Back to Gartner for Marketers Blog

Respect OTT Reach But Demand ROI

By Benjamin Bloom | February 15, 2019 | 0 Comments

MarketingAdvertisingBranding and Value PropositionData and AnalyticsTechnology and Emerging Trends

Among the storylines about cord-cutters, ad-blockers, and time-shifters, new research from Gartner shows the significant and rising opportunity in in-stream video advertising delivery to internet-connected devices (see Over-the-Top TV Advertising Opportunities, Gartner subscription required).  For those of you under the age of 25, it wasn’t always this way.  

 

Digital Video Recorders started a trend that Over-the-Top (OTT) video services pick up nicely – making content consumption more efficient but also enabling new, 1:1 tracking of viewing behavior.  Combined with the allure of reaching the otherwise unreachable audiences (e.g. those not turning in to broadcast or cable television) more granular reporting constitutes a bright spot for advertisers using video and mass reach to drive their business.  

 

As digital video platforms like Hulu grew in scale from web to mobile to the TV set itself, new advertising formats set off the digital dilemma: how to acquire new users who dislike the ad experiences on broadcast TV, while capturing a sliver of the billions in TV ad spend (see Bryan Yeager’s excellent overview:  Cord-Cutting Creates a More Complicated Landscape for Ad Buyers) .  

 

Yet the promise of the ability to buy targeted online or OTT video inventory may be eclipsed by the wrong priorities.  If marketers simply rely on yet another place to buy impressions, instead of an opportunity to deliver value, that’s all the opportunity twill become.  This is the challenge for many CMOs; 14.2% of marketing budget in total is allocated to paid digital media, but marketing leaders struggle to drive ROI to the top of the list of marketing metrics. According to Gartner’s 2018-19 CMO Spend survey  12% of CMOs cite brand awareness as the  most important metric, compared with 7% for ROI and only 1% for lifetime value.

So what are we to make of advertisers that skip the big game but buy hundreds of millions of digital impressions? One automotive brand was reported to have purchased over 100 million views of its ad “blitz” – through OTT and online video distributors.

 

Additional PR may be good for a Guinness world record for online impressions or for sparking dialogue, but CMOs are expected to generate results.  It should not be surprising, then, that LiveRamp recently announced a productized approach for advertisers to link online and offline IDs to connected TV.

 

New OTT platforms are likely to include other providers and players- Amazon’s Twitch is already an important nexus of influencer marketing, sponsorship, brand integration and reach, while Epic’s Fortnite might even be a new concert venue.

But the sustainability of these tactics depends on outcomes.  Reach by itself does not generate awareness, and so marketers should integrate OTT media plans into holistic media mix modeling and attribution efforts.  Determine what ROI is needed and acceptable, from lift in awareness to influence on purchases and retention. Despite the inevitable gravity that pulls moonshots back to Earth, vendors are looking to go past the moon and shoot for  the measurement equivalent of Mars.  Marketers must make sure their TV strategies are smart, not just connected.  To dig deeper, Gartner clients can access How to Get the Most Out of Addressable TV Advertising by Eric Schmitt.

 

Leave a Comment