Introducing FreeWheel Signature Insights: The Power of OTT
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Ying Wang
By Ying Wang,
Director, Advisory Services,
FreeWheel

From the thought leaders that bring you the quarterly Video Monetization Report (VMR), comes a new track of transformational research: FreeWheel Signature Insights, a new platform for exploring the most widely-debated, needle-moving issues driving the premium video economy.

The inaugural installment of this semi-annual study takes a closer look at the growing prominence of over-the-top (OTT) devices and what makes them so promising yet challenging for the industry to monetize at scale.

Here’s a preview of just a few of the takeaways from the report.

THE ACCELERATION OF OTT

As reported in the VMR: Q1 2017, OTT devices achieved a major milestone by surpassing desktop as the leading digital platform for premium video monetization in the U.S. This report provides a deep dive into how these devices are impacting The New TV Ecosystem, starting with a look at the ad view share of the three types of OTT devices.

UNTAPPED OPPORTUNITY

OTT viewing combines the power of digital advertising with the engaging, lean-back user experience of traditional television, creating one of the most compelling environments for viewers to watch video and marketers to get their message across. In particular, these big-screen devices deliver:

Desirable Audiences: OTT allows marketers to reach viewers who are harder to find on traditional TV, including affluent millennials and cord cutters. The median OTT viewer is 23 years younger than TV viewers and their median household income is nearly $10,000 more per year than that of traditional TV households.

Engaged Viewers: OTT viewers spend an hour or more per network when they watch premium video, and complete 98% of all video ads. And the content of choice for OTT viewers is highly immersive, premium live-streams and full episodes.

Brand Lift: OTT campaigns produce a greater lift in brand awareness and favorability than desktop and mobile, according to a recent Hulu study demonstrating that the engaged OTT viewing environment is more conducive to promoting brands than other digital channels.

KEY MISCONCEPTIONS

Despite bringing the best of digital video and linear television, OTT doesn’t neatly fit into either category. Our research identified three concerns from marketers and agencies, and suggests that misconceptions around the platform have resulted in OTT being under-valued:

Viewability and Fraud:
Because OTT is an IP-based platform, marketers have carried over their concerns from desktop around viewability and fraudulent traffic. However, OTT is inherently less vulnerable to both challenges due to high authentication rates, the devices’ closed environments, and the nature of the viewing experience.

Incremental Reach:
Advertisers should not be concerned that OTT audiences overlap with people they’re already reaching through linear buys. In reality, OTT brings incremental reach from cord-cutters/ shavers and helps marketers achieve greater frequency of exposure that they would miss out on due the decline in traditional TV viewership.

Audience Measurement:
While OTT is the best of linear and digital, it doesn’t fit neatly into the measurement tools used by either. There are many ways to measure and transact OTT if advertisers are willing to be flexible and innovate, and safe automated marketplaces open up new targeting and measurement opportunities for buyers.

No doubt there is still work to be done, but these complexities should not dissuade advertisers from taking advantage of this valuable inventory.

We’re extremely optimistic about the future of OTT and look forward to shedding light on what it will take to unearth its true potential. Download the full report now.

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