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A Step-by-Step Guide to Incrementality Testing for CTV Advertising
Sophisticated digital advertisers use incrementality testing. This allows advertisers to isolate unique contributions coming from their many digital marketing channels. As marketers move into CTV as the next growth channel, incrementally testing is especially important. CTV is unique in the digital advertising domain and because consumers cannot click on TVs. Incrementality testing is a foundational way for marketers to go “beyond last clicks attribution“. This of course is a requirement when there is no last click.
From defining your audience to calculating incrementality. We will show you how to apply this methodology to the fastest-growing video advertising channel in the world.
What Is Incrementality Testing?
Incrementality testing in advertising is an approach to measure ad performance measurement. It allows marketers to determine the exact level of contribution, or “lift”, that a channel’s advertising has on audience behavior. It requires using two groups: the test group and the control group. The test group is exposed to the advertisement. The control group is not.
If the exposed group performed better, then the test has shown a positive incremental lift. However, if the control group outperformed the exposed group, then the test shows there wasn’t incremental lift. And if there is no difference in the results, the test is deemed neutral. A difference between the results is only meaningful if the gap is statistically significant.
Incrementality testing is a type of A/B testing. Instead of comparing two advertisements, incrementality testing determines the value of advertising at all. In other words, incrementality testing is about understanding whether advertising on a given channel works. And exactly how much it works.
How to Run Incrementality Testing for CTV Advertising
Step 1: Create a Hypothesis and Establish Performance Metrics
It’s surprising how often advertisers can jump into a testing process before clearly establishing what they’re trying to test. Or how they’re going to assess success. With incrementality testing, you’re testing whether an advertisement works better than not advertising. This means you could test messaging and creative. But you could also test with placebo or dummy ads. These would measure the fundamental value of the channel.
On top of generating your hypothesis, you also want to agree on the performance metrics you’ll be using to evaluate that hypothesis. These are usually metrics like purchases, visits, average order value (AOV), conversion rate (CVR), and visit rate.
Step 2: Define Your Testing Audience
Next you need to build a testing audience derived from your overall target audience. This testing audience will contain the control and the exposed group. When defining this subset, you’ll want to account for any variables that could have an impact on the outcome of your test. For example, if you’re advertising a luxury product, it would likely be a good idea to hold income constant across the groups. Without accounting for these variables, the results could be erroneous. As would be any actions taken as a consequence.
For advertisers looking for precision audience control during testing, our CTV advertising and attribution platform provides numerous targeting parameters. These include age, gender, education, income, household and zip code. In addition, we can target by brand affinity, online purchases, offline purchases, viewing habits, device, business vertical, and fifteen thousand more segments. This level of granularity provides advertisers with complete control over their incrementality testing process.
Step 3: Determine Timeframe and Ad Content, and Run Your Test
The timeframe of the test depends on the volume of interactions, not any specific amount of time. It’s accepted best practice to run your experiment for a minimum of a week. Generally speaking, you should also consider running your test during a relatively normal time of the year. Holidays, elections, and any other major event could impact your audience’s state of mind. This could undermine the validity of your results.
Now, you need to develop ad creative based on the hypothesis you’ve set out to test. If you’re measuring the raw, incremental value of CTV advertising, you need to run placebo creative during your test. This creative needs to be irrelevant to your business. Whether it’s a placebo or a public service announcement (PSA) ad. By running this kind of test campaign, you’ll be able to get an accurate handle on the baseline value of CTV advertising.
With these done, it’s go time. Flight your ad to your test group while suppressing the control group’s exposure.
Step 4: Analyze Test Data and Calculate Incrementality
Once your test is finished, collect all the campaign data from your two groups and review them side by side. From visits to CVR, analyze all your performance metrics. And use them to calculate the incremental lift, as an overall percentage, that the test group saw versus the control group. Using this percentage, you can then calculate the incremental cost per acquisition (iCPA), conversion value, and return on ad spend (iROAS). With these figures in hand, you now have an exact read on the value CTV advertising brings to your business.
Finding a Platform that Supports Incrementality Testing
The impact of traditional TV ads has always been difficult for advertisers to pin down. With the arrival of CTV advertising, those days are behind us. Now, advertisers can measure the value of their ads with the kind of precision that had only been possible on digital channels. They no longer need to wonder if their TV ad campaigns are working. All they need to do is run incrementality testing on their CTV advertising platform to find out.
