"I know you’re all feeling the darkness here today. But there’s no reason to give in. No matter what you’ve heard, this process will not take years. In my heart I know we cannot be defeated because there is an answer that will open the door. There is a way around this system. This is a test of our patience and commitment."
Even Don Draper needed to inspire confidence in the hearts and minds of his team – and himself – amidst the turmoil and chaos in the world of advertising. As we've experienced the evolution of the digital landscape over the years, the path to riches – especially ad-driven monetization – has not been an easy one for many companies to navigate due to changes in consumer preference, changing business models, and the double-edged efficiencies of technology.
Last week, Advertising Week's flagship event was held across 10 stages at various venues across Manhattan for its 14th year. While we are always excited to see which topics, themes, and issues will dominate the mindshare of the attendees, we were especially excited about this year, as we were the live streaming partner of choice.
Advertising Week used the Brightcove Live Module to stream over 400 hours of content sessions over the course of four days. Advertising Week’s decision allowed them to extend their audience and reach. Throughout the week, viewers could watch live sessions from the comfort of their laptop screen or even from their phones while scurrying from one venue to another. And for those who missed a session, viewers can replay sessions at this Brightcove Gallery for Advertising Week.
Over the course of the week, we had multiple employees attend in person and via the live stream experience. We heard a lot about diversity in the industry, emerging technologies, monetization, politics, and data.
I had the privilege of participating in the "Streaming is the New Black" panel, moderated by Business Insider's Mike Shields. Alongside Serge Kassardjian (Google), Kym Nelson (Twitch), Eddie Vaca (AmpLive), and Alex Wallace (Oath), we did a rapid-fire discussion of various topics.
One of the interesting topics posed was whether there are too many streaming services and whether viewers – most notably younger audiences like millennials – would ever come back to the Pay TV bundle. While there is a multitude of OTT services available today with new services seemingly launching – and folding – every month, the availability of global premium content to global audiences seems to be ever growing. However, despite the increased access – and consumer cost – to content, the greater obstacle for consumption may be the paradox of choice and the apparent lack of discovery. And speaking of, it's few and far between that companies like CBS can use its deep pockets for production and marketing of high profile content like Star Trek: Discovery and not only build awareness across a broadcast audience but leverage it to convert viewers to their paid All Access OTT offering. And with its non-binge model and split season for Star Trek: Discovery, CBS can even drain the $5.99 (or $9.99 without ads) from your wallet over multiple months.
Will you keep your subscription? I was asked. Honestly, no, unless All Access hooks me with more original programming along the strategy of Netflix, Prime, and Hulu. Except for Star Trek: Discovery, there isn't enough compelling content for All Access to be an additional channel alongside my existing Pay TV subscription, Sunday Ticket upgrade, and various other digital OTT services. In many ways, this underscores the notion of a new way of thinking about "the bundle." It's unlikely younger viewers – or any, in my opinion – will go back to the traditional Pay TV bundle. As we see more pure digital OTT services as well as "pure digital" versions of Pay TV offers – whether it's the mini-bundles of Sling TV or HBO Now – the consumer will create their own version of the bundle as defined by OTT services and likely defined by specific content, as evidenced by the consumer behavior with House of Cards (Netflix), The Handmaid's Tale (Hulu), Game of Thrones (HBO Now), and Star Trek: Discovery (All Access).
What about live streaming? With the evolution of technology to dramatically simplify the creation, operation, delivery, and monetization, the democratization of live streaming enables this format to create new opportunities for producers and viewers alike. In the past, live streaming was an operationally difficult and costly endeavor: expensive equipment, specially skilled people, limited distribution. Today, armed with a phone and an internet connection, the live streaming experience can span "low brow" to red carpet, with monetization a button push away.
Is advertising still viable for OTT? On the surface, the easy answer for OTT is subscription. Subscription affords a fairly predictable and recurring revenue stream. However, the subscription model isn't without its risks: churn, revenue that isn't linked to actual consumer usage and its associated content delivery costs, and the share of wallet. The last is likely the most underestimated, as a paid subscription immediately puts that OTT service in competition with the major players (i.e., All Access, Hulu, Netflix, Prime) and the monthly Pay TV bill. Despite the challenges, advertising is still a viable monetization model. Ad budgets continue to shift to digital. Consumers still want "free", i.e., many are still willing to accept the tacit contract of ads in exchange for a "free" product.
What the industry needs to focus on is how to make the advertising experience better: innovative content and formats (i.e., duration, aspect ratio), intelligent campaigns and trafficking (i.e., RIP watching the same 30 second razor pre-roll three times in succession), more accurate tracking and verification to ensure trust and compliance for publishers and brands, and most importantly, creating a viewing experience (e.g., via technologies like server-side ad insertion) that has the same quality of viewing as broadcast.
A few weeks ago, my three year old daughter picked up her tablet to watch one of her favorite shows. Upon launching the app (of a major media company), she selected an episode and waited. And waited. After five seconds of buffering for the pre-roll, she handed the iPad back to me. "Daddy... broken." As Don would say, "Change is neither good nor bad, it simply is. It can be greeted with terror or joy." We can – and should – put the joy back in digital advertising.
