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Tag: OTT

  • OTT is the Next Step in the Digital Revolution for Media Buyers

    OTT is the Next Step in the Digital Revolution for Media Buyers

    OTT is increasingly being tested by advertisers as more inventory becomes available, says Nicole Whitesel, SVP of Enterprise Strategy at Publicis Media. “In the past, OTT was seen as a nascent channel with limited reach,” said Whitesel. “I think now you’re seeing a lot more inventory there available to them to buy. I think their willingness to test things where they’re unsure of outcomes has been increased more than ever before.”

    Nicole Whitesel, SVP of Enterprise Strategy at Publicis Media recently discussed the increased experimentation with OTT by agencies and their clients in an interview with BeetTV:

    OTT is the Next Step in the Digital Revolution for Ad Buyers

    One of the things we’re seeing is clients appetites being larger than ever before to explore. In the past, OTT was seen as a nascent channel with limited reach. I think now you’re seeing a lot more inventory there available to them to buy. I think their willingness to test things where they’re unsure of outcomes has been increased more than ever before.

    We’re really talking about kind of the next step, the digital revolution maybe seven years ago and people were early movers in that space and they had an advantage.

    We’re thinking about the space in a similar way. There’s an opportunity to get in early and test things, build operational muscle between teams that maybe haven’t worked together as closely before. We really see that as an opportunity this year to do a lot of that work.

    Agency Teams Working Together to Buy OTT Inventory

    You have teams where historically broadcast teams and national teams have bought broadcast. Then you have teams that are more precision or audience driven that buy programmatic. You’re seeing a lot of work between those teams now to think about the way we’re buying connected TV, inventory if you will, or OTT.

    You have a broadcast team that might be negotiating as part of an upfront and then you have an activation team who’s actually activating within a quarter against a specific audience, buying that inventory in-quarter.

    Those are teams that historically don’t work as closely together on an ongoing basis outside of upfront. We’re seeing that that’s an opportunity to bring those teams closer together and working more closely with clients who learn these new channels and understand that. That goes as well to analytics and measurement. How are we measuring them? What’s the contribution when compared to historically traditional channels like linear TV?

    Opportunity for Direct to Consumer Companies

    I think there’s an opportunity for direct to consumer companies (DTC) to enter the space through these new channels that didn’t exist before from a linear broadcast perspective. A lot of inventory was sold in the upfront and there was limited inventory available on an ongoing basis. That’s changing with these new channels in inventory that’s available through connected TV or FEP inventory.

    They have an opportunity to buy that in a way that benefits their business model and works with the way that their business has set up to run with retail quarters, seasonality, the things that make sense for them. They don’t have to make a commitment a year in advance. They can do it when it makes sense for their business.

    Getting Smarter With Broadcast Partners

    I think there’s an opportunity for us to get smarter about the way we partner with our broadcast partners. Historically we’ve gone in and we say we want this CPM and this flexibility and this is the programming or dayparts we want to buy.

    I think there’s an opportunity for us to say, hey, we want to buy this from an upfront perspective, but here’s all the other inventory that you manage that we also want to think about buying. We can collectively leverage dollars and get things that are valuable for our brands and our clients that allows them the flexibility to test these new channels.

    TV Attribution – A Big Next Step for Ad Buyers

    I think TV attribution is one of the big next steps for our industry. Being able to understand a contribution of a specific channel and its cost and associated with an outcome the brand’s care about is I think the next big opportunity for us. Then we’ll understand investment in media mix across those different video channels.

    OTT is the Next Step in the Digital Revolution for Ad Buyers


  • The Over-the-Top Marketing Juggernauts Have Arrived

    The Over-the-Top Marketing Juggernauts Have Arrived

    “Netflix versus Disney is the right comp,” says Laura Martin of Needham. “Netflix just raised price and Disney is now saying they are going to do a $12.99 bundle for Hulu, ESPN Plus, and Disney Plus, That feels like bundling is a smart idea and free services feel like a better value. I think what we are going to get for the first time in over-the-top is the marketing juggernauts have arrived. Guys who market things for a living. This is what Disney does better than any company in the media space.”

