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Event Summary:

At a time when streaming content is growing and “anytime, anywhere” viewing on phones and tablets is common, what does it mean to “watch TV”? Does it always involve a TV set with cable or satellite reception, watching shows from a traditional TV network? Or, do other types of viewing replace “TV” as “TV” in consumers’ mind?

As consumer habits evolve to embrace content across multiple platforms, advertisers and brands need to adapt to shifts in viewing behavior and find new ways to reach target audiences and increase engagement. Following are some key takeaways from the ARF’s first OTT event, dedicated to understanding the OTT landscape, opportunities, and pain points.

Key Takeaways

  • OTT usage and streaming continue to grow rapidly:
    • By 2021, 62.1% of the U.S. adult population is expected to be OTT users (vs. 69.2% for Pay TV and 57.7% for Connected TV Users). (Rockwood, Turner)
    • By 2018, there will be 240 million OTT devices in China. (Zhang, Miaozhen).
  • Streaming is often complimentary to pay TV.
    • 75% of streamers have cable. (Ramspacher, GfK)
    • Only 34% of Connected TV users are Cord Cutters/Nevers. (Bordes, CBS)
  • OTT offers opportunities for audience-based TV buys, precision targeting at scale, viewability, a brand safe environment. OTT is a nice bridge to make linear TV better and improve the pitfalls of digital (Horstman, TiVo). There are no incentives to run bots on DMVPDs to create ad fraud (Yale Wang, FuboTV).
  • But lack of uniform measurements and better data are big barriers to fully monetizing OTT. On the issue of measurement, Wang of FuboTV noted that it would be ideal to have one or two external measurement partners that all agreed on uniform metrics. But the reality is that they are competing agendas. Steuer of Omnicom stated that “I still don’t have data to power, to buy, and plan to scale.” Rooke and Schafer from the FreeWheel Council recommended that agencies and marketers should NOT wait for a single measurement standard. While a single cross-platform solution would enable buying/selling effectiveness, multiple providers are needed in the toolbox.
  • Let content lead. Start with the best content then select the platform that best reaches your target audience (Mark Marshall, NBCU). It doesn’t really matter where it is. People will go to good content (Alex Wallace, Oath). If you make advertising that is content (e.g. event sponsorship, native advertising), people will watch it and engage with it (Jonathan Steuer, Omnicom).

Event Content

What is OTT? OTT means very different things to different people. For the purposes of this talk, OTT is defined as “using apps to stream video content via the internet to a viewing screen (television set, computer, or mobile device). This presentation provides an overview of the OTT ecosystem and consumption trends.

Key takeaways:

  • Growth in OTT is driven by a perfect storm in the ecosystem that occurred with the convergence of high penetration of broadband, increasing quality of digital video content, increasing affordability of smart TVs and streaming devices, and more choices in ad models.
  • According to a recent IAB survey, top three reasons for increased OTT use in 2017 vs 2015: Bought or received new device that streams video, more streaming availability of video content, increased ease in streaming video to device.
  • Prediction: Pay TV will decline slowly while Connected TV and OTT usage will continue to grow. By 2021, 62.1% of the adult population is expected to be OTT users (vs. 69.2% for Pay TV and 57.7% for Connected TV Users).
  • OTT shifts viewing behavior. Post OTT introduction, light TV viewers increase viewing time by largest margin (net increase +32), while heavy TV viewers reach a time ceiling and reallocate their watching.
  • On the horizon: IPTV. Future is a video world delivered via IP, where viewers can be decoupled from the program and can be sold even if the program overall has a poor composition for the target.

 

Keynote:  Monetization in a Screen Agnostic Marketplace
Mark Marshall – EVP, Entertainment Advertising Sales Group, NBCUniversal

If you lived in NYC back in 2006, you watched the finale of Will & Grace only one of three ways (antenna, Time Warner, or Direct TV) at 9pm. Now, there are approximately 800 touchpoints and growing in viewing opportunities. However, premium content still reigns king in attracting consumers at scale. This presentation provides an overview of how NBCU is monetizing the growing OTT audience.

Key takeaways:

  • OTT growth at NBCU: +49% YOY growth. This is 4X vs 2015 and faster growth than mobile. 66% of OTT impressions are served on a TV screen.
  • Let content lead. Start with the best content then select the platform that best reaches your target audience.
  • The most undervalued opportunity in media sales is in demand long term, which has vested interested viewer who sought out content.
  • Challenges in OTT: accurate measurement across platforms, ease of use for advertisers, discovery and promotion.
  • Co-viewing is another big challenge. NBCU estimate that they are missing 30% of The Total Audience by not getting credit for co-viewing. This results in tens of millions of unmonetized dollars.

