OTT – The World Is Watching
Over the top video (OTT) content continues to be in high demand in both mature and emerging markets around the world. Major OTT providers are investing heavily in international expansion, and revenue from ad supported OTT video outside of the U.S. is expected to grow significantly in the coming years. According to some analysts, ad supported OTT video could become a $15 billion global opportunity by 2021.
The market leaders are clearly focused on an international growth strategy with the stated goal of “spreading and evangelizing this vision of internet TV on a global scale.” As proof, Netflix and Hulu continue to license and develop content they hope will appeal across multiple countries and OTT providers generally agree that high-quality content has a global appeal and can travel across borders. But spending big on content and marketing to users in new regions only makes economic sense if OTT providers can easily and uniformly draw in brand advertisers from around the world.
While the U.S. gets most of the attention for OTT viewing trends, regions such as Latin America, Sub-Sahara Africa and APAC are all expected to see record growth in the coming years – some regions as much as 2,000%. In developing countries, the adoption of mobile broadband as opposed to fixed broadband could move the primary viewing of OTT content from connected TVs to mobile devices. This increased consumer demand in emerging markets and the proliferation of new devices could prove to be a challenge to those advertisers who are thinking about how to take advantage of this massive shift in the way the world watches TV.
Advertisers have long relied on TV to deliver their messages to captive consumer audiences. As consumers move away from standard cable bundled packages and continue to shift their use of over-the-top devices to deliver TV content and experiences, it would seem natural that advertisers would follow suit for delivering their messages - as connected TV combines the best of both digital video and linear television.
While there is currently no precise way to measure unique reach across devices, devices shared within households, or content that is started on one device and finished on another, there is a growing body of evidence that points to distinct characteristics between OTT and Today, digitally savvy marketers are focused on quantifying the entire customer journey and these marketers will demand a seamless way to track, measure, and understand their audiences and engagement across all devices and platforms inclusive of OTT.
For video publishers and advertisers, another potential challenge in scaling OTT is contending with international regulatory and privacy standards. Fragmented data protection regulation has had a meaningful impact on adoption of cloud computing globally and the same could easily happen with OTT. Just the cost of compliance with regulatory obligations tend to be higher in Europe than in places such as the US, presenting another important barrier to the expansion. Marketers will demand an easy and cost effective way of dealing with privacy standards in each of the new markets where they expand.
Related: Vivendi Brings Mobile Short-Form Video Service to U.S.
To help solve for this, Screen6 is working to address many of these issues and to help improve digital ad efficiency at a global level. By providing cross-device ID technology that is designed to adhere to local privacy regulations, Screen6 is able to power a solution that scales media buys globally without the need for new vendors in each market. Screen6 is also able to identify audiences on specific devices and de-duplicate audiences viewing across devices, which can help advertisers better understand the value of their marketing. By working together to address these core challenges, both Screen6 and Sizmek are working to provide buyers with a better sense of their audience, which will lead to greater investment.
To take advantage of OTT's benefits at a global scale, marketers will need to take a hard look at the challenges posed by expansion into new markets. Delivering ads through OTT can be an arduous, multi-step process and to make media buying successful at scale, the media supply chain will have to be integrated. By consolidating the process across single vendors, buyers and sellers can collaborate easily across silos, providing efficiency to OTT inventory.
David de Jong is CEO and founder of Screen6.
Broadcasting & Cable Newsletter
The smarter way to stay on top of broadcasting and cable industry. Sign up below
By Jens Koerner