To many over-the-top (OTT) providers, an ad-supported video on demand (AVOD) service is merely a tool to garner interest and funnel viewers to their higher revenue-generating subscription video on demand (SVOD) products. As a result, they don’t feel the necessity to innovate around advertising. By failing to think outside the video-advertising box, though, they’re missing out on an enormous opportunity to improve the advertising experience for users and to improve the efficacy of ads.
OTT can help advertisers spend money more efficiently and more intelligently. But with AVOD services, many marketers are unsure how to define the channel, and so they use a mish-mash of the tactics they used in traditional TV and digital advertising. This approach could diminish OTT’s advertising potential before the channel truly gets off the ground.
AVOD services are in a unique position. While these old-school tactics may be “good enough” for OTT, there’s an opportunity to do better and to define a whole new genre of video advertising. So the question OTT services need to ask is: “If anything were possible, what kind of ad experience would we want to build?” To try to answer that question, it helps to focus on what OTT offers in terms of personalization.
Pathway to personalization
Personalization has been promised to digital advertisers for years, but technology companies have found it difficult to deliver truly personalized results. Still, consumers demand personalized experiences, and the rise of OTT itself serves as a great example of that. Viewers want the convenience to watch what they want, when they want, which is why they are eschewing the traditional TV model for on-demand services.
The desire for personalization is also moving consumers toward niche services that align with their tastes. Netflix, Disney, Apple and Hulu get plenty of headlines, and their content models offer something for everyone. But for every big-tent provider, there exists a smaller, niche OTT offering. SVOD has services like the Criterion Channel, for historically important films. In AVOD, there are players likeCrunchyRoll, an anime-focused service. There is an opportunity for the ad products and ads themselves to reflect those different niches.
Tapping into this desire for personalization will require a little input from the viewers themselves. For example, many OTT services already have built-in profiles for content recommendation: Netflix asks “who’s watching?” upon login. YouTube’s Survey program serves ads to viewers that ask personal questions in order to “improve relevance of videos and ads you and others may see.” But OTT services can build more-detailed profiles for use in both advertising and content recommendation.
One way to accomplish this would be to present users with a grid of product categories, allowing the viewer to select what’s of interest to them by making, say, 10 choices. The viewer could select across a number of categories: golf, tennis, business, social responsibility, South American travel ans so on. This information would then be turned into a profile of the user’s advertising preferences, enabling the video service to deliver a more-positive ad experience, while also using the data to sell targeted, addressable media to advertisers.
Some services already let viewers watch an extended block of advertising up front in exchange for an ad-free, or ad-light, experience. The consumer-input-based model just described would hinge on something similar: exchanging free programming for a certain amount of time spent with promotional programming each month. Instead of watching 30- or 60-second spots that are bought programmatically based on viewing habits or other online behavior, the viewer will instead see a handful of 5-minute videos over the course of each month, based on the topics in which they declared interest.
These don’t necessarily need to be traditional ad messages either. They can be high-quality content, with a story and a narrative. If it’s well produced, and viewing that content is the price of entry for access to the premium programming the service offers, then viewers will be receptive.
This should appeal to advertisers as well, provided they are willing to embrace granular audiences and give up on the idea of ratings points and massive scale. Traditional TV may be on the decline, but it’s a slow decline, and will still be viable for awareness campaigns. OTT can offer a much more focused experience to an audience of hand-raisers. If 300,000 viewers self-identify as golf fans, that’s an appealing audience size for a golf brand to pursue.
OTT can deliver better efficiency than TV, coupled with the advanced targeting capabilities of digital. To unlock that magical combination, it needs to be treated as a unique channel that delivers a better customer experience than both the existing TV and digital channels. Deep personalization can deliver that experience.
Dan Hurwitz is chief revenue officer at Penthera. This article has been published in collaboration with Adage.com