As OTT / CTV continues to grow in prominence and as TripleLift expands into this field, it's worth considering the effective, user-centric model of how video content will be funded.
Video content is proliferating through every channel of content consumption — from web to app to social to connected TV (CTV) and over-the-top (OTT) — and is expected to continue to grow for the foreseeable future. Meanwhile, consumers are leaving traditional linear TV in droves, while ad loads have continued to rise for linear TV. This has created a temporary but unsustainable equilibrium in the funding of linear TV video content. Ad load will hit its peak, and users will continue to move toward CTV and OTT models, where ads are decidedly less prevalent
Leaders in video monetization are actively moving away from intrusive monetization. For example, Netflix — perhaps the standard bearer for streaming — uses strategic paid placements. The head of ad sales for Fox, Joe Marchese, is actively trying to reduce ad load for linear TV but is also pushing for ad formats that can capture user attention without undermining the experience. The canonical Fox examples are the YouTube World Series ad and the double box ad format. Both allow content to continue playing but create effective opportunities to monetize while minimizing disruption.
Integrating monetization opportunities into the content itself is an idea with meaningful traction among thought leaders in the industry. Ralf Jacob, president of Verizon Digital Media Services, for example, is a supporter of surface detection technologies that enable virtual objects or other brand content to be integrated into the scene without requiring disruptive jumps to entirely separate ad content. Similarly, Brian Lesser, CEO of AT&T’s advertising and analytics business, supports significantly reducing ad loads, while working to test formats and concepts that create new advertising experiences.
With the leadership of many of the largest distribution and content technology companies firmly supporting reducing ad load and creating new and better experiences, one might ask why the standard of today — more and more pre- and mid-roll advertising — remains so firmly entrenched. First, it’s the most natural extension of the TV business and requires no new assets, very little additional technology and almost no thought. Simply take the format that worked here, and move it there. But industry luminaries, as discussed above, are not satisfied with this complacency. The real challenges are more nuanced and technical.
To create the improved monetization experiences discussed above, computer vision, neural networks and deep machine learning should all be employed. The stream of video content should be analyzed in an automated fashion. The technology needs to extract surfaces, objects, lighting, shadows and depth. Much of the technology to enable this is available in one form or another, but deploying it appropriately to video with increased automation requires expertise and resources.
Further, the content owner and the content distribution channels should be aligned. Changing the content itself may require alternative licenses between the owner and distribution channel. In the past few months and years, however, the industry has aligned such that vertical integration — ownership of the entire supply and distribution chain — is becoming possible.
Finally, to achieve real scale, advanced video monetization should be programmatic. The promise of OTT advertising has been that it is addressable. But with broken formats, the model may not succeed. To be programmatic, the technologies discussed above should be integrated into the content distribution channels. This means the technology needs to be compatible with video processing and delivery solutions. It should be integrated into real-time bidding buyers, and it should have the ability to leverage dynamic components and computer vision to create seamless immersive experiences.