OTT Advertising May be Hot, but These Obstacles Remain

January 21, 2020

Nielsen Obstacles Adoption OTT Advertising Jan2020The majority (66%) of US homes with WiFi have an OTT device and OTT ad spending has been a hot topic for some time now. However, per a new report [download page] from Nielsen, marketers are encountering some obstacles that have slowed their adoption of OTT as an advertising platform.

One of the biggest obstacles for marketers when it comes to OTT advertising is its measurement capabilities (62%). This concern is reflected by data from FreeWheel, which found that only about half (53%) of local media planners find it easy to measure campaign attribution for advanced TV, including OTT.

Beyond measurement, some 58% of respondents say that internal knowledge gaps are an obstacle in adopting OTT as an advertising platform, while another 53% cite media planning efficiency/transparency. Advertisers also cite other obstacles such as the advertising inventory scale (50%), advertising inventory quality (47%) and audience targeting (47%), and to a lesser extent with obtaining organizational buy-in (40%) and overlap with linear TV media (38%).

For the most part, marketers at brands and agencies have a similar view about these obstacles, though there are a couple of exceptions. For example, while 65% of brands find the measurement capabilities of OTT to be a hurdle, just 57% of agencies feel the same. And while both brands and agencies say that audience targeting is a top priority for their marketing campaigns this year, half (50%) of the brands surveyed say that audience targeting is an obstacle for OTT advertising, compared to 43% of agencies. Additionally, more agency respondents (55%) think that advertising inventory quality is standing in their way of using OTT versus 43% of brands.

Despite these obstacles, recent research indicates that the advantages are worth overcoming them. The share of premium video ads viewed on OTT devices continues to grow, and the audience for original digital video proves to be an attractive one for advertisers. Meanwhile, a new report from TiVo [download page] finds that each of consumers’ top 11 favorite video service bundles features an advertising video-on-demand (AVOD) service, indicating that inventory quality and quantity should continue to improve.

The full report from Nielsen can be downloaded here.

About the Data: Results are based on data from a sample of 363 respondents; 247 brand executives and 116 agency executives. The majority of respondents (74%) were based in the US.

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