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Can Advertisers Keep Pace, As Digitization Transforms How Consumers Consume Content
Written by Chris Sheehan, Vice President, Strategic Accounts, Applause 

As with most industries, the media landscape has been entirely transformed by digitalization, dramatically altering the ways in which consumers view content. Viewing patterns are shifting away from traditional television programming to a more on-demand model - and over-the-top (OTT) streaming media services are at the forefront of this movement.

The fallout from these evolving consumer behaviors is dramatic, as one-third of all households have reportedly cut the cord, according to Ocean Media. In addition, in the last five years, the number of OTT-only households has tripled. While this transition has forced companies to reevaluate their content strategies, it has also given them a new medium in which to generate revenue - OTT advertisements.

The OTT platform gives advertisers the rare ability to closely target viewing audiences and layer interactive elements into the experience - capabilities advertisers have valued for a very long time. However, delivering these features in a complex omnichannel ecosystem is an immense challenge. For content providers to truly capitalize on this opportunity, proper ad testing is a must.

Cashing in on the Opportunity

As OTT video continues its rapid ascent among streaming mediums, providers are beginning to cash in on the advertising opportunity. We know that marketers are seeing the value too. In 2018, video ad serving platform SpotX found companies increased OTT spend to 26% of their total video ad budgets, up from 8% in 2017. With demand skyrocketing, it was only a matter of time before OTT providers adopted a more programmatic approach to their ad sales.

In this current market, usable data can make all the difference between success and failure. Companies that offer OTT have gathered a wealth of viewer data that allows them to deliver to more targeted audience segments. A very good example of this is Roku's Audience Marketplace, which the company launched in June 2018. The result was an open market designed to help drive ad revenue for many years to come.

In order to make it all work, though, it is key that quality is at the forefront of everything brands do.

Testing for Success

OTT brings an increased level of difficulty for Quality Assurance (QA) departments, which can ultimately lead companies to try options that are ineffective and cause them to miss out on the OTT opportunity. That is why it is so important to have an advertising-specific testing strategy with the purpose of minimizing risk while maximizing confidence in the quality of streaming experiences.

But not all testing strategies are created equal. Every company - and every industry - needs to have its own tailored plan that weighs the importance of things such as release cadence, risk tolerance, and test coverage, as well as complexity based on the company's unique specifications.

To ensure you are building the best content for OTT, and offering a great ad experience, here are five key things to validate:

Reach: Your ads may be targeting your customers' wants and needs, but are they reaching the right audiences? Are they relevant and engaging? To validate that your ad content is performing as it should, you must first test that your ads are reaching your audience, then measure them with your personas. To do this, you should receive feedback from real customers, in-market to see if your ads are reaching the right customers and resonating with them.

Location: OTT has made programming more mobile, which means viewers can now take their favorite shows on the road. That increases the potential for more frequent viewing sessions, but it also presents a problem for ad delivery. If a viewer leaves their home in Boston to go on vacation in Florida, they will still expect to see ads that are relevant to them in their hometown, not in the place they are visiting. With that in mind, OTT providers need to test in-market to see how ads are impacted by a changing location.

Device and Screen Size: Ads should play with the same quality as the OTT programming. Viewers can become confused or frustrated if an ad does not show correctly on their device or does not display with the right resolution, causing them to tune out the ad entirely. Testing on all relevant devices that ads will be served on is important to ensure customers are receiving a great ad experience no matter what they are using to watch.

Time of Day: The audience that is streaming an OTT platform at night is often much different than the audience in the morning, even if the same program is being streamed. Moreover, the things people will be willing to buy differ based on time of day. Because of this, ads need to be tailored by the time, the season, and the product they are selling to verify they are relevant and will provide the best return.

Viewer Age: Validating that the right type of ad is played during the right program is essential, especially if an ad is not appropriate for all ages. The mobile nature of OTT is making it more viable for parents, as children are often watching programs on their parents' devices. Ads should take into account the programming being watched and who is likely watching it to ensure children are not being shown irrelevant or inappropriate ads that will cause their parents to spurn a particular company or product.

OTT is the Next Frontier

OTT is the next frontier of video consumption, attracting a fresh ecosystem of viewers that will maximize existing revenue streams. Key to capitalizing on the new service segment is getting the ad viewing experience right, which calls for refining and testing to ensure that the right ads are served up at the right time in the most consumable manner.

With more than $2 billion at stake in the OTT ad market, there is no room for compromise. Quality must win out. The key to capitalizing on the new advertising segment is getting the ad viewing experience right. By embracing these suggestions, companies can ensure seamless ad delivery without barriers to future success in OTT.

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About the Author 

Chris Sheehan, Vice President, Strategic Accounts, Applause

 

As VP of Strategic Accounts at Applause, Chris is responsible for developing and executing the company's retention and expansion programs for North America Enterprise customers. Prior to his role in Customer Success, Chris led Applause's long-term Product Strategy team. He currently serves on the boards of Xconomy and CWE and has led many investments in the Boston area as a software VC.

Published Wednesday, May 22, 2019 7:30 AM by David Marshall
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