The Remaining Barriers to OTT Advertising’s Boom

A wide chasm exists right now between the amount of time that consumers are spending in over-the-top (OTT) video viewing environments and the level of advertising spend being dedicated to this fast-ascending channel. And it’s not advertisers’ fault. At present, the myriad players who sit between the consumer and the OTT content they want to consume are failing to connect the needed dots to enable effective OTT advertising and enjoyable user experiences. In the coming year, that needs to change.

Over-the-top (OTT) video viewing is quickly becoming the new normal, thanks in large part to the near saturation of high-speed internet as well as the low cost of today’s most popular OTT devices, such as Roku, Apple TV and Google Chromecast. Nielsen estimates that more than 50 percent of U.S. households currently use some type of OTT video service.

That said, despite rapid adoption of new OTT services and devices, at least one core TV viewing behavior of the past remains unchanged: People are still watching content on their TVs, with more than 89 percent of viewing time occurring on the traditional TV screen and the remaining 11 percent happening on smartphones, tablets and other non-TV devices.

That said, the advertising experiences of these consumers is drastically different than in the traditional broadcast environment, and often inconsistent. One significant recurring complaint among consumers relates to the repetition of advertisements in the OTT environment. In the early days of OTT, this might have been explained by a lack of demand among advertisers for OTT placements, but that’s often not the case anymore.

Particularly in light of ongoing brand safety concerns in other digital video spaces, many advertisers have been encouraged to shift more budget into the well-understood, long-form content available via OTT. Unfortunately, the present lack of coordination among the various OTT market players is drastically diminishing the availability of this in-demand inventory.

The Era of Cooperation

At present, there is no clear winner or dominant player dictating the future of OTT. And as with any industry sector that experiences explosive growth, there are certain players in the OTT space currently looking to make a land grab by trying to rapidly build and deploy the technology that they do not have. But this is the wrong approach.

The next phase of growth in the OTT advertising space needs to be all about cooperation. Companies trying to own the OTT space soup to nuts are ultimately going to roll out sub-par offerings that result in further fracturing and confusion in an already confused space. Only by opening lines of communication and agreeing on standards and information exchange protocols can the OTT market ever hope to meet the demands of both advertisers and consumers.

At present, ineffective OTT ad experiences often occur because publishers can’t make direct and programmatic buys work together holistically. And it’s not their fault.

Even if publishers direct their OTT direct partners to provide information regarding booked ad categories in given ad pods to their programmatic OTT partners, it’s simply not something that the ad servers are set up to do. Thus, unsold OTT inventory that was offered directly often is not able to be filled programmatically.

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Problems to Solve

To truly open the OTT opportunity going forward, our industry must come together to cooperatively solve for the following two problems —

• Competitive separation: As it relates to OTT ad pods, our industry must solve for the competitive separation problem that exists within the space right now. The current inability to do so is holding back much-desired inventory from hitting the market.
• Measurement: In addition, the OTT space currently lacks standardization as it relates to tracking and measuring OTT audiences. Proprietary solutions being implemented by players like Roku and Google fail to capture a broader view of OTT audiences across platforms and are thus insufficient for advertiser needs. Until the industry can come together to solve for this challenge, it’s going to be hard to truly shift TV dollars to OTT digital.

The OTT opportunity for advertisers is simply too massive for our industry to drag its feet when it comes to enabling proper protocols for filling inventory and measuring audiences. Believe me, there is enough appetite for OTT advertising for the wealth to be amply shared among the many interested players. The sooner we can all come to this conclusion and start working together, the sooner everyone will get a slice of the pie.

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