By Jason Friedlander, Director, Marketing Communications
It's not an overstatement to say that over-the-top (OTT) technology has revolutionized sports content. It's made it so that content owners are able to offer almost any game under the sun to their audiences. No matter how niche the sport, customers can now watch their favorite matches on any device they have connected to the internet – from a desktop computer to a smartphone.
But the boom in OTT sports streaming brings up big questions about monetizing all these new programs. With hundreds of live sports events broadcasted on the internet every day, many content owners are taking another look at their monetization strategies. They must figure out how to sell newly available inventory, even if they don't know how much inventory will actually be available.
From a content owner's perspective, it may be easy to sell a spot during the Superbowl or NBA Finals. But with OTT and the introduction of Dynamic Server Side Ad Insertion (DSSAI), which serves up fully dynamic, targeted ads during live and on-demand streaming – it's an impossible task to try and direct sell all of the ad spots, because you never know who will be watching and what the right ad for them will be.
Fortunately, there's a solution. Thanks to programmatic ads, which use software to buy digital advertising inventory as the spots dynamically appear within individual streams of the same event, advertisers can target viewers on an individual level, without displaying irrelevant content, ultimately bringing endless earning potential to OTT sports content. To do this, though, brands, ad agencies, content creators and OTT providers must work together to usher in this programmatic ad age of television.
Setting the stage: The programmatic ad shortage
Back when most sports fans had cable and sports networks broadcasting up to 12 live sports events a day at most, it was simple for brands to know where to direct their advertising dollars and for networks to sell ad spots.
But, things have gotten tricky now that OTT providers are streaming everything from boxing to basketball to badminton 'round the clock.
Previously, ad sales revolved around a finite number of advertising slots, which a sales department would work to fill. Now, rather than sell each digital ad on a stream-by-stream basis, more OTT providers and content creators are turning to programmatic ads to monetize their content. There's no limit to how many times a purchased ad will be shown, but the programmatic ad algorithm will dynamically show it to the most relevant customers at the most relevant time. This process makes that ad spot more valuable to the content owner, the advertiser and the user. It's a win-win-win.
However, this flies in the face of traditional ad buying, and ad agencies haven't been as quick to catch up. As a result, while an increasing number of live sports events are streaming all over the globe, there simply isn't enough high-quality programmatic video ad inventory to keep up. That means viewers are being shown a lot of irrelevant ads, slates or a small number of relevant ads that they're seeing again and again (and again).
The problem of irrelevant or repetitive programmatic ads is one the industry can fix, but only if brands, agencies and content creators all work together. Ad agencies must fully embrace programmatic ads and work with OTT providers to target viewers on an individual level.
Moving forward: Why collaboration is the solution
Imagine a world where we know so much about the user and her buying habits that we can predict with high confidence that the next time she sees a specific ad, it will trigger a buying action. You can't put a number on that type of targeting. The Wall Street Journal reports that advertisers are still trying to wrap their heads around this concept. When ad negotiations remove most of the zeroes behind the viewership numbers, it can be a real mental leap. Content owners worry that a machine can't make the right decisions on its own. But once they do take the chance, the results do the talking. For example, when sports brand NBA on TNT switched from direct sales to programmatic ads, it experienced a 17 percent jump in brand awareness; when Chase switched to programmatic ads that displayed only to customers most likely to buy, it was able to switch from ads on 400,000 sites to 5,000 – and enjoy the same results.
Today's ad technology is finally enabling advertisers to target viewers one at a time, and this means thinking about ads differently. In the old days, content owners needed millions of eyeballs on their media to sell ad space that agencies would find valuable. But when the algorithm behind programmatic ads is always automatically serving the most high-converting ads, content owners don't need millions of viewers. They just need thousands, or potentially even less.
When it comes to live sports events, emerging OTT services show that the technology exists to both deliver hundreds of niche events cost effectively and to monetize them dramatically. Every part of the content industry must embrace this new technology to make it happen.