For this upfront season, over-the-top (OTT) advertising is at the top of the “transformation” agenda for the TV industry. In fact, connected TV (CTV) and OTT advertising is expanding at the fastest rate of any major medium and will reach $4 billion this year and $5 billion next year, according to Magna’s latest forecast. Even with this rapid growth, OTT ad spending is still catching up with consumption — it’s just 3% of TV ad budgets.
To win over advertisers, we’re witnessing a battle brewing at the agency level — people are vying for marketers to shift budgets to CTV and OTT. Many traditional TV buyers have renamed themselves as “video investment” teams, and digital buyers are emphasizing their audience targeting, measurement and attribution prowess to stake the vast, growing CTV opportunity.
As the competition rages on between the media giants and the distribution platforms to grow their direct-to-consumer (DTC) streaming offerings, the OTT ecosystem is becoming ever more complex and fragmented, which makes the buying experience even more confusing for advertisers. Compounding the market confusion is the rise of new entrants that claim to do the same thing but are executing differently. Advertisers need a checklist to truly understand what they are getting.
Amid the disruption, here’s what marketers should be zeroing in on to overcome underlying challenges and bolster CTV’s position in building a scalable media plan:
1. New Innovations In OTT Addressability
The scale that is now emerging in CTV is enabling marketers to drive addressability — the ability to serve different ads to different people during the same programming — and to precisely target their audience across many interest categories. In evaluating the targeting capabilities of OTT providers, it’s important to ask where the data is coming from and assess the accuracy of the viewer profile.