Advertisers looking for a CTV advertising platform that provides a comprehensive testing toolkit should consider AlphaDigital. We have the world’s first CTV advertising and attribution platform We provide a robust, built-in incrementality testing feature. This feature allows advertisers to run ad hoc tests to assess channel value. And will also run continually to adjust for the lack of ad exposure data via walled garden environments. The only platform on the market with this always-on feature. Our platform was designed to ensure advertisers are consistently getting value out of their CTV campaigns. A commitment we also back up with a fraud-free guarantee.
Reach out to the team to learn more, or get started with your first CTV incrementality test!
How CTV Measurement, Attribution, and Brand Lift Analysis Work in 2022
A one-to-one model of CTV measurement and attribution shows performance advertisers exactly where to spend their ad budgets.
As the popularity of connected TV continues to grow, CTV measurement is becoming increasingly important for advertisers. TV viewership data shows skyrocketing CTV adoption rates. In the US today, 56% of viewers watch video content through connected TV apps. By 2023, that number is expected to reach 82%. Here’s what advertisers need to know about CTV measurement, CTV attribution, and brand lift analysis in 2022.
What Is CTV Measurement and Attribution?
CTV measurement is the ability to track and analyze the success of performance TV advertising campaigns. CTV attribution is the ability to identify where consumers are coming from when they take an intended action. Whether that’s a specific channel or an individual ad campaign. Assessing effectiveness in CTV advertising usually means tracking metrics. Metrics like cost per completed view (CPCV), cost per acquisition (CPA), average order value (AOV), etc.
The untrackable nature of linear TV advertising means it isn’t a particularly useful channel for brands. With the exception of major corporations with huge budgets and the resources to sustain brand awareness investment. CTV, on the other hand, drives short-term sales with the added benefit of attribution. The ability to know where performance campaign success comes from for smaller brands is now possible.
Consumers might see an ad on linear TV that inspires them to buy. They might search for the brand or product name on Google. Then navigate to the company’s website from the search results. That website click will be attributed to the search engine instead of to the ad spot itself. But in the CTV realm we can track that initial click. The consumer who navigates their attention away from TV to visit the brand’s website on their mobile device, for example, will be attributed to the CTV ad.
How Does CTV Measurement Work?
The ability to measure and attribute CTV ad performance is incredibly powerful. But the process is distinct from other popular channels like digital advertising and linear TV. Here’s how CTV measurement and CTV attribution work, from start to finish:
- First, an ad is delivered to the CTV advertising platform being viewed in a specific household. The platform identifies and stores the household’s IP address in an exposure file.
- A device graph maps out any other devices that are connected to the same IP address within that household. The devices of multiple people in the household using mobile phones, laptops, etc, are also added to the exposure file.
- Someone in the household uses one of those connected devices to complete the action the ad intended. For example, visiting a website or making a purchase. Data about that event is recorded via a pixel and stored in an outcome file.
- We compare the data in exposure files and outcome files. This makes it possible to identify matching IP addresses. Those IP matches are attributed and recorded. Indicating that someone in that household completed the intended action specifically as a result of viewing the CTV ad.
In that sense, CTV measurement and attribution follow a one-to-one model. That’s an important tool for performance advertisers adding TV to their playbook. Especially in contrast to the way linear TV ads require complex panels, indexes, and samples in order to measure results.
What Does CTV Measurement Mean for Brand Lift Analysis?
Linear TV advertisers typically conduct brand lift studies. And consumer surveys in order to understand how each ad campaign resonates with their audience. That’s because on linear TV, like on most advertising channels, accurately tracking and analyzing brand lift is very difficult. Consumers are likely to interact with countless touchpoints before taking an intended action. The one-to-one nature of measurement and attribution on CTV solves that problem. Resulting in advertisers being able to attribute and analyze brand lift with a high degree of precision. No longer does a brand have to wonder why performance metrics are on the rise. By tying actions directly to ads allows advertisers to see exactly why consumers are showing interest.
Successful CTV measurement, attribution, and brand lift analysis allow advertisers to make better decisions. Knowing where and when to invest their ad budgets. That’s why advertisers work with an experienced partner like Alpha Digital. Our advanced CTV measurement and attribution tools give advertisers full control over their campaigns. Interested in partnering with the first CTV advertising platform to combine the power of television with the performance of digital marketing? Get in touch today to learn more.
4 OTT Statistics Digital Marketers Need to Know
Should OTT and CTV ads be a part of your digital marketing plan? Yes, if you’re looking for a transparent, cost-effective, and reliably attributable way to engage consumers. For marketers, these OTT statistics provide the context and proof points you need to effectively allocate your budget. Investors should also stay tuned to hear why this corner of adtech is booming.