    Laura Martin, Managing Directory of investment banking firm Needham & Company, discusses how the game is changing for over-the-top (OTT) with the arrival of Disney Plus, in an interview on CNBC:

    I would call Roku the winning aggregator of all over the top platforms. They’re now in 30 million homes out of 120 million US homes. This means you can’t watch Apple Plus, Disney Plus, Warner Brothers Plus, and Disney Plus without going to Roku because they are reaching 30 percent of connected households. That gives them pricing power against those juggernauts. 

    Netflix versus Disney is the right comp. Netflix just raised price and Disney is now saying they are going to do a $12.99 bundle for Hulu, ESPN Plus, and Disney Plus. You are getting three services for $13. Really, four streams from Netflix is now $14 after the recent price increase. That feels like bundling is a smart idea and free services feel like a better value. I think what we are going to get for the first time in over-the-top is marketing juggernauts have arrived. Guys who market things for a living. This is what Disney does better than any company in the media space. 

    Disney+ Takes Netflix Growth Negative In a Significant Way

    I think it takes Netflix growth negative in a significant way in the US. Bob Iger has said he wants 90 percent awareness of Disney Plus by the time they launch on November 12th. To do that, that means they are putting it in every single theme park, they are buying billboards, they’re going on ABC which they own, they are going on ESPN which they own. They are going on everything. He said it was the most important media launch initiative since he’s been there. Bob Iger got there in 2005.

    The Roku channel is all ad-driven, meaning free. It looks like NBC is going to launch ad-free. CBS has news that is ad-driven. So I think we are going to get 50 percent of viewing with no subscription fee that is ad-driven. I think it is going to be cluttered. In my opinion, you won’t go from three average SVOD subscriptions to five.

    OTT Marketing Juggernauts Have Arrived, Says Needham’s Laura Martin
  • Does Netflix Have Enough Stuff To Keep Us Coming Back?

    Does Netflix Have Enough Stuff To Keep Us Coming Back?

    “Does Netflix have enough stuff that’s good enough to keep us coming back?” asks Michael Pachter of Wedbush. “That’s the real acid test. I actually think all these metrics they’re giving us on the crap shows are telling you that people are willing to watch whatever they throw at them because they’re running out of really great stuff to watch. So you get 40 million people watching Adam Sandler, which shocks me, but it happened.”

    Michael Pachter, an analyst at Wedbush, discusses Netflix earnings, which reported a huge drop in US subscribers, and if Netflix can survive against Disney and other content streaming companies in interviews on CNBC and Bloomberg:

    Does Netflix Have Enough Stuff To Keep Us Coming Back?

    I think this is a blip. Netflix subscriber growth is going to be like the movie box-office and when there’s lots of great stuff they’re going to see an increase in subs. The numbers on Stranger Things are pretty impressive. It is a really good show. They have a handful of really great content. They’ll probably hit their 7 million subs number. I think the real problem is next year when there’s competition. We saw a preview of next year with this quarter. So I think next year you’ll probably have a couple of quarters where they actually lose subs.

    By my count, Netflix produces about ten times as many shows as HBO and they get about the same number of Emmy nominations. So throwing 10x at the wall they’re going to have their hits. I actually think subscriber growth is going to be based on one of two things, either water cooler chatter kind of shows like Breaking Bad, Ozark, and Stranger Things, that we talked about when they were on and we told people they have to see, or good enough content, which is a high quantity of okay content. 

    Do they have enough stuff that’s good enough to keep us coming back? That’s the real acid test. I actually think all these metrics they’re giving us on the crap shows are telling you that people are willing to watch whatever they throw at them because they’re running out of really great stuff to watch. So you get 40 million people watching Adam Sandler, which shocks me, but it happened.

    Price Increases Drove Subscriber Losses

    Price increases probably drove the subscriber loss domestically. I think that they’re probably bumping up against the ceiling on what they can charge and continue to grow. I personally believe that they’ll keep 80 percent of their domestic subscribers at as high as a $20 monthly charge. Their last 10 million subscribers are probably middle-income households and they notice when prices go up a couple of bucks, which they did in January. You’re going to see continued defections as content migrates away from the site and as competition starts to materialize. 

