How are we going to measure OTT ads?

One vertical to pay attention to in the next five years is OTT. With more and more players trying to grab consumers’ attention by offering prestigious shows with Hollywood stars and pedigreed showrunners, OTT is both glamorous and extremely competitive. And there’s lots of money at stake — Statista expects the US market alone to be worth nearly 48 billion USD by 2023.

Gijsbert Pols, from Adjust’s innovations team argues that advertising is going to play an essential role in two ways: OTT platforms will be eager to buy inventory to acquire new users and keep the existing ones engaged, while also selling inventory to brands to fund their original content.

The brave new world of OTT

For mobile app developers, the first development will provide them with an additional opportunity to monetize their applications via in-app advertising. And a very appealing one too: most consumers will tolerate ads for TV shows more than other forms of online advertising.

The second development will offer app developers an additional advertising channel for user acquisition and engagement. The OTT channel comes with a lot of potential. For one thing, as OTT content is consumed via multiple devices (connected television, mobile, desktop and even gaming consoles), it allows mobile app developers a far more holistic approach. They can create visually stunning and content-rich ads for the television screen and create catchy ads for mobile and desktop, jointly driving users to their mobile application.

OTT platforms will also allow app developers to use unheard of ad formats. US-based Hulu has already started testing ads that appear when users hit the pause button. Interactive video ads, such as provided by KERV interactive, are becoming more and more popular — we are pretty close to buying the clothes the protagonists in our favorite tv-shows wear directly. And with Roku allowing users to remotely control their televisions with a mobile app, the interactivity will go across different devices. Finally, China’s Tencent Video has been experimenting with augmenting video content with advertisements — soon, billboards and coffee mugs appearing in TV-shows can be fully branded, following the context and preferences of people watching.

Speaking of programmatic: OTT platforms are also building up vast knowledge about the preferences of their users, which can be used for very effective targeting. Privacy is obviously an issue here, but OTT platforms are in a pretty good position to generate consent. They have an intimate relationship with their users and provide a secure login environment, which allows users to be in full charge of their data.

Measuring impact

But how are we going to measure the impact of advertising on OTT? There is a significant challenge here. Because OTT content is consumed across all devices, the ad that will have a decisive impact and get people to install a mobile application or re-engage with it may well be displayed on a non-mobile device: a connected television, a desktop device or even a gaming console. This means that ad measurement will necessarily have to go cross-device.

Now, there are existing solutions that could enable such cross-device measurement. Impact of television ads has traditionally been measured probabilistically, which basically means an examination of how likely it is that an ad got consumers to engage with the product or service displayed. This type of measurement can be very sophisticated, but it is questionable whether it will work in an OTT context. On linear television, ads were broadcasted for all users at the same time. With OTT, this is no longer the case. This issue can be dealt with by a smart use of data, but that involves a lot of work.

On top of that, probabilistic measurement can only establish impact for predefined groups, not for individuals. The latter does not fit well with the way most of the ad inventory is currently being sold. Moreover, the problem with probabilistic measurement is that it does not facilitate holistic campaigning. If you have ads running on connected TV, mobile and desktop, you need to be able to map out the customer journey comprehensively, across all the different devices. In other words, measurement needs to be deterministic and knit together all the touchpoints involved.

The problem of OTT measurement comes at a challenging time. Third-party cookies are becoming a thing of the past, authorities are enforcing privacy regulations and big publishers are applying walled-garden strategies, which obstructs deterministic measurement as it has been done in the last two decades. Even more importantly, consumers are wary of their personal data being exploited for commercial aims. This means that for measurement of OTT advertising, there is no magic solution involving a unified ID or so-called identity graphs.

Common sense

The good news is that there is a common interest of all the parties involved. Mobile app developers, OTT platforms and measurement partners will all benefit from effective cross-device measurement. This common interest will enable creative cooperation, a joint effort that brings together all the different pieces needed to get the full picture that is required — without uncontrolled data flows.

Together, we can also create a narrative to convince consumers and provide a better ad experience. Cross-device measurement of OTT advertising can bring about relevant and high-quality advertising, it can annul the risk of overexposure and it allows for fantastic interactive ads to be created.

All in all, the key to effective measurement will come from creating partnerships and building consent as much as it will come from technical innovation. But the clear benefits of working together means that it is the natural evolution of the OTT measurement space.