What’s the point in running an ad on TV if no one’s watching?
That’s the question Origin is aiming to answer with technology that inserts native animated “primer” videos before ads within connected TV ad pods so that a viewer’s attention doesn’t wander off during an ad break.
“Capturing attention is a big challenge on CTV,” said Fred Godfrey, Origin’s CEO and co-founder.
The idea for Origin was sparked around 2019 when Godfrey and his co-founder Stephen Strong were both working on growing viewership and distribution for Newsy, the E. W. Scripps-owned news network that streams content across free OTT platforms, including Pluto TV, Xumo and The Roku Channel.
“We wanted to go deeper, but being part of a much bigger entity meant we could, understandably, only go so far,” Godfrey said.
Origin, whose advertiser clients include Toyota, Pacifico Beer, Macy’s, Old Navy, Athleta and PetCo is half animation studio, half technology company. It both creates native animated spots and owns the tech to embed them. The company also has technology called Origin Slate that helps fill unsold ad spots using branded native content rather than forcing a channel to default to promos, tune-ins or “We’ll be right back” slates.
AdExchanger spoke with Godfrey.
AdExchanger: How much of a contributor is a negative advertising experience to AVOD churn?
FRED GODFREY: It’s a very big risk – I might even call it an existential risk. My partner won’t even watch ad-supported TV. She appreciates I’m in the industry, but she just won’t do it. Viewers have a short fuse.
But the reason this hasn’t taken center stage as a huge problem that needs to be addressed is because CTV is still in a state of hyper growth. For now, more people are joining the streaming revolution than are churning from AVOD, so the numbers are still going up. But everybody has a limit to their patience. And so the question is, what is their patience threshold and when will it switch to where more people are bailing than are joining?
Are the streaming platforms themselves making enough of an effort to fix the ad experience or at least make it less annoying?
We work with a lot of streaming services and platforms that are actively trying to make the viewer experience better. But there are also certain actors that will probably only start caring once they start to see a drop-off in viewership.
Right now, a lot of folks seem to feel like it’s better to ask for forgiveness than for permission because they want to attract as many advertisers as possible. There is still fundamentally a lack of advertisers in CTV.
Why is that?
It’s to do with what I like to call the dinosaurs of Madison Avenue. There’s still a little too much self-preservation going on right now and billions locked into traditional TV, even though I’d argue it’s an increasingly inferior way to reach people in the living room.
There’s also still a learning curve on the agency side. But with more education, more ad dollars will come in, and we’ll reach a point – I believe it’ll maybe even happen this year – where we’ll stop calling connected TV “CTV” and just start calling it “TV.”
What exactly is a native CTV ad?
Behind the glass, there are so many interesting things happening in CTV in terms of improvements in data, measurement and targeting. But we’re interested in what viewers are looking at – what’s happening in front of the glass.
We create very short-form animated content, usually 15 seconds long, that we stitch and run before a client’s ad starts. The purpose is to get people to move their eyeballs from their phones back to the TV during an ad break. Essentially, we prime viewers for the ad that’s about to run with something fun and engaging so that they’re in the right mental and emotional headspace when they see the actual ad.
Is the content you make interactive?
No overlays and no interactivity. We don’t believe in interactive TV through the remote because it doesn’t make for an enjoyable viewing experience. We believe in what we call mental interaction and we also encourage the use of a second device.
What about targeting?
We can target ads geographically or demographically, which helps with brand recall, consideration and purchase intent.
Native CTV ads can also help extend a national campaign to make it more relevant to what we know about a household, like income. For example, you can show the same ad to a family with a household income of $270,000 or $2.7 million, but precede it with an animated native ad that’s relevant to the household.
But we’re really careful about frequency. We’ll never show the same piece of native content before a client’s ad to the same audience twice.
Why does CTV still have such a bad frequency problem?
The same ad is being offered by multiple intermediaries. In an open programmatic universe, the big ad-supported streaming platforms struggle to find a healthy balance between providing a good ad experience and their fill rate, aka generating revenue.
It’s very easy for frequency to go beyond being effective to the point that it’s actually detrimental. There are certain credit card companies I have pledged to never use because their jingle annoys me so much it ruins my sleep.
But brands are not aware that they’re the victim – they’re just paying the bloody bill. At the same time, ad agencies need to spend as much money as possible before a campaign is over, so this just keeps happening.
Which will win in 2022, AVOD or SVOD – or is it not a zero-sum game?
It’s not a zero-sum game. There will be peaks and troughs for both. Deloitte predicts that 150 million people will unsubscribe from various SVOD services this year, and that positions AVOD to hit its stride.
But, then again, if people continue to get poor ad experiences, they might say to themselves, “I can afford $15 a month times four or five to avoid annoying ad experiences,” and if there’s a movie they want to watch, they might just decide to rent it on iTunes. It depends on how active people are in their choices.
We’ll see the pendulum swing in both directions this year.
This interview has been edited and condensed.
