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OTT Represents a Huge Opportunity for Advertisers, But Buyer Beware

Written by: Douglas Pfaff | March 25, 2019

shutterstock_564559576 Marketers could lose up to $10 million annually in OTT ad spend by 2020, according to Pixalate. That prediction was part of the company’s Q3 2018 report that found 19 percent of OTT ad impressions globally and 18 percent of impressions in the U.S. were fraudulent or invalid.

As much as OTT opens up exciting opportunities for advertisers, the industry is in its nascent stage, which means there are going to be bumps in the road. It’s the Wild West, and some providers may promise more than they can deliver. In such an environment, the best strategy is “buyer beware,” and the two key elements advertisers want to look for with a partner are reporting and transparency.

That doesn’t mean advertisers should eschew OTT, however—quite the contrary. The proliferation of streaming devices in American homes, coupled with consumers’ seemingly insatiable appetite for content, is creating a space ripe for creative and targeted ad spend.

Prime time all the time

According to a 2018 report from the Video Advertising Bureau, there are 820 million connected video devices in the U.S., and 71 percent of internet users use an OTT service. Nearly one-third of OTT subscribers hold three or more means of accessing OTT content, and 65 percent of people who use a second screen while streaming have looked up info on a product that’s been advertised in a TV show. The report projects that by 2021, “about 200 million U.S. consumers will use an OTT video service or connected TV at least once per month.”

Not only are viewers watching more content, advertisers can now capture eyeballs everywhere: plains, trains, automobiles and homes. It’s prime time all the time, anytime and everywhere. Moreover, a key feature of watching OTT is that the ads are non-skippable, giving advertisers a captive and engaged audience.

Choosing the right partner

Here are the four fundamental elements to focus on when looking for the right OTT partner.

Quality of and access to the inventory—Let’s face it, not all publisher sites are created equal. Are your impressions being served on Netflix or on FireplaceTV? It’s important to know what direct-to-pub relationships the provider has, and if the provider is the publisher site or if you are going direct. Because of the nature of the digital business, there are a lot of fly-by-night companies that are just looking to get bought out and take the money and run. Providers that are diverse—those with more hands in the pot and with access to digital as well as social, linear and audio—are bound to be more reputable.

Reporting—Before committing to a campaign, ask to see the dashboard and a demonstration of the company’s capabilities. Find out how the company is going to report campaign metrics and the inventory being accessed. It's necessary to find a provider that can supply real-time reporting, which enables the agency or advertiser to monitor the campaign and pivot and adjust if necessary. Getting a data dump every three months doesn’t allow for a quick reaction. For example, if your campaign lasts for a quarter, and you get a data dump at the end of the first month—and adjustments need to be made—you have potentially wasted 33 percent of your campaign dollars. In the worst-case scenario, without real-time data, you may not get actionable information until after the campaign is over.

Targeting and data—The ability to drill down to an impression is vital to a successful campaign. When looking at partners, ask about their data-layering capabilities and how finite they can go. Be sure to discuss the targeting and the data that you're looking for with your provider upfront to verify that they can facilitate your specific needs.

Once you are confident that the provider can target the desired demographic, you want to be able to see where the impression was served—not only who, but where? Was it to connect TV or online video; what was the operating system and the platform? Ask the provider to show you how they've executed this type of targeting and provided this kind of data for another client in the past. A reputable company should have campaigns on air already and should be able to give you a test drive of their dashboard and their reporting capabilities. Don't be afraid to ask for it.

Service—The best way to guarantee good service is to go with a proven partner. If they are a big enough company, you've probably worked with them through print, television, radio or at home. When considering a new partner that you haven’t worked with before, you want a company that's as diverse as possible and one that has a proven track record. Again, it’s best to avoid the fly-by-night outfits that are looking to get in and get out quickly to make a buck. Do your homework: Read the trades, do a Google search. Make sure you know who you are dealing with.

Our industry and consumer appetites are changing at an accelerated pace. What once was taking place over 10 years is now happening over 10 months—think of the time it took to move from linear to cable versus cable to digital. As the industry evolves, reporting and transparency will continue to be pushed to the forefront. In the meantime, the Wild West is full of those hoping to strike it rich in OTT partnerships without delivering the goods. Advertisers and agencies need to be as educated and discerning as possible while exploring the new frontier.

Douglas Pfaff is the EVP of business development & partnerships at Katz Media.