Today, 57% of consumers get their television content through digital streaming. And only 26% use cable or linear TV. Connected TV (CTV) and over-the-top (OTT) platforms like Netflix have become the new normal. This groundbreaking shift sets the stage for TV to become a true performance marketing channel. Meanwhile investors are turning heads at the latest CTV statistics. Adoption and ad spend are surging.
OTT Statistics to Add to Your Watch List
OTT has seen steady growth in recent years. One simple reason is that consumers are tired of paying exorbitantly high amounts of money for cable. Data shows that the average cable package is priced at $217.42 per month. Subscribing to several OTT services is significantly cheaper.
The increase in overall OTT programming quality is another key factor that keeps viewers coming back for more. Netflix, Hulu, HBOMax, Amazon Prime, and other streaming services create compelling and original programming. Programming that is often exceeding what we saw in the heyday of cable television thanks to larger budgets. Smart TV manufacturer Vizio found that just one-third of television consumption is linear. Which is a massive shift from the 60% it was at two years ago. This can largely be attributed to the addition of new streaming providers that are churning out top-notch, award-winning content.
Additionally, OTTs completely redefined the way in which programming was released. Instead of waiting a week to watch the next episode of a show, many streaming services today release an entire season at once. This mode of releasing content creates massive increases in consumption.
However, simply knowing that more consumers are turning to streaming services for their video content isn’t enough to formulate an effective marketing strategy. Achieving the highest possible performance requires a more granular understanding of what viewers are doing. And when and why they are doing it.
Here are the key OTT and CTV statistics to keep in mind.
1. Daily Consumption
It all starts with the amount of time actually spent in front of the television watching video content. In 2018, the average American spent 44 minutes a day consuming OTT video. That number jumped to 62 minutes per day in 2020 when the pandemic hit. And it is projected to reach 70 minutes a day by 2022.
The improvement in technology in tandem with the pandemic certainly accelerated the way in which people consume media. But it also led to an increase in their treatment of CTV as a more interactive experience. One in which viewers have become more willing to make digital purchases. This means a greater potential return for digital marketers buying advertising space. And the opportunity to jump on things such as shoppable content.
2. Number of Users
Another key OTT viewership statistic to be aware of is the number of users streaming this type of content.
It is estimated that OTT subscriptions in the United States will jump from 230 million in 2021 to over 277 million in 2026 — an increase of 20% over those five years. It’s also worth knowing that OTT’s top adopters tend to be Millennials and Gen Z: 80% of those generations consume video on at least one platform monthly.
As OTT content continues to improve, it will open up channels for more viewers to become involved. Though the primary consumers of this type of content are currently young adults, CTV will continue to scale and tap into the younger markets as well as the older markets to create content and advertising that aligns with the specific wants and needs of these demographics.
3. Overall Revenue
Unsurprisingly, growth in OTT viewership statistics correlates to growth in OTT revenue. Research shows that OTT media revenue in the United States hit $106 billion in 2020, and is expected to double to $210 billion by 2026. This translates to the projection that revenue for OTT video will show an annual growth rate of 9.72% from now until 2026.
The largest segment of this revenue is OTT video advertising, which is slated to reach $87,261 million this year in the United States. This accounts for over 51% of the total revenue in the OTT market.
4. OTT Advertising Spend
In 2021, OTT advertising spend on connected TV reached $14.44 billion, a 59.9% increase over 2020’s spending. That number is projected to reach $27.47 billion by 2025.
The major shift from a focus on linear TV marketing spend to a focus on OTT/CTV advertising is largely due to the fact that OTT/CTV allows for better targeting and attribution. This form of advertising provides the opportunity for more personalized messaging across multiple platforms that has more precise targeting, which lowers the likelihood of wasted marketing dollars.
How to Use OTT Statistics to Your Benefit
OTT statistics are growing in nearly every category. In particular, CTV looks increasingly promising for marketers looking to marry the value of OTT with the performance of digital channels. Here are some reasons to consider testing CTV and OTT ads.
It minimizes ad spend waste
OTT advertising is one of the most targeted forms of digital marketing that exists. Rather than paying for ads on TV that are broad and generalized, you can target your ads to be viewed exclusively by those who have proven interest in your product or service (based on other viewing and shopping habits). This helps increase awareness of your brand and does so in a way to convert the viewers into customers.
Additionally, OTT advertising allows you to target a consumer wherever they may be, whatever they’re watching, regardless of what platform they’re viewing content on. This allows digital marketers and investors to target people based on their individual viewing habits and create targeted ads that have a higher chance of success.
