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Free Premium OTT Exploding, Better CTV Ad Experiences Next

It’s no secret that streaming TV is booming right now. From recent news that Vizio’s SmartCast viewership sessions were up over 50% amid quarantines, to services like HBO opting to release a ton of free video content, the already active space continues to heat up as consumers search for premium video content. As everyone gets in on the streaming boom, it becomes crucial for services to differentiate themselves.

Obviously, content is a big part of that, and unique value propositions remain key to attracting and growing subscriber base. HBO’s own strategy here entices homebound viewers with previously gated content exclusive to its platform. The value is in the quality, but also the exclusivity of the shows like Veep, Silicon Valley and more.

But user experience also looms large for streaming services -- especially when it comes to the ad-supported platforms. Audiences are happy to watch ads to drive down their cost with regard to premium video. Still, content owners need to make sure ads avoid being disruptive and repetitive, though.

Ad pods, or “pods” for short, are the core of the user experience when it comes to advertising on CTV. These pods are often sold to direct advertisers. However, as programmatic gains its share of CTV advertising, we need to reevaluate how constructing Ad Pods is done.

Ad pods and its relatives -- deduplication, competitive separation, and frequency capping -- are not completely new concepts, but they are ones that are poised to play a critical role in dictating the winners of the ongoing “streaming wars” and CTV advertising in general. Today, binge-watchers see many of the same brands and ads over and over in a given viewing session. So despite them being willing to watch commercials, they’re also not willing to be inundated by the same message over and over again.

Here are four simple ways to consider how ad podding will shape the streaming wars as it relates to connected device premium video advertising.

Consumer Approval Or Bust

Consumers are getting used to more experiences where there are no ads (Netflix, Disney+, Hulu’s premium subscription, etc.), and that has affected how ads are delivered elsewhere. We’ve seen adjustments from linear and streaming content providers alike when it comes to decreasing ad loads (NBC is actively aiming to avoid this with Peacock’s five minutes of ad time per hour), and we’ll likely see more. If consumers see ads, they need to be delivered better.

This is where ad pod construction and its relation to user experience (UX for short) come into play and become critical to overall user satisfaction. Consumers don’t want to see repetitive ads. Consumers don’t want to see irrelevant ads. And consumers don’t want to see ads that are not timely and contextual. It is all about the right message, at the right time, to the right audience. Consumers won’t put up with anything less, or risk losing them.

Legacy Ad Tech and Ad Pods Today

Today, CTV advertising has a user experience problem, and much of this is due to the legacy technology solutions that were originally made for an online environment that are now being morphed into CTV platforms. The core problem is that the user experience of the web -- where cookies are prevalent and the experience is often one pre-roll ad per one video -- doesn’t work for CTV.

For example, today’s CTV auctions are most often being done on a slot-by-slot basis, with each auction being performed independently. This creates latency issues as well as deduplication issues to start, leading to confusion on the buy side. Furthermore, buyers will be bidding and winning on the same user within the same pod, reducing win rates and increasing costs.

All-in-all, we need to re-architect the way we do CTV advertising.

The new CTV Ad Experience

Deployed effectively, podding includes deduplication that prevents delivery of the same ad creative multiple times in a single pod or program, while also enforcing competitive separation in order to avoid direct competitors advertising against one another in the same pod or program. Not only does this help avoid creative wear for audiences, but it also increases the value of creative placement for a brand.

Beyond that, there are ways to contextually evolve pods to be much more useful to the audience and effective for the advertisers. This makes advertising on CTV that much more attractive, as linear TV doesn’t provide a feedback loop that can be acted up, in real time.

Proprietary, Siloed Solutions Will Fail

The industry currently understands this, but (seemingly) only in silos. SSPs are building proprietary solutions that have drawbacks to adoption on a universal scale. They see the needs driving demand for ad podding and frequency capping, of course. But without the ability for these solutions to be implemented across SSPs, devices and audiences, they’re too resource-intensive to see significant growth. No one wants to customize technology for five or more different SSPs, after all.

Before this becomes a reality, the jockeying for position appears likely to continue. Steps like reducing ad loads are a start, and do enhance consumer experience. However, it’s ad podding that will ultimately dictate the value of ads -- and thus, the value advertisers apply to investing in enhancing streaming video experiences.

Chris Maccaro is the CEO atBeachfront, an independent video ad management platform for MVPDs, media owners, publishers and advertisers to transact at the convergence of digital and TV.