    There’s Disney Plus in the fall, Warner and Comcast next year, and more content leaving at the end of this year and the end of next year. Middle-income households are probably going to have to think about whether they subscribe to one or two or three plans. Yes, they can cut the cord and maybe afford all of them, but the fact is that Netflix did see a decline of domestic subs. That’s what fuels international expansion and they’re about to lower prices in India. So I just don’t see how they’re really worth the $450 price target most of my competitors have on the stock. Today’s correction makes a lot of sense.

    Does Netflix Have Enough Stuff To Keep Us Coming Back? asks Michael Pachter of Wedbush

    Netflix Is an Overvalued Company

    That’s the reason we have cable TV. It was just the easy way to get 200 channels and we’re going backward. Actually, the right solution which is not going to happen is that Hulu is going to be the aggregator. You had three of the four networks that owned Hulu. If they had pooled content I think that actually was the winning formula. Disney has pretty much consolidated ownership of Hulu. I think that ESPN Plus and Disney Plus layered on top of Hulu might actually get us back to that old cable model. We’re going to go over the top (OTT) but you’re going to have a content aggregator and I think it’s going to be Disney. That’s Bob Iger’s vision. and I frankly think you’ll get HBO Max layered on top of that as well.

    Netflix has a place. They’re not going out of business. I have a price target that implies an enterprise value of $90 billion which is bigger than Warner Brothers was sold for. So I don’t think this is a worthless company. I think it’s an overvalued company. If consumers are going to try to replicate what they have with cable now at a lower price, sure cut the cord, no more CNBC, too bad, and maybe you can get Hulu, Disney Plus, HBO Max, the Comcast service, Netflix, and Amazon for less money. That’s what Netflix is banking on. 

    At the End Of the Day, Disney Is Going To Win

    Investors are foolish to think that anybody’s going to win except the content creators. The point is we’re watching this show (CNBC) because of you, not because of the platform. We want to see you. You’re the insightful person on this platform. You’re the content and you should command a premium for the content that you provide. Disney’s going to win. I really think at the end of the day Disney has the content. They win. 

    Stranger Things isn’t going to cut it. It’s one good show out of hundreds and hundreds and hundreds. You can’t name a Netflix original that they own that you actually watch other than Stranger Things. They don’t own Ozark. They don’t own House of Cards. They don’t own Orange Is the New Black. They own stuff like Flaked which you don’t watch or The Ranch which you don’t watch.

    At the End Of the Day, Disney Is Going To Win and Netflix is Overvalued, says Michael Pachter of Wedbush


  • The Secret to Subscription Business Models is to Think About Your Customers, Says Zuora CEO

    The Secret to Subscription Business Models is to Think About Your Customers, Says Zuora CEO

    “The secret of these business models or products is not just going beyond on products. Think about your customers,” says Zuora CEO Tien Tzuo. Zuora helps companies implement subscription business models into their existing products and services using their cloud-based software. They help their customers which include OTT (Over the Top) content providers, tech companies, and even traditional consumer brands like Fender Guitars enter the subscription economy.

    Tien Tzuo, Founder and CEO of Zuora, discusses how even the most traditional of companies can successfully implement a subscription business model in an interview on Fox Business:

    This is the Early Days of OTT

    It seems to easy as an end user. You just pick up your phone, fire up your browser, and you start using these (subscription) services. A lot of things have to happen behind the scenes. You have to check your credit card, remember to send out the monthly bill, figure out how much revenue you should recognize, or allow your customers to upgrade to a family plan or a better bundle. We take on all that so that companies can focus on what they do best which is providing a great service and a great experience for their customers.

    I think people are missing the big picture which that OTT really today only represents 5% of the $500 billion spent on TV. This is really the very early days and there is probably room for many vendors to thrive. If you think about the cell phone market there’s AT&T, Verizon, T-Mobile, and Sprint. It’s true that they use pricing packaging to compete with each other but they also have differentiated products in the marketplace.

