20170918-FreeWheel-THE_POWER_OF_OTT_AUDIENCES___ENGAGEMENT_33页_4mb_4mb

Summary of FreeWheel Signature Insights: The Power of OTT - Audiences & Engagement

Core Content

FreeWheel's Signature Insights report explores the transformative potential of Over-the-Top (OTT) platforms in the premium video economy. It highlights the unique value of OTT for content distribution and monetization, while also addressing the challenges that hinder its full utilization.

Main Points

1. The Acceleration of OTT

• OTT has become a dominant platform for premium video ad views in the U.S., surpassing desktop in Q1 2017.
• It is defined by the IAB as a device that connects to a TV to deliver internet-based video content, including streaming boxes, smart TVs, and gaming consoles.
• OTT is broadly segmented into:
  • Attached Devices (84% of ad views): Devices like Apple TV, Roku, and Amazon Fire TV that stream content directly to TVs.
  • Gaming Consoles (11%): Devices such as PlayStation and Xbox that are increasingly used for video streaming.
  • Smart TVs (5%): Internet-enabled TVs that can access both linear and on-demand content.

2. OTT's Unique Value

• Desirable Audiences: OTT viewers are younger (median age 31 vs. 54 on traditional TV) and more affluent (median household income ~$10,000 higher).
• Engaged Viewers: OTT viewers tend to watch content for longer durations and complete nearly all ads (98%).
• Brand Lift: OTT campaigns show higher brand awareness and favorability than desktop or mobile, as demonstrated by a Hulu study.

3. OTT: From Obstacles to Opportunity

• The platform presents several challenges for marketers and agencies, but these can be overcome with innovation and proper strategy.

Key Challenges and Solutions

Challenge 1: Viewability & Fraud

• OTT is less vulnerable to viewability and fraud issues due to:
  • High authentication rates (68% of ad views are from authenticated users).
  • Closed environments that reduce the likelihood of fraudulent traffic.
  • Full-screen ad experience that prevents multitasking.
• Premium publishers are collaborating with measurement companies to validate OTT inventory, addressing these concerns effectively.

Challenge 2: Incremental Reach

• OTT audiences do not overlap significantly with traditional TV audiences.
• OTT has compensated for the decline in linear TV ratings, with primetime OTT ratings growing while linear ratings have dropped by 24% over four years.
• Viewers treat OTT devices similarly to traditional TVs, watching live content and tuning in during primetime hours.

Challenge 3: Measurement

• Traditional TV and digital measurement solutions are not well-suited for OTT due to:
  • Lack of standardized metrics.
  • Incompatibility with flash/VPaid tracking.
  • Server-side integrations not supported by existing tools.
  • Absence of cookies for user segmentation.
• Alternatives include:
  • Compositional measurement: Using demographic data from other platforms.
  • Ad completion/view-through rates: Leveraging OTT’s high ad completion rate.
  • Custom traffic analysis: Analyzing device ID, IP, and user agent data.
  • Third-party certification: Using tools like Moat to validate OTT ad performance.

Opportunities for Publishers

To fully capitalize on OTT's potential, publishers should:

1. Educate Sales Teams: Equip them with knowledge and tools to represent OTT inventory effectively and address agency concerns.
2. Optimize System Integrations: Ensure compatibility across multiple device endpoints and deliver seamless ad experiences.
3. Leverage Data: Use first- and third-party data to enhance targeting and increase inventory value.

The Bottom Line

OTT offers a compelling blend of digital and traditional TV benefits, making it a critical platform for premium video. While challenges remain, the industry is moving toward standardized measurement and transacting methods. Publishers, advertisers, and tech providers must collaborate to unlock OTT's full potential, ensuring that it becomes a scalable and effective channel for reaching high-value audiences.