 

Advertising in the OTT Era Today and Looking Forward to 2018

MODERATOR:
Josh Chasin – Chief Research Officer, comScore
PANELISTS:
Rob Aksman – Founder & Chief Strategy Officer, Brightline
Alex Wallace – Head of OTT Video and Oath Studios, Oath
Walt Horstman – SVP/GM, Advanced Advertising & Analytics, TiVo
Jonathan Steuer – Chief Research Officer, Omnicom Media Group

As more and more eyeballs shift from traditional platforms to OTT, what is the prognosis for advertising? Will the dollars follow the eyeballs? What models for ad insertion will win out? Who will the winners be—and the losers? This panel discussion tackles the challenges in advertising in the OTT space.

Key Takeaways:

  • Need better data to get the ad dollars to follow the eyeballs. According to Steuer, it’s difficult to get clients, who are used to using GRP for media buy, to understand how the consumers are moving. It’s only when we have data that we can use, that we can truly update the tools we use to buy and plan media. “I still don’t have data to power, to buy, and plan to scale.” Horstman also stated that we need “robust, trustworthy data within TV” to help with the buy side.
  • Biggest challenge in streamlining advertising are walled gardens. Steuer commented that “walled gardens inhibit conductivity necessary between data sets” that would yield truly personalized and targeted messages. Aksman stated that the technology is here, it’s the people that is preventing the sharing across walls.
  • OTT is an opportunity to avoid past pitfalls of digital. Horstman noted that OTT is a vehicle for better targeting, smart capabilities – a nice bridge to make linear TV better and improve the pitfalls of digital.
  • Good content is still the way to engage hard to reach consumers. Chasin asked if we were creating an environment where there is a tier of consumers not reachable by advertising (e.g. Netflix, ad-free Hulu). Wallace answered that it doesn’t really matter where it is. People will go to good content. Steuer agreed and said that if you make advertising that is content (e.g. event sponsorship, native advertising), people will watch it and engage with it.

Cordless Americans: A Complete Picture of the New TV Viewer
Karen Ramspacher – SVP, Consumer Insights & Trends, GfK

GfK MRI’s latest Cord Evolution research dives deeper into the viewing behavior of key “cordless” segments – getting to the subtle nuances that separate them from the mainstream TV viewing audience. This cordless population is growing, and reaching them is becoming more of a challenge.

Key takeaways:

  • 22% of Americans are cordless; 69% of this group are cordless streamers (37 MIL).
  • For younger folks, share of streaming is increasing but for total pop, 55% of TV is live. (42% for P18-34).
  • Streaming is complementary for 60% of cable households. 75% of streamers have cable.
  • For Heavy Streamers (11% of total pop), 34% are cordless and 83% say streaming has replaced traditional TV.
  • Best media channel to reach Cord Cutters is Short Video; for Cord Nevers, it’s the Internet. They tend to differ on apps/streaming services usage, but for first time, Netflix is a top streaming service for both groups.

 

Demystifying the Digital MVPD Viewer
Dan Robbins – Head of Ad Research, Roku
Priscilla Aydin – Associate Director, Primary Research and Insights, Omnicom Media Group

The size of cord-cutters is bigger than the size of the Hispanic population. As any 21st century brand should have a multicultural strategy, they should also have a cord-cutter strategy. This presentation shares findings from a recent study of active Roku viewers (15M+ US households) on their DMVPD usage.

Key takeaways:

  • Most DMVPD viewers trialed 2+ services before buying. They learned about services through TV and advertising, word of mouth less so.
  • Price/value and channel offerings are among the top three most important decision factors. This highlights that viewers want control and choice more than ever. They are not tied down to a specific brand and are willing to experiment.
  • Although most DMVPDs focus on live TV programming, movies was the number one key driver for programming (sports was #2). Streaming and Netflix may have blurred movies and “TV” so that it’s all considered as content.
  • Overall, viewers are bullish on their DMVPD services. They expect to permanently replace TV while keeping their SVOD services.
  • Targeted brand and tune-in advertising resonate best. 31% of millennials are 31% more likely to say that they appreciate relevant ads when watching TV on their DMVPD service.

 

Lessons from building a new OTT offering
Andy L. Fisher – Chief Analytics Officer, Merkle (Interviewer)
Yale Wang – VP, Head of North American Marketing, FuboTV

FuboTV, started as OTT for soccer three years ago. This year, they changed to a DMVPD, a paid OTT, live streaming service. This fireside chat focused on how Fubo TV, as an upstart in the OTT space with no legacy TV business, is dealing with measurement and business challenges.