    Think About Your Customers

    The secret of these business models or products is not just going beyond (and reinventing) products. Think about your customers. The great story about Fender (Guitars) is that Fender realized their customers obviously wanted to be musicians, but it was hard. Over 90% of their customers actually stopped playing the guitar after 90 days. So they asked, “How do we help our customers over the hump?”

    How to Play Guitar, by Fender

    If they are playing them well they are going to play for life and they’re going to buy a lot more guitars, a lot more amps, a lot more picks. They launched Fender Play to really teach their customers for a simple $20 a month how to play the guitar. They are seeing enormous success in the customers that actually sign up for Fender Play in sticking with it. So stick with the guitar and you can become really good. It’s never too late.

    The Secret to Subscription Business Models is to Think About Your Customers – Zuora CEO


  • Hulu Private Marketplace Gives Programmatic Advertisers Choice and Control

    Hulu Private Marketplace Gives Programmatic Advertisers Choice and Control

    “The invite-only auction, which is I would say our new shiny toy that’s getting wrapped in the PMP, provides us the opportunity for a variable floor price,” says Doug Fleming, Head of AdvancedTV at Hulu. “So now the advertiser pays what they deem appropriate for that specific audience. It gives them more choice and control. When we look at our offering that’s what it’s about. It’s the genesis behind us rolling out a programmatic offering. Advertisers want choice and control and we want to allow them to have that.”

    Doug Fleming, Head of AdvancedTV at Hulu, discussed Hulu’s embrace of programmatic advertising via their new private marketplace in an interview with BeetTV:

    March Towards Automation

    Since the inception of programmatic advertising, the goal always was that it was on equal footing with direct sold. We didn’t separate it. This wasn’t a remnant solution. As we’ve grown to 25 million subscribers we now have enough inventory and enough access that we have decided to create a team under me to go out and affect those agency trading desks and those folks that have decided to bring programmatic buying in-house.

    When we look at the landscape you can see this march towards automation and we’re not going to get in the way of that. We’re going to embrace that and we’re going to do it  in a very private curtailed way. There is no concept of a remnant provider reselling our inventory. Everyone has to be blessed and driven through the Hulu process.

    Hulu Works with Telaria But Owns the Delivery Logic

    On the demand side, it’s a mix of everyone. There is client direct, there are agency trading desks, and then the DSPs are good partners too. In each of those scenarios, we need and identify the brands before they come in so that they are attributed to the appropriate seller on our side. There’s no semblance of a DSP just hanging on and reselling in an always-on situation. We actually curate that environment and make sure that all of our t’s are crossed and i’s are dotted so that we know who the advertiser is coming in and we can manage that.

    What’s unique about our work with Telaria is really that the Hulu ad server owns the delivery logic. So in this case what separated Telaria was that they enabled us to do things the way we wanted to do them. They kind of powered us. We have very smart people in place who oversee these positions and they came in and worked with us to develop the appropriate technology for us to go to market the way we wanted to go to market.

    Hulu Private Marketplace Gives Advertisers Choice and Control

    What it’s given us is the ability to take all advertising in. We can category block appropriately, so people maintain their category exclusivity within pods. We have the ability to take multiple advertisers and a single deal ID and manage all that blocking. It also allows us to open up to the programmatic marketplace a full suite of products. We’ve always run a private marketplace. However, in the past, we had automated guaranteed and unreserved fixed. Those are fixed price deal types. Unreserved gave you the ability to make a data-driven decision and if you chose to take that impression you paid the fixed price that we agreed on.

    The invite-only auction, which is I would say our new shiny toy that’s getting wrapped in the PMP, provides us the opportunity for a variable floor price. So now the advertiser pays what they deem appropriate for that specific audience. It gives them more choice and control. When we look at our offering that’s what it’s about. It’s the genesis behind us rolling out a programmatic offering. Advertisers want choice and control and we want to allow them to have that.


