Over-the-Top Media: The Good and the Bad

Stop me if you’ve heard this before: OTT (Over-the-Top) media inventory is hot, hot, hot.

Television programming delivered through an internet connection instead of a traditional cable or broadcast provider, while certainly new to the growing digital media landscape over the last decade, is still picking up steam. Everyone, and I mean EVERYONE, is selling it. From TV to radio, newspapers to ad networks, there’s plenty of inventory to go around.

We explained why OTT has become such a hot commodity in a blog last year, but just as a refresher: 75 million U.S. households stream via an OTT service and the targeting capabilities for an audience of more than 94 million total viewers is almost invaluable.

Still, not all is perfect in the OTT world, and media buyers and planners should know the lay of the land before going all-in (quick hint, DON’T go all-in).

Here are the biggest issues facing the medium today:

1. Cost

Costs-per-thousand impressions (CPMs) are registering higher than almost every other available medium except direct mail. But that may not be a surprise since it’s such a valuable tool. But media experts shouldn’t bury the lead with a client when it comes to the price tag.

2. Audited delivery

Major vendor Premion had to issue millions in refunds in Q4 due to “system issues.” Because audiences were not delivered properly, that severely changed the way campaigns performed. The numbers can look great, but even the big guns haven’t gotten it down to a science just yet.

3. Frequency capping

Did you see commercials for Coca-Cola’s Orange Vanilla Coke at every turn during March Madness? Because of set limits, many users are forced to watch the same content over, and over, and over, and over again. It can get a little repetitive.

4. Representation

There still seems to be a bit of confusion as to who actually owns the inventory and who will ultimately see the spots. While there is a capability of audience targeting (age, sex, income), sometimes the actual delivery can be a bit more of a gray area.

5. Unclear statistics

Most stats referring to OTT consumption include the industry’s leading streaming service, Netflix, with its 62 million U.S. subscribers. The problem is that Netflix doesn’t offer advertising. Another leader, Amazon, offers streaming free with Prime membership. There are limited ad opportunities there as well. Hulu and others are either sold directly or part of a network and can come with high minimum spend levels. It’s virtually impossible to separate subscriber numbers from Netflix, Amazon Prime and Hulu subscribers from the overall count. Why include these numbers where users aren’t being served ads when it relates to total industry statistics?

6. Still just another player

Until OTT reaches the level of TV and traditional buys across America, it’s safe to say it’s better to add this service to your mix, rather than allow it to be your only buy. Don’t get caught going after the shiny new penny when the tried and true still works as well.

For more than two decades, I’ve worked in the media buying and planning industry — much of it with MGH. That experience has me excited about the possibilities that OTT offers, and it’s my belief that it will continue to grow and become more reliable.

Linear TV still dominates, but viewing habits are changing. If you haven’t already by now, it’s time to take notice.