Key takeaways:

  • Viewability is a top demand from advertisers. But as a marketer, Wang is also concerned about ad fraud. Since there is no incentive to run bots on DMVPD, this can be a safe brand environment.
  • Some of the biggest challenges FuboTV faces include deciding how to measure, how to use data, how to scale, how to reduce churn rates, what are the right content offerings, how to build a tech infrastructure that prevents buffering or downtime.
  • On the issue of measurement, Wang notes that it would be ideal to have one or two external measurement partners that all agreed on uniform metrics. But the reality is that they are competing agendas. He predicts that moving ad dollars will force changes.
  • A top trend to look out for is the growth in eSports. Wang predicts that it will be one of the top major leagues in America in two to three years. Sports owners are already buying digital games.

New Living Room – Let it Stream
Stephanie DiVito – Sr. Director, Media Intelligence, ESPN
Flora Kelly – Director, Media Intelligence, ESPN

Sports fans are like snowflakes – shaped by region, age, family, culture/race, media. Media plays a larger role in fandom as they age, typically around 18 years old. At this age, a “media hand-off” typically occurs as they start to want to watch a game on TV vs. watching it at an event. But now, the “hand-off” is to different media. This presentation discusses the evolution of streaming and sports’ place in this new world.

Key takeaways:

  • Fans are showing more willingness to stream sports, especially among younger fans. 39% of P18-34 chose streaming over cable.
  • However, sports viewing is still mostly in an on-demand world. Fans struggle to conceptualize how streaming and sports can co-exist. “Sports streaming” is outside their vernacular.
  • For ESPN, 70% of streaming usage is from OTT TV. Mobile streaming accounted for 15%.
  • But the number of mobile streaming users are greater at 61% (vs. OTT’s 22%). 51% of ESPN mobile streamers consider themselves Avid Sports Fans, higher than the average ESPN streamer.
  • Emerging trend to look out for is DMVPDs. The category has yet to be defined but the platform caters to younger sports fans. 43% of DMVPD streamers are likely to be millennials.

 

Made to Measure (M2M.tv): Launching a Fashion OTT
Susan Hootstein – Executive Director, Made2Measure, Fashion OTT, WME | IMG

When WME acquired IMG, one of their missions was to combine all owned content, predominantly sports and fashion, into one vertical that would make it easy for the viewer to experience as well as act as “the super bowl of fashion.” In April 2015, Susan Hootstein was charged with launching the first fashion OTT. The presentation discusses this journey in successfully reaching a fashion-centric audience through OTT.

Key takeaways:

  • Runway was originally thought of as filler but once they realized that it resonated with an audience, they made prime programming and built infrastructure to support it.
  • As the fashion industry is so fickle and reticent to every kind of change, there was a need to find a way to push to impress that crowd. They couldn’t go too broad as it would have alienated the influencers.
  • Challenges: How to monetize the OTT content, staying true to their voice and engaging with influencers while trying to broaden out more commercially.

 

Power to Connected Devices:  How OTT and Digital Distribution are Changing How We Watch TV
David F. Poltrack – Chief Research Officer, CBS Corporation and President of CBS VISION (Introduction)
Nathalie Bordes – VP, Business Intelligence & Research, CBS Interactive (Presenter)

OTT on C-TV is the fastest growing video consumption today. This presentation discusses the why, how and when users are streaming on various digital platforms and across multiple content verticals in live and VOD settings.

Key takeaways:

  • Consumers are still sticking to the big screen.
  • Why people stream: convenience and choice. They are still interested in premium content, but want to choose the platform.
  • Connected TV users cannot be viewed as one target audience. Only 34% of C-TV users are Cord Cutters/Nevers.
  • Nearly half of viewing time is spent on current season content (19% on most current episode; 13% on catch-up from start of season; 12% on live stream).
  • Consumers are partial to one platform. They may not discover new content on OTT apps, but OTT app usage grows over time and becomes primary platform after 3 months.

 

OTT and the Dynamics of Choice
Julie Detraglia, VP and Head of Ad Sales, Hulu

We are in the new era of TV-all your content in one place, streamed, whenever you want to watch it, whatever content. This presentation provides findings on OTT viewing behavior based on analyses of Hulu’s subscriber level behavioral viewing data.

