where we had to answer those questions. And it was tough. I still have a wide gap between the budget I’ve allocated for them, versus what I might spend when we go buy.
Are OTT audiences more valuable than linear TV audiences?
Rick Mandler, VP of strategy and digital media advertising at ABC: There’s a wealth of data showing that on-demand exposures have higher levels of engagement than live, because you’ve actually chosen the program you are going to watch.
Most networks are selling it at the same CPM as everything else. So that’s a bonus. You’re getting a higher engagement opportunity for the same price as everything else. That’s why it’s a mystery to me why excuses like “Oh, I can’t run my tags” or “Oh, it’s hard to plan” are pushing people away from taking this opportunity.
What’s it going to take to get buyers buying?
Adam Gerber, SVP, NA investment at Essence/GroupM: I’m amazed people are no longer willing to take risks anymore, and we always default to needing the perfect rationale for investment. The problem is that no one uses their brain anymore on the buy side.
The marketplace is changing faster than companies and platforms can keep up with. And sometimes we just have to use our heads and say, “That’s good content, that’s the audience I want to reach. So that’s a good place for me to invest.”
We have to use our gut a little more to understand where these pockets of opportunity are before measurement and platforms catch up.
Hernandez from Digitas: We all agree there’s value and it’s awesome, but I can’t allocate a random number. I have to justify it to my client. That’s a lot of money we’re spending.
Mike Fisher, VP of advanced TV and video at MediaMath: Why can’t you just say: “I’ll allocate 10%”?
Hernandez: If I’m the client, the first thing I’ll ask is, why?
Gerber from Essence: There are lots of ways to estimate how much viewing is occurring on these platforms. Are they equivalent to Nielsen ratings? No. But Nielsen isn’t perfect either.
You’ve got to take some steps in a space that’s innovating as quickly as this space is and use your best data points to predict. P&G decided arbitrarily once to allocate 5% to cable. Why? Because it sounded like a good number.
I think you need to use basic common sense. Use the data points you have to estimate how much to buy on these platforms. Understand that viewers on those platforms have higher value, because they’re choosing to engage. They’re more fluid and you can’t reach them on broadcast as easily. And you’ve got to put a stake in the ground and invest in it.
Hernandez: I agree with you, but look at the 10% example. I’ve got two big global clients, one with $10 million allocated to OTT. The other is about $1 million. If I arbitrarily say 10%, why am I allocating $1 million for client A’s budget versus $100,000 for client B’s budget?
I’m not telling clients not to go there. But can the tech providers give me some tools so I can at least directionally give my clients some rationale for where we should be?
Baker from Discovery: If tech providers can’t do that, then publishing partners can.
Hernandez: Sure, if I’m working with one publisher, but I’m working with many others.
What are the measurement issues?
Baker: Everyone wants to reach and speak to the audience across all screens with a frequency cap. How do you do that if you don’t know which consumer saw your ad on the big linear buy versus the consumer who saw your ad on a mobile device?
Why are OTT ads so repetitive? Why are there occasionally no ads at all?
Pete Chelala, VP mobile ad sales at Viacom: [The buying challenges], plus the measurement issue, is why you’re seeing black space live and repetitive creative. As a publisher who’s serving ads into those pods, you need a variety of scale to help with the frequency. So you’re seeing 30 promos or the same ad in a pod. We hope to figure it out soon.
The more people spend money on OTT, the better experience it will be. And the faster it will show up. Then TV ads will be digital.