Unlike OTT advertising, CTV advertising often allows you to pay on a CPA or CPI basis, rather than per impression, stretching your ad budget even further.
It allows you to reach audiences across multiple platforms
With OTT advertising, you can retarget audiences on social media, websites, and more. This brings viewers into multiple different channels of your marketing strategy, which will increase engagement and increase your conversion.
CTV retargeting also allows you to shore up the consumer journey from web to TV. The use of a simple pixel makes it possible to retarget in front of the big screen.
It allows for easy measurement
As a digital marketer, being able to track the performance of your campaigns is key. OTT ads make it easy to do this due to their use of in-depth analytics that show OTT statistics such as views and completion rates. Brands no longer have to wonder whether viewers actually saw their ads (which is the case with traditional television). Things such as pixel-based tracking allows brands and businesses to determine whether a person viewed an ad, and whether that viewing prompted action. This means you can calculate your ROI with greater ease and see what’s working best.
Because smart TVs are tied to a consistent IP address, they also make multi-touch attribution possible across various household devices.
One of the struggles with OTT and CTV advertising is maximizing your budget through a transparent partner. And that’s where a buying and attribution platform such as tvScientific comes in. Our platform is the first CTV advertising platform that combines the power of television and the precision and measurability of digital marketing into one. To learn more about how our platform can help with your business or brand’s marketing strategy today, get in touch with us today.
Calls-To-Action/Reaction and Engagement
Creating Calls-To-Action is the easiest, best way to gain engagement with your audience, not only on your sites but on social media platforms too. From questions to polls to videos, there are many ways to create CTAs to pique interests, shares and likes. Let’s dive into some stats on engagement rates brought to you by our pals at SocialPilot then discuss easy ways to create easy calls to actions.
- Over 4 million likes generated every minute.
- Facebook engagement increases by 18% on Thursday and Friday.
- A video post increases interaction by 600% on Facebook.
- A live video engagement is 26% on Facebook, higher than any other social media platform.
- Facebook videos with captions increase the watch time by 12%.
- 49.9% of all posts are link posts, making it the most common Facebook content. This is followed by images and videos.
- Longer captions get better engagement.
- Instagram has 58% more engagement per follower than Facebook.
- Videos get 21.2% more engagement compared to images.
- Posts with at least one hashtag average 12.6% more engagement.
- Instagram users engage more on weekdays, with Wednesday and Thursday showing the most engagement.
- Tweets with hashtags have witnessed engagement by 100% for individuals and 50% for brands.
- Using 1-2 hashtags can get you 21% more engagement.
- Tweets with more than 2 hashtags might have 17% lesser engagement.
- Hashtagged tweets have a 55% more chance of being retweeted.
- Tweets with a GIF gain 55% more engagement than those without.
This is just the tip of the iceberg. The article features well over 400 stats on the biggest social media platforms.
So, what is the easiest calls-to-actions?
To keep your audience interested, make things fun and interactive. Make your audience an active participant and they will spend more time on your site and interacting with your socials. Questions and polls are a perfect way to increase Social Media engagement and gather useful information about your followers. You can also use these questions/polls on your website or any platform you like.
Through an in-depth analysis of our customer’s goals, current website and media strategy we create custom solutions to meet those needs. Alpha Media is in the business of building relationships with local audiences. Contact us today to discuss how we can help you grow your audience engagement.
How to Test OTT Without Blowing Your Budget
Marketers know that ad testing is a critical component of any successful performance campaign. But testing a new channel is a complex process. The good news is it’s entirely possible to test OTT campaigns while driving positive ROAS. Especially if you commit to CTV as your delivery channel. When you’re ready to introduce television advertising to your channel mix, there’s a strategic way to avoid flushing your initial investment down the drain on the off chance that there might be a return. Even if you are new to the world of TV advertising, this approach will help you gather information about its potential effectiveness. And you don’t have to blow your entire advertising budget to find out if it can work for you. Read more to learn how you can test OTT and not waste your budget.
Here are five tips performance marketers can use to find success from their very first TV ad campaigns:
#1 Don’t Buy Based on CPM
In the world of television advertising, CPM (cost per mille) is a less efficient metric than CPA, or cost per action. Because CTV and OTT advertising unlock such powerful attribution capabilities, CPA is an incredibly effective approach. Viewers taking your desired action is more valuable than the total number of people who see your ad. Regardless of your desired action, a visit to your website or making a purchase.