  • AT&T Launches Xandr, Enabling Individualized Targeted Television Ad Sales

    AT&T Launches Xandr, Enabling Individualized Targeted Television Ad Sales

    AT&T launched a new advertising company called Xandr last week led by CEO Brian Lesser. “Xandr is a name that draws inspiration from AT&T’s rich history, including its founder Alexander Graham Bell, while imagining how to innovate and solve new challenges for the future of advertising,” said Lesser.

    “Our purpose is to Make Advertising Matter and to connect people with the brands and content they care about. Throughout AT&T’s 142-year history, it has innovated with data and technology, making its customers’ lives better. Xandr will bring that spirit of innovation to the advertising industry.”

    Brian Lesser, CEO of Xandr, discussed the new company this afternoon:

    Advanced Television to Power Direct Advertisements on a Household Level

    Xandr includes our existing advertising business which is about a $2 billion dollar television ad sales business, television and digital. We had an internal data project to pull all the data together across all of AT&T, and over the summer we completed an acquisition of AppNexus so that’s all now rolled up into Zander.

    The fastest growing part of our business is what we call advanced television. We sell quite a bit of television advertising but the most popular products we sell are television advertising powered by data using technology to direct advertisements on a household level. What that means is you and your neighbor could be watching the exact same program and getting different ads within the same content based on the behaviors of your household.

    Individuals Have a Control Over Their Data

    Some data we won’t use because of our privacy policy. When it comes to who you call that’s not information that’s relevant to how we’re going to serve you ads, but for example, if you’re on a browser on your phone and you are browsing content or you’re using DIRECTV NOW on your phone we can then use that information to direct ads both on your phone and on your television.

    AT&T is a 140-year-old company and we have a lot of respect for our customers and therefore how we treat data is a big part of our advertising business and our advertising program and our policy is dependent on us having that relationship. This means customers should always understand how and when we’re using data. They should always have choices as to how we use it and they will have control of it.

    Most of the information we get has to do with how AT&T interacts with you such as an app like the AT&T app, DIRECTV, or other information that you give us as a customer. The policy is the data that we collect from our customers always stays within our systems and we don’t sell data for advertising purposes. When we buy data to supplement that’s anonymized data and we never know who a person is.

    We have a profile in a database that says not you but an anonymous version of you likes to watch certain programs on television, you have certain apps installed on your phone and then we can buy data from brokers to augment our understanding and serve you relevant ads.

  • TV Ad Industry Takes On The Internet With Addressable Advertising

    TV Ad Industry Takes On The Internet With Addressable Advertising

    The traditional television industry is finally feeling the pressure of the data rich micro-tuned digital advertising world of the internet and is hitting back with addressable advertising. For years advertisers have become accustomed to extreme targeting with website advertising and particularly with search advertising. Over the last few years micro targeted video ads have become the norm as video is quickly becoming mainstream on social media platforms such as Facebook and Twitter. This is causing a shift in ad spending from television to the internet that the TV industry is working to stop, or at least join in on.

    The TV industry’s first step was to make viewing options available on all devices, often referred to as over-the-top (OTT) content viewing. This has been sped along by users, especially millennials and even younger teens watching more and more traditional television content on small internet connected devices. Additionally, smart TV’s are connected to the internet and more importantly are also being connected to smart cable boxes capable of serving the same kind of targeted ads that are served on the internet. This targeted advertising is called addressable advertising and it is the television industry’s competitive answer to the internet.

    From MediaPost’s Editor in ChiefJoe Mandese:

    “One of the things we’re thinking about is whether TV channels go away and become apps,” Brian Hughes, senior vice president-audience analysis and practice lead at Magna, told MediaDailyNews during a preview of the report.

    Hughes added that while the way consumers and industry practitioners think about television may be changing, its vitality as a medium remains as important as ever. It’s just becoming more complicated to track, understand and manage.

    “The message you keep hearing from the industry is that TV is dead, but I think we’re finding that it’s a lot more complex than that. It’s the fact that OTT usage has exploded. TV is not, in fact, dead. It’s just changing. But it remains a central experience for most consumers and a vital medium for most advertisers,” he explained.

