Setting The Record Straight On OTT

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

Today’s column is written by Tal Chalozin, co-founder and chief technology officer at Innovid.

Ad buyers are fusing together traditional TV buying teams with digital buying teams to create video teams to address the explosiveness in over-the-top (OTT) advertising.

This approach underscores the challenge the industry faces as it tries to make sense of OTT. With more than roughly 52% of the US population being connected-TV users, it is now clear that OTT has made it to prime time (pun intended).

It’s now more critical than ever for brands and agencies to clearly define and embrace this rapidly growing opportunity in order to improve advertising effectiveness and prepare for this future.

Clearing Up The Confusion Around OTT

OTT has taken on many different meanings for different people, and there are a variety of ways to perceive it, depending on your role within the ecosystem. This has created much confusion for marketers where definitions are being blurred. With the advent of new operators and ecosystem innovation, OTT advertising has started to take on new meanings that speak more about the device used to consume the content and less about the economics and relationship to an operator.

“Over-the-top content” refers to content delivered from the programmer to the end user without leveraging the pay-TV operator infrastructure. However, OTT advertising is an ad rendered on a TV screen, either directly via a connected TV app or a streaming box or stick (versus on a desktop or mobile device).

OTT advertising should be treated differently than other formats of digital video advertising for several reasons.

First, it’s imperative to assume there are multiple people on the other side of the “screen” so advertisers are marketing to households rather than individuals.

Second, OTT devices are mainly used to consume content versus browsing the web, shopping, navigation or social communications. Also, OTT is a static environment that does not change locations. So, every campaign that leverages data or relies on same-device attribution will function differently.

Finally, viewing on a TV screen historically has been a “lean back” experience, whereas other devices are interactive and thus are inherently “lean forward.”

Bridging The Gap Between Traditional TV and Digital Buyers

Now that we have an easily digestible definition for OTT, how do we unleash its power? How do we optimize OTT ads to create a more efficient customer journey?

The traditional TV buyer’s mindset is to treat OTT ads as if they are dealing with linear TV or treat OTT media buying as an extension of broadcast/cable TV buying. This has been driven in many cases by the way media sellers package inventory, with terms like “unified,” “360” or “fluidity.”

However, an individual “stream” – or ad impression, for that matter – on broadcast TV is not the same as an ad delivered on OTT, even when adjacent to the same piece of content at the same time of day. Given the technical characteristics of OTT, the data targeting opportunities are inherently richer, could apply greater personalization and higher relevancy and are even more actionable than traditional TV buying, by bringing data and interactivity to the big screen.

On the flip side, the digital point of view is that an OTT ad is no different than any other digital video ad and should be treated as such. However, we know that television screens in many cases are viewed by more than a single person. More than a third of the time, two or more viewers are watching TV screens at any given time, according to Nielsen (“Co-Viewing on OTT” report, February 2017). The implication is that the same commercial, during a break from the same show, on the same programmer app, when viewed on a desktop or mobile device impacts a “single” person. So, essentially, your reach potential is higher with OTT advertising and this represents a significant opportunity for the industry.

Additionally, marketers who have prepared for OTT with the latest ad tech gadgets, such as data management platforms, CRM or multitouch attribution, will discover many of the tools do not apply in the same ways as on desktop or mobile. This current state of thinking needs to change for the industry to reap the benefits of OTT.

The Present And Future  

Many in our industry believe (or know) that all video, including TV, will be IP-based, dynamic, interactive and/or “super-sized” in the near future. Brands that value building their playbooks and developing strong but achievable KPIs stand to win big.

And, given that more than half of US households already use OTT platforms on a regular basis, now is the perfect time to jump in, learn and leverage OTT to deliver better storytelling to consumers.

Follow Innovid (@innovid) and AdExchanger (@adexchanger) on Twitter.

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