In the far reaches of the foreseeable future, the bulk of TV and digital video viewers will be people who have abandoned—or never even had—traditional pay TV subscriptions.
Cord cutting is up; cord-nevers are increasing. This shift in consumer behavior will continue to result in the movement of ad dollars, a trend accelerated by the likelihood that the majority of video advertising buyers themselves will be cord cutters or cord-nevers. All of this will happen in parallel with a significant shift in the way video will be delivered to the home: primarily via an IP connection.
With all this change, those of us who work in the rapidly evolving video industry have an immediate opportunity to help prepare the business for this inevitable future.
How can we build a marketplace today that will be valuable for the advertisers and decision-makers of the next generation? We must create scalable solutions, and we must do so by leading with content, not by device, distribution mechanism, transaction technology, or any specific touchpoint. Only through the unification of our media properties’ multiple consumer touchpoints will we create content-led solutions that marketers will be able to harness for the masses in the future.
Decentralized viewing
I’ll explain. Brands seek to be relevant: They want to be where consumers are naturally spending their time. This has led them to mass advertising channels like TV and to target their audiences in an endless number of online niches. But gradually, and over a few decades, the value proposition of TV has begun to fade. At first, cable’s explosion of channels splintered TV audiences. Then the Internet itself, even before online video, fractured TV’s audiences further. But today we’re at another level. OTT—digital’s closest cousin to traditional TV—further decentralizes video-viewing audiences, expanding the TV environment even further.
OTT is commonly defined as a section of the digital video marketplace made distinct by a device connection—by being “over the top” of the set-top box. The IAB says it is “a device that can connect to a TV (or functionality within the TV itself) to facilitate the delivery of Internet-based video content” and the video delivered through this mechanism.
Although the definition is finite, it’s an incredibly broad universe. One of the products launched last year by Time Inc., the OTT network PeopleTV, can be viewed on a television set through Roku, Google Play, Amazon FireTV, Xumo, AppleTV and Chromecast, and through its own app on a smart TV. This same OTT video content can also be viewed online through a browser, on YouTube and within Facebook. To advertisers, embracing the OTT environment can mean negotiating multiple different buys involving different consumer use cases, measurements and ad formats.
On top of this complexity, there’s more. This one OTT channel—and the network of touchpoints it actually represents—may be just one portion of an advertiser’s cross-platform purchase. At Time Inc., we’ve changed the way we sell PeopleTV, so no matter how a consumer is accessing the network—whether on OTT, desktop, mobile or through our new distribution partnership with Twitter—the offering is wrapped into a single, PeopleTV-led investment. This approach gives our advertising partners the opportunity to reach PeopleTV fans, regardless of their chosen device.
Consumers get choice
The many touchpoints of OTT resonate quite differently to consumers, however. For them, it’s a definitive win. It’s like being kids in a candy store where whatever they want to watch is available at every turn: their favorite PeopleTV show plus updates on their favorite movies, shows and celebrities always on, no matter the time or their location. So my philosophy is, let’s focus on this win and let it guide us into the future.
To grow, and to overcome the fragmentation and complexity, we need to think less about OTT as a device channel, as it is defined, and more as an on-demand content platform. That’s the way consumers see it: the shows I want first and foremost, not necessarily the platform on which it’s available. Content is what naturally aggregates audiences. So let’s, as an industry, follow this lead. Let’s sell and buy content first, platform second. The approach works by drawing media properties and consumer brands closer together and by delivering target audiences who seek out the programming across channels, irrespective of the devices they’re using in a given moment.
Insights at IAB
Next week, I’ll have the opportunity to discuss this idea on stage with Sarah Warner, managing partner and digital investment lead for programmatic and video at GroupM, at the upcoming IAB Video Symposium. I look forward to her candid feedback and insights. I also expect we’ll discuss other challenges that must be overcome to achieve scale, such as standards in measurement and advertising formats.
Ideas and conversations like these, shared in public or behind closed doors, are essential to the success of our industry. Sellers must listen to buyers’ needs and devise innovative, targeted solutions that will satisfy them. This is what will build the video advertising marketplace of the future, a market that can thrive as the hub of all sight, sound and motion advertising transactions for decades to come.
