What's Driving OTT Ad Revenue Today
Where is ad spend growing the most as monetization becomes more of a focus for OTT, and how is the technology developing to support this? During a panel at Streaming Media West 2022, Jonathan Hurd, Partner, Altman Solon, asks Chris Drake, SVP, Revenue, Quickplay, “What's driving the interest in advertising today, whether it's in Subscription Video on Demand (SVODs), adding ad tiers, or the Free Ad-Supported Television (FAST) channels growing so dramatically. From your experience, what's driving that?”
“We traditionally play as a company supporting premium content services,” Drake says. “So advertising is an amazing opportunity to think about augmenting a lot of that.” He mentions the ways that other speakers on the Streaming Media West panel, such as Christina Chung, VP Business Operations, Estrella Media, and B.J. Elias, Executive Vice President, Fox Corporation, have discussed how different packages of content can be tailored, monetized, and targeted towards diverse audiences and their specific needs. “So someone that is really coming in for those big tent-pole events and is willing to pay for it might be different than someone that's coming in for clips and highlights that could be ad-supported,” he says.
Drake highlights sports as a unique space for the coexistence of various advertising revenue streams. “If you think about sports content, it's naturally pre-programmed perfectly for advertisements,” he says. “There are timeouts, injury breaks, half times. So even in a premium model, consumers are expecting advertising, and there's an opportunity that's been largely untapped of recapitalizing that for digital platforms.”
He mentions work that Quickplay has been doing with “a large sports broadcaster.” “We recently introduced this concept of basically doing dynamic ad replacements, broadcast TV ads, and then simply reinserting digital ads and using data to influence that kind of Dynamic Ad Insertion (DAI), but also looking at ad duration based on the variability of a 30 [or] 32-second time out versus an injury timeout, knowing which ads to preload and stitch, and then addressing a lot of the complexities of broadcast synchronization and real-time event markers and all the kind of funky standards around that. And doing that real-time and scale but adding an advertising component that was more DAI based for a premium advertising service for sports. We were able to increase their gross revenues by 20%. And this was a very well-established multimillion-subscriber premium service that all of a sudden overnight [got a] 20% lift without changing the consumer experience. In fact, you're probably adding to it because the advertisements you're bringing in [are] a little bit more targeted…it's a little bit more personal, it's more contextual to that particular experience. So I think there are some really interesting coexistence opportunities there.”
“So the combination of growth of the audience base and technology that's solving some of these problems that have existed?” Hurd says.
“It's all data, you know, back to data again, right?” Drake says.
Learn more about OTT ad-driven monetization at Streaming Media East 2023.
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