For example, imagine your desired outcome is for consumers to scan a QR code featured in your OTT ad. With a CPM structure, you would be able to determine that you spent a certain financial sum to expose a certain number of people to your ad. But buying based on CPA instead allows you to see that spending X dollars running your campaign resulted in Y number of individuals scanning the QR code.
With OTT advertising’s 1:1 attribution model, buying based on CPA provides a more clear idea of the causes and effects of your ad’s influence. Performance marketers should work with an established partner that has invested in supply-path optimized media buying designed to hit CPA goals.
#2 Track Multi-Touch Attribution
Single-touch attribution models assign 100% of the credit for each successful conversion to a single marketing interaction (first-click or last-click, e.g.). It’s certainly helpful to know which marketing touchpoint eventually leads a consumer to perform the desired action. It is also important to understand the other touchpoints that contributed to that eventual outcome. That’s why OTT advertisers should use a multi-touch attribution model instead of first- or last-touch models.
Consumers — and OTT video viewers in particular — are highly likely to experience ads for the same brand or product multiple times before they perform the desired action. Performance marketers should choose an advertising solution that tracks and demonstrates the multi-faceted deterministic path from CTV ad exposure to outcome.
#3 Start Small & See ROAS
Many major advertisers make large investments in the hopes of seeing greater ROAS. Not every brand can meet the minimum spend that big-ticket platforms require. By excluding smaller brands from running and testing OTT campaigns, the ad platforms that require a minimum spend of $20,000-$50,000 miss out on the democratizing ethos of CTV advertising. Performance marketers just getting started with television ads should choose a platform with low or no minimum spend requirements. Depending on your vertical, you could see ROAS with an investment as low as $500.
#4 Iterate On Creative
Your creative efforts shouldn’t be separated from data-backed strategic thinking. Instead, marketers should design multiple iterations of each creative concept and then test each one in the wild with their intended audience. You could be tracking performance, engagement, or some other kind of metric. The results of the test will reveal which ad creative performs most effectively. In that sense, iterating on creative — and testing every version of your ad — will help marketers get the most out of each campaign flight. Even without huge up-front investment.
#5 Test Incrementality Constantly
Incrementality testing measures the results of a test group exposed to a campaign against a non-exposed control group. It’s an advertising best practice across a variety of channels. But many still treat it as a step in the process as opposed to a constant state. A one-and-done mindset about incrementality testing will deliver a snapshot of results in a static moment. However, conducting incrementality testing on an ongoing basis will show how test results shift over time. OTT advertisers — both new and experienced — should choose a partner that can support an “always-on” approach to incrementality testing.
Our CTV/OTT campaigns empower performance marketers to activate first-party audiences. With the addition of third-party data segments and retarget visitors from the web back to their connected TV. Our premium ad inventory unlocks access to connected TV devices. In addition, we access native apps and platforms, and the most popular OTT streaming services. Our campaigns offer powerful attribution capabilities and real-time reporting. In addition, we have built-in, always-on testing. This allows marketers to monitor and measure the incremental value of their connected TV advertising efforts. Ready to learn more about how Alpha Media can help you add OTT advertising to your strategy and test OTT without blowing your budget? Get in touch today.
Find out what your audience wants to see
When thinking of video strategy, most businesses should be thinking of YouTube as a channel to reach their audience. When it comes to video content, users are very “picky” about the specific content they choose to consume. Therefore, when posting content, know what your audience wants to see. The more you can meet the needs of your audience, the higher the chance that your content will be viewed.
As a business, your social media strategy should be to become a trusted source for content. Getting viewers to see your content can be tricky. So, how do you know exactly “what” video content your audience wants to see? Great question! Keep reading to find out one way.
YouTube is launching its new Search Insights feature for content creators. This tool will provide insight into what people are searching for specific to your channel and in general. You can expect a range of data points that will help you refine your content strategy. This article gives a good overview of what you can expect from this new feature: YouTube Launches New ‘Search Insights’ for All Creators
Here are a few highlights of the tool:
- You will be able to see information on key topics among your viewers as well as the search volume of each of those topics.
- It will also feature ‘Content Gap’, a feature that highlights searches that are not returning a high volume of matches. Exposing potential opportunities for you to focus, when creating content.
- There’s also a ‘Searches Across YouTube’ feature, which provides insight into common searches related to any keyword.
We know that it can seem daunting to stay on top of the evolving digital media trends. At Alpha Digital we work with clients to customize a strategy that meets their goals. Contact us today to discuss how we can help you grow your presence on social media and across the internet.
Wondered exactly how long a social media video should be?
