Top 5 OTT Audience-Acquisition Mistakes

Consumer adoption of (over-the-top) OTT TV and other streaming video services is accelerating worldwide. In the past year, the global OTT landscape has transformed from frontier settlement to boom town, with both traditional and new media companies seeking to stake their claims. Just last week, US penetration of Connected TV’s* – an increasingly popular way to access OTT content - crossed the 50% threshold, with no slowdown in sight. Whether an OTT service is subscription-based or ad supported, mainstream or niche, audience acquisition is the key to success.
* Connected TV’s include “smart TV’s” with built-in Internet access and traditional TV’s augmented with a Roku box, Chromecast, or other Internet-connected streaming device.

As ever more offerings rush in, it is increasingly important for OTT companies to deliver a compelling, differentiated message to consumers most likely to be interested in their platform. Many, however, are not taking full advantage of the opportunity to reach the right consumers with the right message. We thought the best way to improve OTT audience-acquisition efforts (if perhaps a bit harsh!) would be to share the Top 5 missteps we’ve observed OTT providers take in their audience-acquisition efforts.

1. Targeting based on web activity instead of media behavior. OTT companies, like most advertisers, typically rely on cookies to target digital ads. Cookies tell advertisers which websites a consumer has visited and how often. This information can then be used to infer whether a consumer is likely to be interested in a new network’s content, and in accessing content on an OTT platform.

A more effective and efficient approach for OTT providers is to construct target segments for audience acquisition based on actual digital media consumption. This eliminates the need to infer program or genre preference, and assures that prospects are already in the habit of accessing content through OTT platforms. Tru Optik clients use this approach to identify digital media consumers who have a proven interest in relevant content, and to target these consumers directly, at scale.

2. “One size fits all” creative. Content is a key selling point for any OTT package, and most OTT packages provide a range of content. So it’s no surprise that ads for OTT services often feature available channels and programming. A millennial-aged cord-cutter may very well want to subscribe to an OTT service or view ad-supported content on the network. But if you show a sports ad to someone who is mainly interested in comedy shows and movies, the likelihood of conversion is greatly reduced.

Modular campaigns that rotate content highlights based on the preferences of prospective customers are easy to produce and highly effective. Tru Optik clients can dynamically target campaign executions to prospects based on actual media consumption behavior. Does this really matter? Tru Optik has seen conversion rates jump by as much as 700% when the content highlighted in OTT ads aligns with the media-consumption behaviors of our audience segments.

The bottom line: OTT companies that take advantage of targeting technology based on media interest and behavior gain a powerful competitive edge when it comes to audience acquisition.

3. Over-reliance on display ads. Advertising a video-based product with display inherently sells the offering short. Display ads can lift brand awareness and are important parts of a comprehensive audience targeting strategy, but video and rich-media ads, while pricier, can showcase exclusive features and content more effectively with greater impact to convert more prospects into viewers and subscribers.

In a previous managed campaign for a North American OTT video service looking to add subscribers, Tru Optik tested the performance of display ads relative to video ads. Members of the same interest segments were targeted with banner and video creative for the same content. Those that saw just video were 72% more likely to convert than those that saw just banner. Those that saw both video and banner were over 3 times more likely to convert than those who saw just one type of creative.

4. Inaccuracy in household-level and cross-device attribution. Subscription to an OTT service is typically a household-level decision. However, because the vast majority of digital advertising is cookie-based, it targets individuals/individual devices, and cannot be reconciled at the household level. So while the Reach/Frequency numbers may come in on spec, a campaign can be highly inefficient for two reasons:

• Multiple individuals in the same household (and multiple devices belonging to the same individual) are treated as unique targetable entities. The result is a campaign that suffers from over-exposure at the household level, driving up costs, and potentially sacrificing reach (see diagram).

• Individuals in households that have already subscribed to an OTT service will continue to receive ads for that service.

To overcome this issue, Tru Optik powers OTT ad campaigns using IP-based targeting. In contrast to cookies, IP addresses are household-based. Furthermore, we leverage our cookie-less data-management platform (DMP) so that each device associated with a given IP can be anonymously identified. This enables a “best of both worlds” approach. Reach and frequency can be managed in a way that aligns with the “buying unit,” which for OTT services is the household. At the same time, delivery within a household can be managed such that only individuals with the highest potential interest in the service are exposed to the campaign, and exposure occurs in the right context, with the right creative, at the desired frequency.

5. Combining subscription fees and ads. This is pretty much a non-starter for cord cutters and shavers, who have shown disdain for fee-based services that force-feed advertising. The one exception to this rule is live sports and other hard-to-find live content. Though this is more about business model than audience-acquisition efforts per se, the double-whammy of fees plus ads is such a barrier to trial, we feel obliged to mention it.

The clear implication is that most OTT providers need to choose between a subscription model and an ad-supported model. The general rule is that platforms offering niche content are better off pursuing a subscription model, while services with broadly appealing programming ought to be able to attract a large enough user base to make an ad-supported approach more attractive.

Either way, audience acquisition is the key to OTT success, and that’s all about delivering a compelling message to prospective viewers precisely and at scale. Tru Optik is proud to be enabling many of the world’s leading OTT networks efforts to do just that.

About Tru Optik
Tru Optik is a trailblazer in data driven millennial audience and consumer monetization. Armed with the largest census level audience measurement of global OTT media consumption, Tru Optik uses interest and behavior segmentation to empower brands, media companies and agencies to deliver targeted advertising and experiences to millennials across all channels.

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