Subscription video-on-demand services are booming, as a new generation of viewer decides the combination of at-your-service TV without commercial breaks is worth paying for.
That growth, coupled with networks’ reduction in linear ad times, seems to put advertisers in a tricky fix – if the size of the ad hole is diminishing, where do ad buyers go next to make impact?
That is a question IPG’s UM Worldwide has been grappling with.
“Seeing what Disney+ is doing, and how the inventory and choices can transition from an ad environment to an on-demand subscription model, we’ve built it into our overall approach,” says says Jon Stimmel, chief investment officer at the media agency , in this video interview with Beet.TV.
“We’re just trying to find the right players to work with. All the TV networks are coming to us with their OTT elements or apps.”
Analysis from nScreenMedia suggests US Netflix viewers, by substituting free viewing for SVOD, are missing 2bn ad views every day, totalling missing ad sales estimated at between $3bn and $6bn annually. That constitutes between 4% and 8% of the current market.
But, whilst the rise of SVOD may seem to offer a challenge, Stimmel also sees the opportunity in what is also the rise of ad-supported OTT.
“We’ve seen the declining audience and behavior within linear TV or MVPD distribution environment,” he adds. “OTT has opened up a whole new opportunity for an audience, particularly younger audiences.
“(It) is an incredibly exciting opportunity for us, that we have only just scratched the surface on. The measurement and scalability is actually becoming at a point where we think it’s actually going to be a foundational element of our overall video approach.”
Stimmel says UM Worldwide has spent the last eight months working with partners to understand what “reach cures” look like within an OTT environment, because he wants to build “proxies for the larger audiences”.
Those partners’ responses have been mixed, so UM Worldwide has taken to building outs its own audience information.