A social media video can run from 1 second to many hours in length. Each social media platform is different. Understanding the differences and best practices for each social media platform is important. Knowing the ideal length for video can be challenging. Master these best practices for the most engagement on all social media platforms.
General Best Practices
- You have to have Video. As published in the Digital 2022 report, watching videos is the fourth most popular reason people use the internet. If you do not already have a video strategy, you should.
- The video should be clear. There is a finesse to video. The audio should be crisp and audible. And you should have clear visuals. Design elements should not detract from your images.
- Use captions. The Digital 2022 report explains that 30% of users aged 18-34 are watching videos with sound more than ever before. However, captions should be included with your video for the other 70% that are watching. Make sure your captions are accurate and grammatically correct.
- Be dynamic. You want to deliver impact in a brief, easy to digest format. To get your messaging across and not lose your viewer, use pop songs as an example. The pop song hovers around the 3-minute mark. Videos that garner more engagement, are brief. Studies show our attention spans are dwindling more and more as a result of the Internet.
Now that we’ve covered best video practices, let’s take a closer look at the best length and the different video options by platform.
Video: 1 minute
Try to stay at 1 minute if you can help it. If you must create a longer video, stay in the 2-to-5-minute range. Keep it brief and dynamic, with interesting imaging that can’t be missed.
Stories: 15 seconds
The maximum length for Instagram stories is 15 seconds per slide. Do not exceed 7 slides if your messaging needs multiple slides. Ideally, 3 slides per story is the sweet spot. Again, keep it brief and be sure to include a call to action.
Reels: 15 – 60 seconds
The secret to having your audience watch your reels to entirety is to capture the viewer’s attention within the first few seconds. Unlike the other Instagram video formats, Reels are meant to create viral moments and instant impact videos. Before you start a Reel, you select between 15 seconds, 30 seconds, 45 seconds or 60 seconds video.
Video length: less than 1 minute
To create content to go viral, keep your videos at less than one minute or stories that are less than 20 seconds. Long form videos can also perform well on Facebook. The Facebook algorithm is geared toward native video content. For the best performance, upload your videos directly to make the most of the algorithm.
Video length: 7 – 15 seconds
TikTok of course, is a quick video platform. Here, you’ll want to get as much information, in short, attention-grabbing content. And the sweet spot with TikTok is 15 second bites. Enough time to get a viewer’s attention before you see drop off due to length. Then there is TikTok’s 7-second challenge. This short content on TikTok also performs quite well.
Video length: 44 seconds
The sweet spot on this Twitter is 44 seconds. Grab your viewer’s attention as a prelude to a YouTube or Vimeo link which can showcase a longer format video.
Video length: 2 minutes
With this platform the length of your video will be dictated by what you are looking to achieve. If you are looking to monetize your YouTube videos, the minimum requirement is 10 minutes. This aligns well with longer vlog content. But, if your goal is to create viral moments, then you should stick to the 2-minute mark.
Video length: 7 seconds
Snapchat was created to be a quick moment. A snap, if you will. The maximum length of a normal post is 10 seconds, aim for 7 second posts for the best results on Snapchat.
Now that we have a better understanding of best practices for social media video by platform. What will you create? Need some inspiration? We can help you achieve your social media goals. Contact us to learn how we can help.
OTT vs. VOD – Understanding Streaming & On-Demand
Knowing the differences between OTT vs. VOD — and the opportunities they present — is crucial for performance marketers
Though television consumption increased during the pandemic, how people opted to watch TV changed. The pandemic saw the appeal of linear TV wane greatly and increased adoption of on-demand and streaming services. This shift means that the way consumers access advertising content has changed, and thus, it is crucial that brands focus their attention on the different streaming and on-demand models. We will focus specifically on two models, OTT vs. VOD to show why differentiating between the two is crucial for modern-day advertisers.
OTT vs. VOD: What’s the Difference?
Though the terms OTT (over-the-top) and VOD (video on demand) are often used interchangeably, they are not identical services.
OTT stands for “over-the-top” and it means any media content delivered to consumers over the internet instead of via traditional cable or satellite. OTT advertising, therefore, refers to marketing messaging placed in OTT content. These ads allow advertisers to reach audiences en masse due to the shift from traditional cable and live TV to streaming video content.
VOD stands for “video on demand” and refers to any video content that starts simply by pushing “Play.” In contrast, cable and satellite TV run programming on pre-determined schedules that viewers must observe should they want to view the content.
While OTT is used to describe the way the content is distributed, VOD is used to describe the way in which the content is consumed. That said, there is some overlap between the two.
