Last week, MediaRadar hosted a panel to explore the recent changes in OTT and what the future holds for this type of advertising.

The panel, moderated by Wendy Lee of the LA Times, included MediaRadar CEO Todd Krizelman, Bill Condon of Xumo, Justin Gutschmidt of Premion, and Matt Graham of Acorn TV.

The panelists dove into many aspects of OTT, discussing the benefits and how the industry has evolved this year.

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Why OTT is Beneficial for Brands

OTT advertising offers a number of advantages to brands looking to get more for their money. More views, more click‐throughs, or more sales—OTT provides opportunities to get a message in front of the right people at the right time.

Targeting

OTT channels provide audience data that allows advertisers to produce highly targeted campaigns. Advertisers can segment audiences based on geographic location, demographics, preferred content, and more. They can capture impression data and more for guiding future ad buys.

By narrowing down an ad’s audience to include only those to whom it’s applicable, brands can drive awareness. They also save money by not showing ads to obvious dead ends.

In turn, audiences appreciate not being shown ads that don’t apply to them.

Ad space innovation 

TV advertising has been the same for decades—but OTT platforms are offering new ways for advertisers to get their messages across.

For example, Hulu has a choose‐your‐own‐adventure‐type ad option. This allows viewers to select which of multiple ad options they’d like to watch, including which brand they’d like to see and which specific ad for that brand most applies to them.

Hulu also uses interstitial and binge ad options (viewers watch all their ads at once so they don’t have to be interrupted later).

“And after literally a lifetime of seeing [TV ads] identical in one way, at least for the time being it feels refreshing,” explained Krizelman.

This can help keep audiences engaged—most people are much less likely to get bored if there’s more of a change in what they’re watching. Hulu claims that the options provided by their platform lead to a 150% increase in brand recall.

Consolidation Marks the OTT Industry

As OTT content rises in popularity, the industry is beginning to consolidate. Xumo, for example, was acquired by Comcast.

“We got acquired by Comcast back at the end of February. So sort of right before the pandemic hit, we were doing well. But you know, being tied to a larger company has been really beneficial. I’d say there’s four key areas in terms of what has been helpful to Xumo,” Condon explained.

He lists distribution, discoverability, content, and data as the four primary benefits of the merger for Xumo. With Comcast’s help, Xumo is reaching a wider audience, is easier for potential audience members to find, has seen a 350% increase in the content acquisition budget, and has access to more data and data processing tools. 

Moving forward, other companies are likely to undergo similar merges and find similar benefits. 

Now that all of the major players have introduced their OTT platforms, the number of unique OTT providers will likely decrease. The average OTT consumer is willing to pay for about 3.2 platforms. Past this threshold, they’re willing to accept ad-supported OTT, which major leaders already offer (i.e. Peacock and HBO Max starting next year).

“We have a chart of what happens to our customers, and more than any single quarter in our ten years of doing this, there was more M&A out of those 2,400 [customers we track]  than ever before in the last 90 days,” said Krizelman.

This consolidation is a strong sign that the industry has reached its peak in regards to the number of platforms. As they band together for various benefits, we’ll have a chance to find out what else the platforms can offer.

An Exciting Future for OTT

With all the big name players already on the scene, the future will be interesting for OTT. It’s only a matter of time before we begin seeing even more of the potential and profitability play out as advertisers continue to capitalize on the benefits of OTT.

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