As recently as 2010, broadcast advertising was relatively straightforward. An oligopoly of advertising brands and television companies reigned supreme over a business model that had been largely unchanged for over half a century. Companies produced television or radio adverts of specific lengths, booked packages of ad slots, and sat back to wait for a response.
OTT Disrupts The Norm
Then OTT arrived. This is one of the internet’s most disruptive trends as over-the-top content involves an internet-based media delivery platform. Rivaling those long-established cable, satellite and terrestrial TV services (and increasingly replacing them), OTT has seen advertising evolve from a passive experience into something far more dynamic and responsive. From click-throughs to skipping times, creating OTT advertising requires a complete shift in thinking compared to traditional advertising. A new way of thinking compared to traditional adverts.
Performance Tracking Gets A Facelift
Since everything we do online can be recorded and reported, OTT advertising also demands new methods of performance tracking. In the 20th century, a broadcaster would predict likely audience figures for a program. These could be reviewed by advertisers to determine whether that program was worth advertising alongside. Perhaps the most famous example of this involves the Super Bowl, where world-famous TV ads including Apple’s 1984 and Budweiser’s Wassup made high-profile debuts. Advertisers knew that a Super Bowl ad would reach a huge audience. That made the punitive cost worthwhile.
However, the fragmented and still-maturing OTT market represents a very different proposition. For one thing, there are a number of competing platforms – Apple TV, Roku, proprietary smart TVs, etc. For another, there is still a lack of standardization in terms of file formats, despite the best efforts of the Interactive Advertising Bureau and their global-standard Video Ad Serving Template. The concept of interactive ads is new to many companies, and running a passive ad already seen on terrestrial TV can seem rather dull. Consumers now demand experiences, not passivity.
Clearly, measuring ad performance on OTT platforms requires a different approach to traditional broadcast media. Indeed, advertising effectiveness can’t be judged purely on audience figures anymore. Key performance indicators for OTT ads can be affected by the type and size of the device being used, the time of day the ad was seen, and the degree of interactivity it offers – from a simple ‘skip’ option to click-through traffic generation. There are also compatibility issues between divergent formats like MP4 and VPAID. These need to be anticipated and resolved depending on which mediums are being used to advertise.
How Would An Advertising Report Be Structured?
Any advertising performance report must be broken down by viewing platform since an authoritative industry survey last June found completion rates for watching ads on OTT devices in America varied widely according to the device itself. While smartphones averaged 78% completion, connected TVs recorded 93% – a difference confirmed by other 2016 data. These findings are logical – anyone holding a smartphone has their thumb ready to click or swipe, whereas a smart TV viewer is less likely to have the remote control at their fingertips. There also appears to be more willingness to watch ads on a television than a mobile device, since the former is heavily associated with ad consumption where ads on mobile are more likely to be regarded as an unwelcome intrusion. One obvious takeaway is that ad performance improves as screen size increases, which might direct ad spend to longer programs more likely to be viewed on a TV than a phone.
If an OTT ad provides a degree of interactivity, metrics like the click-through rate (or CTR) need to be measured and considered. Any traffic should be directed to a client-owned website that can also be interrogated for data – how long people stay on the site, what navigation path they follow and so forth. It’s easy to differentiate ad-driven traffic from normal visits by creating a landing page dedicated to a specific ad campaign.
With OTT ad spend expected to hit a staggering $31.5 billion in two years’ time, an entire industry is developing around analyzing audience engagement with OTT ads. It’s important to examine the points at which people clicked off a skippable ad (to consider whether it’s failing to engage or deliver its key selling points), and to establish which source sites are generating the highest traffic volumes. If a high percentage of traffic is coming from a particular audience demographic (such as fans of reality TV shows) or a certain region, this can be invaluable for targeting those audience demographics in future ad campaigns.