What’s an Example of OTT vs. VOD?
Some of the biggest names in OTT include Netflix, Hulu, Amazon Prime, HBO Max, and Disney+. These are all channels through which content is distributed. Consumers can view the content via a streaming device such as a Roku or directly through their connected TV (CTV).
This is where the overlap occurs. Netflix, Hulu, Amazon Prime, HBO Max, Disney+, and other on-demand streaming platforms are considered VOD. YouTube and Facebook are as well since they contain video content. Three different models fall under the category of video on demand.
What are the different types of VOD?
It is important to know the differences between the three VOD models: SVOD (Subscription Video on Demand), TVOD (Transactional Video on Demand), and AVOD (Advertising-Based Video on Demand).
This type of video on demand allows consumers to pay a flat rate for access to a catalog of content. Netflix is a well-known example of the SVOD model. Subscribers pay a monthly fee, and in exchange have unlimited access to Netflix’s entire content library.
If SVOD is at one end of VOD, TVOD is at the opposite. The transactional approach to video on demand allows consumers to pay a one-time fee to watch a single piece of content. Commonly referred to as “pay-per-view,” this model is often used for things like major sports events or a hot new movie release. YouTube, Amazon, and Redbox all offer content through the TVOD model. Each episode or movie that someone wants to view requires a pay-per-view transaction.
While SVOD and TVOD are both paid models, AVOD is not. Advertising-based video on demand allows consumers to gain free access to streaming content that features ads.
OTT or VOD monetization strategies
There are several avenues to monetization of OTT and VOD, many of which complement each other. Indeed, most successful OTT channels merge several different payment structures into their overall monetization plans to ensure not only consistent revenue but also that they’re appealing to as broad a selection of consumers as possible. SVOD, AVOD, and TVOD can all be mixed and matched to provide the best possible options for a service’s audience.
Hulu is perhaps the best example of this. Its ad-supported service is free while viewers who want to skip the commercials can pay a monthly subscription to do so. In addition, Hulu offers add-on services such as premium channels for consumers who access content the core platform doesn’t provide itself. Movie lovers might tack a premium channel like Showtime onto their Hulu subscription, for example. Amazon Prime takes this one step further by including VOD content for rental or purchase.
The TVOD market is continuing to grow and is expected to reach in excess of $10 million in 2022. This model brings money in by allowing consumers to buy permanent access to a single piece of content or by renting a piece of content for a set period of time.
Advertising-based video on demand is seeing media companies profit a large amount of money. The interspersing of ads with free content is something consumers are more than willing to participate in; in fact, more than half of viewers (56%) are happy to watch ads in return for free streaming services.
We can help you determine the best strategy
As you can see, television advertising looks much different today with over-the-top and video on demand options. This means greater opportunity for brands to reach consumers, and in a new way that results in greater success. If you’re feeling overwhelmed with the idea of connected TV advertising, contact us today to learn more about how we can help with your television advertising strategy.
OTT Attribution is Changing the Future of TV – for Brands, Publishers, and Viewers
If TV is no longer linear and is now a digital medium, what’s keeping those millions of digital-first brands from taking advantage of the power of TV advertising? The issue has been OTT attribution. And now that it’s solved, TV advertising won’t be the same – for brands, publishers, and consumers. Here’s how. The TV advertising landscape has changed a lot since Don Draper’s heyday. But one constant has been the relatively small number of companies that use the medium. Today, a full 80% of US households have connected TVs (CTV) and a whopping 60% of viewing is now delivered via streaming services and apps. But more than 80% of the $72B US television advertising market is dominated by only 300-500 national advertisers. Compare that to the more than 9M active advertisers on search and social. And you can see a massive disconnect. And opportunity.
The TV Advertising Accountability Barrier
TV has always been a broad reach medium. Historically, advertisers needed BIG budgets to reach mass audiences. That priced out most advertisers.
But even brands that could afford to be on TV struggled to understand how effectively the TV spend was working. Or if it was working at all. Intuitively, smart marketers knew that (most) TV campaigns were meeting core goals and KPIs. But could they prove it to their bosses? That’s where things sometimes got tricky.
You created a great ad and executed a smart media plan. Your target saw the ad and remembered it. Or maybe even made a mental note to circle back. So, the next day, they type the brand name into a Google search and navigate to your website. The website click gets attributed to Google and your TV ad gets zero credit. Then your boss asks why you wasted all that money on the TV ad.
But what if TV attribution methodology evolved to allow you to track the full customer journey? It’s not future talk anymore.
