Roughly half of US adults over 18 use at least one OTT service¹, which translates into about 182 million OTT subscription video service users². OTT ad spending has seen double-digit increases in recent years, with +54% YoY growth in 2018, 41% in 2019, and 32% in 2020³. There is no going back; cord-cutting is here to stay, and this presents new and exciting opportunities for local and regional dealers. ¹ (OpenX), ² (eMarketer), ³(MagnaGlobal)
Before diving in, let's take a minute to review three key terms that are used interchangeably and sometimes incorrectly. "OTT" refers to the delivery mechanism for TV content online, usually through streaming or video on demand served "over the top" of traditional providers. CTV stands for 'connected TV's" which access programs through a DEVICE, like a smart TV, ROKU stick, or gaming console, to watch TV content online. Lastly, "Programmatic" is a METHOD of purchasing video ads from various networks and providers.
OTT ads can be targeted by geography (typically zip codes or cable zones if you are buying it from a cable provider), demographics (age, sex). For automotive advertisers, you can select things like 'in-market for an SUV,' or "in-market for a Toyota." Using a combination of POLK and Experian data, you can both include and exclude certain buying segments (want an SUV buyer, but don't want a Nissan buyer, for example). The more you narrow the segments, the more you pay, and you want to be careful not to narrow the segments to the point that you are working with too small of a data set. Typically a good rule of thumb is to look at the budget you want to spend (3k to 5k per month is a good place to start), look at the fact that you want to reach each viewer with a reasonable frequency (say 5x monthly), and see what size population and targeting that leaves you with- and adjust accordingly from there.
Whereas a basic OTT campaign can run as a mix of connected TV (big screen) or adding other devices (laptop, tablet, mobile), there is also an opportunity for dealers to generate additional content that can be served alongside the video ad while the ad is on-screen. This is referred to as "responsive" or right-rail content (since it often sits to the video's right on screen). This information is pulled directly from the dealer's website and will usually be monthly offers (leases, payments, etc.) customized by vehicle. They are not statically embedded in the ad but rather dynamic to change on TV as the offers on your website change. The obvious advantage is that consumers are served up to the minute information relating specifically to the vehicle(s) with which they have shown purchase intention. There is also the additional benefit of reducing the time and production cost to update the video content whenever the offers change.
This is an area where I see the most difference between providers. A basic, bare-bones report should include at least:
Additionally, you can also see which ad creative and offers generated the most engagement allowing a/b testing of different messaging to improve campaign effectiveness over time.
OTT ads are typically delivered on a variety of devices within the household, including TVs, desktop or laptop computers, tablets, or mobile phones. Running an ad on the largest screen in the house in a long-form TV show is a much different environment than running the same ad on a laptop or cell phone. Ads watched on the 'big screen' are fully watched nearly 98% of the time. Contrast that to YouTube or Facebook, where most ads are viewed for under five seconds.
Ads are most typically sold on a CPM basis (CPM stands for Cost Per Impression). The cost per impression for the big screen can be as much as 5x that of other positions. Knowing this will help you to compare different offers more accurately. Since novice buyers may just blindly compare CPM's looking for the cheapest deal, some providers will include things like an in-banner video (think video display ad) and other delivery pieces to make the overall CPM look more attractive.
Beware of making a decision based solely on price. Ask the provider what portion of the campaign will deliver on smart TV's on LFP (long format programming) as opposed to other devices.
Pricing varies across vendors and platforms and is also sold at auction, meaning it fluctuates depending on daily market conditions. As of today, a reasonable planning rate for a blended CPM would start around $18 per thousand, with automotive-specific packages incorporating purchase intention data, responsive formatting, and full attribution costing more.
With precision targeting capabilities, new messaging options, enhanced tracking, and a lower cost relative to traditional TV, OTT is well-positioned to drive a higher ROAS for your dealership. The time is now to take advantage of this exciting new opportunity to promote your store.
Ed Steenman is owner of Steenman Associates that provides traditional and digital media services to automotive dealerships and dealer groups nationally. An internationally recognized writer and presenter on social media and digital strategies, Ed Steenman and his team have been on the 'bleeding edge' of the digital revolution both presenting and implementing digital strategies for a diverse group of clientele. Recent engagements include keynotes and breakout sessions for Volkswagen of Mexico, the Associated Equipment Dealers Lawson Executive Summit in Chicago and others.