OTT viewership has increased dramatically in the last year. So, it is no surprise that ad dollars are pouring into the category. Reports estimate that advertising revenue in the market just exceeded $50 billion for the first time. And as more OTT options and channels emerge, and as OTT advertising capabilities and measurement grow more sophisticated, investments will continue to rise.
Beyond growth, however, how else will the OTT ad landscape evolve this year? 2017 saw a number of unique developments, from more traditional broadcasters entering the space to a surge in acquisitions. But what will happen in 2018?
Creating a Leakproof Life Preserver to Save Journalism
It was Jeff Zucker - then head of NBCUniversal, now running Donald Trump’s favorite, CNN – who coined the famous cautionary phrase, trading “analog dollars for digital pennies” nearly 10 years ago. He warned of an economic Armageddon as digital advertising drained high-priced, high-margin volume away from traditional TV broadcasters.
He was right. In fact, a decade has meant the continued crushing of the revenue streams of more than just the broadcast networks, but journalism at large. Newspapers are increasingly shutting down their print editions; many magazines have it even harder. Relentless innovation in programmatic advertising gives marketers the ability to navigate autonomously to the highest value/lowest CPM impression.
Video has attracted the interest of advertisers, which means that it has become a point of emphasis for publishers as well. This has brought on increased competition for traditional pre-roll inventory, forcing both advertisers and publishers alike to explore new units that can deliver video experiences.
One area that has grown immensely in popularity is native video, with publishers like The New York Times, The Wall Street Journal, Hearst, Forbes, The Huffington Post and BuzzFeed all exploring native models. Native’s growth isn’t simply due to the fact that it’s available and fulfilling the market demand for more inventory. Instead, it’s growing in popularity - and performance - for reasons that fly in the face of conventional ad industry wisdom. Here’s a look at what’s driving native video’s growth.
It didn’t happen as quickly as it did in display advertising, but last year saw a tipping point when the majority of US digital video ad spend was transacted through programmatic technologies, according to eMarketer. It is no wonder these systems are forecast to account for 74% of video spending by 2018 - advertisers now have an insatiable appetite for video inventory, and they are pushing publishers to offer space using the same data-driven trading technologies they currently enjoy in display.
According to the FreeWheel Video Monetization Report: Q1 2017, 16% of all ad views took place on short-form video clips. However, in Q1 2017, 58% of all video starts were clips (less than 5 mins) and while less time is spent and fewer ads are served compared to long-form and live content, the monetization strategy and user experience of short-form content, given its sheer volume, is of great importance to premium video providers.
The FreeWheel Council for Premium Video set out to study the impact on the viewer across different ad experiences when watching short-form video. Partnering with RealEyes, a leading emotion measurement platform, we exposed 2964 adults aged 18-49 to a set of nine different scenarios of premium video content and ads, to measure the different levels of engagement and emotional reactions through facial recognition technology, as well as surveying them on their overall experience.
The results of this unique study were really interesting:
Don’t blink or you might miss it.
Last week, it was reported that Mars and Duracell are each airing two six-second television ad spots during this Sunday’s Teen Choice Awards. Fox announced that the ads, which take the place of a single 15 or 30-second ad, will be part of new 29-second pods that will begin by telling viewers to stay-put for four six-second ads.
The reasoning behind this move should come as no surprise - today’s teens show a clear preference for short-form content and clearly seem to be influenced by short ad lengths.
But the news underscores a bigger issue - are demographics the key driver of shorter ad lengths?
Digital video is quickly becoming the new hero of the ad world, thanks to its combination of the power of TV and the targetability of digital.
But in a fragmented media environment, with consumers viewing content across multiple screens, executing video buys can be a complicated undertaking. For maximum effectiveness, audiences need to be targeted and pieced together from a number of sources. Hence, digital video requires multiple buying styles, unlike the relative ease of buying a TV timeslot.
Programmatic approaches can help manage these complexities. Savvy marketers are making it their business to not only understand programmatic principles, but to flip traditional planning and buying methods, by partnering with the major supply sources to effectively plan for the best outcomes and ensure brand safety.
If you’re confused on best practice for planning video across screens, here are five tips to help navigate the minefield.
More people are paying for more streaming video. Netflix’s Reed Hastings and Amazon’s Jeff Bezos have insisted that people owning multiple subscriptions will be the norm. On Netflix’s recent Q2 earnings call, Hastings emphasized that Amazon’s success in certain markets has not taken away from Netflix’s.
A recently published report from IBB Consulting shows the underlying trends behind these claims, revealing that half of paid streaming users subscribe to at least two services. Streaming users are also prepared to spend on additional services or even pay more for the subscriptions they already have. In fact, based on average SVOD pricing, a majority (61%) of SVOD subscribers are willing to pay at least 20% more for their favorite service. 29% of paid OTT video subscribers plan to add an additional paid service within the next six months.
Topics: IBB Consulting