Introducing Precise OTT Attribution
Our partner tvScientific, is the only CTV platform offering optimized media buying. And comprehensive measurement plus 1:1 attribution on a direct, self-managed basis. tvScientific is a performance advertising platform for connected TV. For the first time any business can use TV with ease, precision, and measurability to reach consumers and generate growth. To fully appreciate OTT attribution and how it will change the TV landscape, it’s important to understand how it works.
How Does the tvScientific OTT Attribution Method Work?
How did we solve OTT attribution? With the tvScientific Method, we deliver your ad to a household’s CTV and identify the IP, which is stored in an exposure file. We then append that exposure file with any additional devices tied to the household IP. If and when the ad-exposed consumer completes your desired action. Whether it’s a website visit, download, form completion, purchase, etc. on a smartphone, laptop, or tablet, we see that action and collect the data. Without OTT attribution, the attribution for the action would have gone to Google. With the tvScientific Method, we know the CTV ad deserves credit.
What Does OTT Attribution Mean for the Future of TV?
The impact of CTV and reliable OTT attribution can’t be overstated. For starters, more than two-thirds of CTV consumers are “ok” with ads. And they prefer ad-supported content rather than an ad-free subscription. In fact, the study revealed that a full 60 percent of consumers who were served relevant ads actually enjoyed the viewing experience. Of course, consumer engagement in ad content while involved in an opt-in activity like TV viewing will be significantly higher than having a digital ad pop into your feed while you’re in line at a coffee shop. This shift to engaged viewers being targeted (and re-targeted) with relevant ads will undoubtedly lead to significant jumps in ROAS.
Quite simply, TV advertising will never be the same again – for marketers, consumers, and publishers. This article has already noted how the future of TV will be different. No one can predict everything the future will bring. But here are some other implications we’re thinking about:
Already, 60% of content is delivered via streaming services and apps. With the world’s population stuck at home during the global pandemic, consumer adoption of these services accelerated. This trend will only continue, with cord-cutters expected to outpace linear TV viewers by 2024.
Publishers will increase revenue by selling ad inventory directly to brands and retain consumers by delivering improved viewing experiences. Streaming services and CTV platforms will continue to invest billions in more and better content, to the delight of consumers and marketers. And more inventory will equal a more affordable way for companies of any size to get on TV.
For Companies and Brands:
First and foremost, the opportunity for millions of companies who never dreamed of getting their message on TV is there for the taking. That in itself will be a game-changer in the TV viewing experience of the future. It won’t just be huge insurance companies, pharmaceutical giants, car companies, and beer sold back-to-back-to-back.
A different, but related point is that this will change a company’s ability to scale and grow quickly. Being able to capitalize on the power of television with the precision of digital marketing will be a major accelerant to the growth of countless small companies.
Unlike linear TV, OTT attribution will allow advertisers to target and retarget specific audience segments, increasing the efficiency of ad spends. Traditionally, with linear TV advertising, a marketer may want to send a message and hope for a 3x frequency. And then moving on to a secondary campaign goal. But with OTT attribution, a new ad can be served to a customer as soon as that 3x threshold is met. Rather than relying on a handoff to search or social to pull the consumer through the funnel, marketers can use OTT retargeting. And they can continue to use the power of the big screen to achieve those goals.
With linear TV, creative testing is still sometimes done via storyboards and online panels. CTV allows incremental testing against smaller specific audiences and campaign objectives. The test and learn playbook of today’s social media will become the playbook of tomorrow’s TV advertising.
Let’s get the most obvious change out of the way — with so many more companies using TV, consumers will be exposed to an explosion of new brands, products, and messages.
But when brands marry the precision of digital with their TV advertising, they will be able to find and deliver the right audience and the right message, as well as track those outcomes. For consumers, this means more appropriate ads will be delivered to your screen. Maybe you’ll no longer have to shake your head and wonder why you’re getting a steady stream of Rogaine, Medicare benefits, and random prescription drug ads when you’re a healthy 35-year-old woman. Wouldn’t that be nice?
Finally, is it possible that the combination of an ocean of new brands on TV with dramatically better targeting might even lead some consumers to stick around for ads and not skip them? Skeptics might say that’s too ambitious. But we’ll be watching.
How Can We Help You?
Our partner tvScientific is the only CTV platform offering optimized media buying, comprehensive measurement, and 1:1 OTT attribution on a direct, self-managed basis. Whether you’re a big brand or a small company wondering what CTV advertising could do for you, tvScientific enables any business to use TV advertising with ease, precision, and measurable performance to reach consumers and drive growth. Contact us today to get started.