Key takeaways:

  • On-demand viewing is the new normal. Viewership on Hulu is especially high before the next season’s premiere. Promoting season two led to new people watching season one on Hulu.
  • How the viewers watch (appointment vs. binging) shows a consistent pattern per viewer. All viewing peaks in prime time, no matter what device is being used.
  • Viewers also engage in “Palette Cleansing.” Viewers use TV to manage their moods. This behavior is significantly stronger among Hulu viewers compared to linear TV viewers.
  • Viewers pay more to avoid seeing ads; however, most subscribers choose ad supported services. Consumer choice plays a role in effectiveness of that ad. Ad effectiveness was higher for Hulu, as measured in terms of general recall, brand recall, message recall, and likeability.
  • Extended reach: 50% of the audience Hulu provides was incremental to traditional TV.

The State of Unified Video: Screens and Wires are Mere Details
James Rooke – General Manager, Publisher Platform, FreeWheel
Bryon Schafer – SVP, Measurement & Insight, Otter Media

The rise of digital consumption of premium video makes it ever more critical to close the measurement gaps. However, technology, measurement and organizational alignment continue to make transacting across screens difficult. This presentation from the FreeWheel Council discusses how premium video providers are working towards the consolidation of their investment across all video.

Key Takeaways:

  • Measurement remains the number one challenge for cross-platform executions, complicated by the changing landscape.
  • Demo guarantees are the favored currency of almost 40% of cross-platform campaigns.
  • Alternative metrics are being leveraged, and audience targeting and ROI/attribution are on the rise.
  • Most marketers and agencies believe that the industry will end up with three to four key third-party measurement providers.
  • While a single cross-platform solution would enable buying/selling effectiveness, multiple providers are needed in the toolbox.

Research Study:  Maximize Media ROI by Cross Screen Reach Measurement and Planning
Dan Zhang – Head of Data Product, Miaozhen

The Chinese OTT market has increased by 13% compared with 9% worldwide. In 2016, China had over 110 million families with OTT TV. It is forecasted that there will be 240 million OTT devices in China in 2018. This presentation provides an overview of the OTT landscape in China as well as Miaozhen and Xinisight’s single source panel solution to measuring cross-screen viewing in China.

Key takeaways:

  • Internet companies (e.g. Alibaba and Tencent) are rising quickly in the OTT market. They are building up a closed-loop OTT ecosystem.
  • OTT has become an important channel to deliver content generated by traditional media.
  • Pre-roll has been widely accepted by OTT users.
  • Cross-screen total reach is 20-30% lower than added total reach.
  • 40% to 50% of impressions are over-exposed.

 

Latest Opportunities for Advertisers:  Programmatic TV Buying across OTT, Linear TV, Addressable TV, Connected TV, and VOD
Jes Santoro – Head of Sales, Adobe

With increasing media fragmentation, data explosion, and digital disruptions, it is increasingly difficult to deliver target audiences effectively and at scale. This presentation provides an overview of the fractured marketplace and Adobe’s solution for brands to plan, buy, measure, and optimize global advertising.

Key takeaways:

  • Non-linear TV audiences continue to grow. Nearly 190 MM people are currently using an OTT device. 60% of the pop will be using an OTT by 2020.
  • We are not reaching the full scale of the audience that we are going after.
  • We are piling on frequency, instead of extending reach.
  • We can’t look at OTT or any channel by itself, or we will miss meaningful portions of our audience.
  • Focus on bringing it back to the consumer experience. Make it relevant, compelling, everywhere.

 

Cross-Screen Measurement and Audience Validation for OTT Campaigns
Andre Swanston – Co-Founder and CEO, Tru OptikDavid Wiesenfeld – Chief Strategist, Tru Optik

OTT and Connected TV advertising are all the rage, but measurement challenges have made it difficult to obtain even basic KPI’s like unduplicated reach and frequency for OTT campaigns. This presentation discusses challenges in cross-screen measurement and Tru Optik’s solution.

Key Takeaways:

  • OTT on CTV offers audience-based TV buys, precision targeting at scale, premium content, 100% ad viewability, 98% completion rate, no bot traffic.
  • The biggest challenge for CTV OTT is in accurate measurement. CTV devices do not accept cookies and do not have device id’s. Tru Optik found that 12-15% of impressions (bought for CTV OTT) ran on full video players on desktop or mobile – not connected CTV OTT.
  • They also found that registered user data is often misleading for OTT campaign measurement. They did not see fraud, but rampant password sharing, lack of central or 3rd party validation, and base line error cheat digital publishers on reach.
  • Tru Optik’s CAV: Cross-Screen Audience Validation measures and validates unique household reach for cross-screen OTT ad campaigns – HH level reach and frequency (de-duped across devices). CAV also verifies percentage of in-target impressions using demos, 1st-party data, or advanced characteristics from dozens of leading data providers.