Free Premium OTT Exploding, Better CTV Ad Experiences Next

It is no secret that streaming TV is becoming more popular. This is especially true because of events like the coronavirus pandemic, where people are looking for ways to watch premium video content. As more and more services offer streaming, it becomes important for them to find ways to stand out from the competition.

Content is very important for streaming services. It is what attracts and grows the subscriber base. HBO makes its own content exclusive to its platform. This way, people who are homebound will want to watch it. The value is in both the quality of the show and the exclusivity.

However, user experience is also important for streaming services. People are happy to watch ads if it means they can save money on premium video content. But service owners need to make sure that ads are not disruptive or repetitive.

Ad pods, or "pods" for short, are the main part of advertising on CTV. Direct advertisers often buy these pods. However, as programmatic advertising grows in popularity, we need to rethink how ad pods are put together.

Ad pods and related concepts - deduplication, competitive separation, and frequency capping - are not new, but they will be important in deciding the winners of the "streaming wars" and CTV advertising. Today, when people binge watch TV, they see many of the same ads. So even though they are willing to watch commercials, they don't want to see the same ad over and over again.

Here are four ways to think about how ad podding will change the streaming wars, specifically when it comes to premium video advertising on connected devices.

Consumer approval or bust

People are getting used to not seeing ads (for example, on Netflix, Disney+, Hulu's premium subscription, etc.). This has affected how ads are delivered elsewhere. For example, we've seen adjustments from linear and streaming content providers alike when it comes to decreasing ad loads (NBC is actively aiming to avoid this with Peacock's five minutes of ad time per hour). We'll likely see more of this. If consumers see ads, they need to be delivered better.

Ads are important for businesses to get the word out about their products. But people don't like seeing the same ads over and over again. They also don't like seeing ads that are not relevant to them or that are not timely. It is important to show the right ad to the right person at the right time. People won't put up with anything less, or they will stop using your product.

Legacy ad tech and ad pods today

CTV advertising has a user experience problem today. This is because the technology solutions that were originally made for the web are now being used for CTV platforms. The core problem is that the user experience of the web -- where cookies are prevalent and there is often only one pre-roll ad per video -- doesn't work for CTV.

For example, today's CTV auctions are often done one auction at a time. This can create latency issues and duplication issues. This can lead to confusion for buyers. Furthermore, buyers can win the same user's ad within the same pod. This reduces win rates and increases costs.

Overall, we need to re-architect the way we do CTV advertising.

The new CTV ad experience

Podding helps avoid the same ad creative being shown multiple times to the same people. This is done by making sure that ads from different companies don't appear next to each other. This also helps keep audiences from getting tired of seeing the same ads over and over again.

TV advertising can be more effective if the ads are tailored to the audience. This is because viewers can provide feedback about the ads in real time. CTV (cable television) provides this opportunity for feedback, while linear TV does not.

Proprietary, siloed solutions will fail

The industry knows this, but they are only doing it in their own separate ways. SSPs are creating their own solutions which have some drawbacks to them. They see the needs for ad podding and frequency capping, but without the ability for these solutions to be implemented across all SSPs, devices and audiences, it will be hard for them to grow. No one wants to customize technology for five or more different SSPs.

People are still fighting for a good spot. Some people have started to make changes, like reducing the number of ads. This makes it better for the viewers. But in the end, it will be how many ads there are in a certain time that decides how valuable they are. So this is important for companies that want to advertise in streaming videos.

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