    Asked what it’s changing into, Hughes said it’s part of the same meta theme that has been transforming much of the traditional media marketplace: a shift to an “on-demand world, where content is at your fingertips and you can get it where you are on the devices you are on.”

    With addressable advertising advertisers will be able to target diapers in a video commercial to a stay-at-home-dad watching ESPN on either his mobile device or even on his home TV, while others watching the same live or recorded show will see different commercials based on their own demographic, sociographic and behavioral data. No longer will all men be shown shaving and truck commercials.

    Big data is being collected and utilized by companies such as Google’s DoubleClick to make addressable advertising possible enabling the merging of traditional television viewing with the viewing of that same content on small devices to serve targeted adverting.

    “Advertisers and programmers who embrace the fundamental shift from a “big game” mentality to one of reaching viewers across many screens and devices will be rewarded with up-to-the-minute flexibility, deeper audience insights and much more dependable ROI data,” according to a recent report by the DoubleClick the Marketing Team and posted by Anish Kattukaran. “With much more granular attribution and measurement, advertisers can now understand the true performance of their ad–including engagement, brand lift, and conversions. Addressable advertising creates value for everyone in the advertising chain. This lets marketers reach and attribute highly specific targets, and helps broadcasters and distributors better value their content and monetize multiple audiences at the same time. It also give the viewers themselves a better experience, with ads that are more interesting and relevant to them.”

    Advertisers can still advertise to the masses, such as in the Super Bowl, but will also have the option of using granular data attribution to reach subsegments of the audience that are more likely to be interested in their offer. This is both a benefit and a challenge to the television industry because targeted advertising will bring higher CPM’s but with this new data advertisers will also be able to track conversions (sales) and know whether their ads are working or not. This is something traditional TV has not had to deal with and has been a huge frustration to the internet advertising industry because they have had to work with advertisers on this extreme tracking for years, while watch ad dollars go to TV which didn’t have to prove out their value. Addressable advertising is leveling the playing field.

    True conversion reporting for television and television content across all devices is the holy grail for advertisers because it lets them target ad dollars much more effectively.

    “Advertisers and programmers who embrace the fundamental shift from a “big game” mentality to one of reaching viewers across many screens and devices will be rewarded with up-to-the-minute flexibility, deeper audience insights and much more dependable ROI data,” says Kattukaran. “With much more granular attribution and measurement, advertisers can now understand the true performance of their ad–including engagement, brand lift, and conversions.”

  • Streaming Device Sales Hit 1.7 Billion in 2013

    Streaming Device Sales Hit 1.7 Billion in 2013

    As app infrastructures move into more and more products, consumers are beginning to expect apps such as Netflix and Amazon streaming on all of their devices. As these services improve U.S. consumers are also relying on them for more of their daily entertainment needs, cutting out traditional broadcasters in the process.

    Market research firm IHS this week released a report showing that more than 1.7 billion “over-the-top” (OTT) devices will have sold by the end of 2013. These OTT devices are defined as being able to access streaming content such as Netflix, including set-top boxes, DVD/Blu-ray players, smart TVs, video game consoles, and streaming boxes such as Apple TV and Roku.

    These sales represent a 20% increase over the estimated 1.43 billion OTT devices that were shipped in 2012. IHS estimates that there is now one OTT device for every four people on Earth.

    “Content owners, operators and consumers all are driving the proliferation of the OTT model,” said Jordan Selburn, senior principal analyst for consumer platforms at IHS. “Content owners want to expand the market for the films, music and videos they own. Meanwhile, operators wish to use OTT in order to add value to their services and keep subscribers from canceling TV subscriptions in favor of purely broadband connections – preventing what the industry calls ‘cutting the cord.’ Consumers, for their part, desire access to a wide variety of media at the time and place of their own choosing.”

    Though more consumers are accessing OTT content from their living room TVs, the IHS report shows that most consumers are still accessing streaming services through PCs or smartphones. However, the tablet market and other devices are quickly becoming a greater portion of the streaming media industry. IHS predicts that 480 million of the OTT devices shipped this year were not smartphones or PCs, marking a huge 30% increase over shipments of such devices in 2012.