Ad-Supported OTT Keeps Growing, And Advertisers Would Be Wise To Take Note

AppNexus, the ad-serving company that was AT&T’s first post-Time Warner purchase, released stats this week showing a 748% year-over-year “explosion” in connected TV ad sales.

That’s quite an explosion, and it's the reason the industry has been so attuned to developments in the OTT and CTV space, which promises to actually be where much of the future of television happens.

(For those of you who are not that familiar with TV industry jargon, “OTT,” or “over the top,” refers to television programming delivered over the open internet regardless of which device it is viewed on. “CTV,” or “connected TV,” is that portion of the OTT universe that is viewed on an actual television set, usually through a streaming device like Roku or via a smart TV. While most OTT programming, especially long-form programming, is watched on an actual TV set these days, most networks still have apps that run on mobile and desktop platforms.)

One of the more interesting developments in the space is the recent deal between TruOptik, an audience intelligence platform, and Beachfront Media, a supply-side platform for connected TV. TruOptik will be providing verification for the audience segmentation that Beachfront is providing its clients.

It’s of interest because Beachfront has been plowing these fields for a while now — it was one of the first companies to start selling ad space on OTT and connected TV, back when no one thought that either was more than a passing fad.

“It’s been amazing to see the changes in the way brands look at OTT and CTV now,” Beachfront’s President and Founder, Frank Sinton tells me. “There’s real scale now that audiences have discovered ad-supported OTT and CTV,  and so buying these segmented audiences finally makes sense.”

What the deal with TruOptik does is allow Beachfront to verify the demos it’s selling, so that advertisers can be assured that their ads are going to wind up in front of the right audiences.

“It’s one more step in the overall verification process,” says Sinton. “We’ve tackled fraud via our partnership with WhiteOps, now we’re tackling audience verification.”

TruOptik has a database of over 75 million households to draw on, says founder and CEO Andre Swanston. “But we’re not just using TruOptik data,” he notes. “We’re pulling in data from multiple sources—Comscore, Rentrak, IHS, Experian, just to name a few. It’s allowing advertisers to buy these CTV audiences with confidence.”

The Power Of The Long Tail

Both Swanston and Sinton remarked on how quickly the so-called “long-tail” of CTV has been growing.

“It’s not just the networks and the vMVPDs,” Swanston notes. “There are networks out there that aren’t household names yet that are bringing in the viewers. They may not have first run programming, but what they have originally ran on major TV networks and it’s all quality, well-produced programming”

“A lot of them have been working to pull together impressive sized libraries,” Sinton adds. “Thousands of titles, all for free, with smaller, more personalized ad loads than on traditional television.”

That. of course, is television’s Holy Grail: fewer, better targeted ads that consumers don’t mind watching and which brands will pay more money for.

Connected TV may well be the place to fulfill this promise, as the combination of better data, better verification, and business models designed for addressable ad buys provides the ideal conditions for the birth of a new type of ad-supported ecosystem.

The success of new ad-supported OTT networks like TubiTV and PlutoTV speaks to the power of TV’s original business model, where viewers got programming for free in return for watching commercials. Cable’s original benefit was better reception and more choices, something the internet, which further removes the barrier of time constraints from the equation, making all programming immediately accessible, can actually improve upon.

That’s the consumer take.

For advertisers, ad-supported OTT offers an equally compelling proposition: a high quality, brand-safe environment, the ability to run high profile, well produced commercials, along with the ability to target those commercials to the exact demos they’re looking for, no matter how broad or how narrow those demos might be.

“Most CTV is sold through private marketplaces,” Sinton notes. “So if you’ve got a sports channel, an advertiser can reach sports fans who are also in the market for an SUV. What that does is bridge the gap between digital video and linear TV, giving you the precise targeting abilities of digital with the high quality environment you can only get on TV.  Add in scale, and you’ve got an extremely compelling opportunity.”

One that brands would do well to take advantage of.

 Originally published at Forbes.com on July 26, 2018