SpotX releases report on the state of video advertising on OTTTuesday, February 6th, 2018
SpotX Releases Detailed Insights About Current State of Video Advertising on OTT
- Third-party data is strongest driver for the adoption of audience-based buying and selling of ads on OTT
NEW YORK and DENVER — SpotX, the leading video ad serving platform, today announced findings from its report titled, “TV is Total Video: Predicting OTT and the Future of Video Advertising.” Commissioned by SpotX and conducted by Kagan, a media research group within S&P Global Market Intelligence, the study found that 85 percent of leading pay TV providers, pure-play over-the-top (OTT) providers, content owners, and advertisers believe leveraging third-party data is a strong driver for the adoption of audience-based buying and selling of ads on OTT. This finding supports the growing trend of industry players seeking data-driven solutions for video advertising across all platforms.
The first-ever survey of MVPDs (multichannel video service providers), pure-play OTT providers, content owners, and advertisers about video advertising, measured how changing patterns in the consumption of video have resulted in significant shifts in video advertising strategies. Researchers surveyed 41 total respondents, consisting of 68 percent at the director level or above, of which 22 percent were either VP or C-level executives.
“As more viewers turn to OTT services for their video, advertisers need to follow viewers to the platforms they are using. OTT services provide both a challenge and an opportunity for advertisers and those who want to monetize their content via advertising,” said Michelle Abraham, senior analyst at S&P Global Market Intelligence.
Additional key highlights from the survey include:
- 80% of all respondents agreed that the changing viewing habits had resulted in the requirement (or ability) to deliver cross-platform audience reach, with 100% of advertisers saying that this was the biggest resulting strategy change for them.
- Over 60% of respondents say they value pay TV and OTT audiences differently. 69% of content owners value audiences differently, while only 44% of advertisers do.
- Advertisers unanimously agreed that third-party data was a strong driver for the adoption of audience-based buying and selling of ads. Content owners were almost as unanimous, with 94% saying that leveraging third-party data is the primary business driver for moving to audience-based buying and selling of ads.
- 69% of content owners concurred that they would be focusing more on contextual advertising as a result of changing viewing habits.
- 36% of respondents said that OTT offers higher audience valuations on total reach.
- Among our advertiser respondents, 44% expect to see an 11-20% increase in return on advertising spending (ROAS) by moving from traditional ad buying to audience-based buying and selling, while an additional 33% expected a 6-10% increase.
- Currently, only 11% of advertisers spend 21-40% of their advertising dollars on OTT platforms. Within 24 months, however, this percentage is expected to grow to 67%.
- For advertisers, 78% of respondents, ranked data security and measurement as the primary challenges in adopting audience-based buying of ads.
“The OTT ecosystem is continuing to evolve and it’s important for all of us in the industry to examine the current state of the market so we can better understand the needs and wants of publishers and advertisers alike,” said Mike Shehan, co-founder and CEO at SpotX. “The results from this survey prove that ad dollars are shifting beyond the scope of traditional television for a variety of different reasons but that we still face challenges, many of which SpotX is working to tackle head on.”
“OTT enables precise identification of viewing households, providing highly granular audience segmentation for targeted advertising,” says Ashwin Navin, co-founder and CEO of Samba TV, the world’s leading TV data and analytics company. “As the industry moves more towards audience-based buying, OTT will increase in importance as an efficient way to reach desired targets, and this report from SpotX sheds light on how the industry is thinking about OTT ad strategies.”