As we covered in the previous two blogs of this series, national advertisers are gravitating to addressable, targeted Over-the-Top (OTT) ad campaigns to zero in on viewers whose interests, demographics, or behaviors align closely with the products or services they’re promoting. Statistics published in the 2018 PWC Media and Entertainment Outlook showed OTT advertising has been steadily growing—from 2.61 billion in 2013 and 4.87 billion in 2018 to a projected 5.98 billion by 2022—largely driven by the platform’s innate ability to target desired viewers.
To remain competitive, many broadcasters and cable video operators built out HTTP IP-based workflows—separate from their traditional linear UDP video workflows—to deliver their own OTT programming and addressable, targeted ads.
While this move opened opportunities to sell addressable OTT ads, this new ad revenue stream was negatively impacted by the increased operating costs and inefficiencies that came with maintaining two redundant distribution chains—one for OTT and one for linear broadcast.
In blog two of this series, we talked about a smarter approach to the dual UDP and HTTP ad tech workflow conundrum that unifies distribution, streamlines operational inefficiencies and makes operators more competitive. By applying innovative technology capable of cost-effectively converting UDP workflows to mirror what’s being done for HTTP, operators can experience the best of both worlds. Suddenly, cable and broadcast ad sales teams become free to sell targeted ad campaigns across platforms.
The PWC Media and Entertainment Outlook research cites that while cable advertising has plateaued in terms of a volume business, “It remains a strategic growth vector for distributors as they combine the large volume of impressions across their network with the addressability and targetability of digital,” adding that, “optimization of the impressions is also a key strategic driver to increase the revenue.”
As these newfound ad dollars flow in, operators find themselves in a much stronger financial position, with the technical and business efficiencies they need to compete with native digital OTT players. After all, these digital/OTT competitors have been running the table with global scale and streamlined operations that power business models that were never hampered by legacy architecture.
Game Changer
With a greater inventory of higher value ads to sell, operators deploying an HTTP distribution strategy are realizing many business benefits and advantages, including:
- Increased ad revenue by making ad avails to legacy STBs more valuable through improved regional addressability;
- Ability to help advertisers target STB viewers on the basis of regional, demographic, or other characteristics;
- Streamlined introduction of smaller zones versus satellite-based approaches, enabling narrower geo-targeting—a capability especially of value as the U.S. heads toward the next massive political season;
- Capability to give viewers in the legacy domain more relevant ads to reduce channel switching during commercials;
- Technical support to unify ad sales efforts across multiple platforms; and
- Operational costs savings via consolidated HTTP and UDP products and workflows.
In addition to increasing ad sales and revenues through addressability, unified sales and distribution workflows open the door to new revenue as operating costs and the inefficiencies resulting from redundant workflows start to disappear.
No longer held back by the operating costs and limitations imposed by legacy ad splicers, encoding boxes and other inflexible, proprietary hardware, traditional operators are now free to invest more money in HTTP workflows. This path forward lets them build on more promising, future-proof infrastructures for additional gains down the road.
This is the value proposition offered by Imagine Communications’ breakthrough HTTP-to-UDP Gateway. With this comprehensive, automated smart ad tech workflow, Imagine is enabling traditional operators to reduce operating costs by unifying legacy and HTTP workflows. With the operational savings, augmented by new ad revenue streams, more resources are freed for strategic growth-based investments. The HTTP-to-UDP gateway also increases and maximizes addressable ad avails and revenue, giving operators a winning edge in the multiscreen, OTT arena.