What Is Slowing OTT Ad Insertion?
Learn more about OTT ad insertion at Streaming Media's next event.
Read the complete transcript of this clip:
Scott Apgar: How come OTT ad insertion is moving kinda slowly? What we heard early on, I said 36 billion, nine billion. Why is that? Why isn't it ramping up more quickly? You get better CPMs with targeting. I'm willing to pay you more if I know I'm getting the right ad. As opposed to someone else. But, privacy information concerns are big. And it's not yet worked out to the extent that people are comfortable with it. So, getting those target groups is difficult. You have what's called walled gardens. Who are those? Anyone know that term? No?
Student: Probably Facebook.
Scott Apgar: Facebook, yep. Sometimes they call Facebook, Google, Amazon. People that have large amounts of data but aren't sharing it. They're keeping it for their benefit. You can't get it for that reason, and you can use your own data, but you better be very careful not to put my age out on the internet, or my phone number, or my email address, in some kind of target criteria in the clear. So you've got to encrypt it. Make it a GUID in on the other end, when the campaign manager gets this big long GUID, they have to know how to decrypt it, tune it into the fact that it's me. Oops, sorry. And give me the right ad. I mentioned earlier that the CDN helps propagation of creatives. That's true. However, now we're talking about all of the different content types, HLS, DASH, Smooth. You're talking about different devices. I left my phone over there, but from 4K Smart TVs all the way down to 3G mobile phones, you need the right profile for that ad. You can't download an HD ad on a 3G phone, without getting the spinning circle of death-- and nobody wants that.
So you're creating tens of profiles for each ad. That's requires mature content management systems. They're expensive and difficult to use. That's a barrier. So, existing equipment is, or was, expensive. And when you spent millions of dollars on your existing equipment, you wanna get some ROI back. So you're not giving it up anytime soon. You're gonna milk that, until you can't anymore. That's also a barrier to entry. And what you may have heard in some of the sessions here, this week, is that the new ad sales model, for OTT ad sales, it's confusing. There are so many options. People are very comfortable with that top line in the last slide, that linear broadcast. They know how to use the traffic and billing. They have teams that have been doing it for 25 years. It's just rolling. On the new ad sales model, it's not that smooth yet. It's difficult. Is it direct sales? Is it private? Is it open? Is it programmatic? So, all of that means that it's hard for people to adopt it, and there's kind of a fear of adoption. They're moving slow. They wanna see it smoothed out. There were lots of questions in a seminar yesterday about, what's the difference? How do I tell? What do I use? So until that all is better understood by both the ad agencies and the publisher side, it's not gonna be adopted as quickly. And of course, we know, again, cable cutting's driving the industry towards using this OTT model.
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