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COVID-19 has driven a surge in digital media consumption during the lockdown; however, advertisers and brands have cut their marketing budgets which has created some unique demand and supply dynamics. SpotX joined OMD APAC, VIU, Unilever, and World Federation of Advertisers (WFA) at Avia’s OTT Virtual Summit to discuss how advertising spend is shifting, how various parties in the ecosystem are adapting to challenges, and advice for brands.
Shift in advertising spend towards OTT
Although there is a general downward trend in overall investment in Q1 of 2020, as WFA data revealed, there is a clear shift to digital, with online video experiencing a modest 7% decrease in spend, compared to a 56% decrease for event and experiential spend.
The rapid adoption of mobile phones, driven by cheap data and devices across Asia, has accelerated mobile video consumption, particularly on OTT. This has been further accelerated by the pandemic and mass stay-at-home notices.
However, as OMD COO Rochelle Chhaya noted, “With more competition to attract consumer attention in an already-divided OTT pie that is split between SVOD and AVOD, brands have to consider the kind of content they’re presenting to consumers to ensure a connection instead of blindly shifting spend.”
SpotX Managing Director of Asia Gavin Buxton also said brands are looking carefully at how they are allocating investment in OTT, and expect strong results.
“While not all categories are spending, brands which are diverting to OTT are more cautious and have increased expectations of content in terms of bandwidth to deliver and cost. This poses additional challenges for OTT operators to manage,” says Buxton.
In terms of weathering the pandemic challenges, OTT operators like Viu have an advantage where content is produced six months in advance, minimizing disruptions to their pipeline compared to free-to-air TV. With Viu experiencing significant increases in consumer screen time, they expect ad dollars to shift towards where the audience attention is.
COVID-19 has accelerated collaboration
OMD APAC has been more involved in discussions beyond media in order to drive its clients’ business metrics in addition to media KPIs. Four key areas of collaboration were highlighted:
- Work with clients to strategise for long term growth;
- Help scale client knowledge to prepare them for digitalisation and drive business value;
- Encourage brands to go against pausing all ad spend and capture brand space now for faster recovery; and
- Help secure premium inventory now to ensure clients are not affected by inflation once things return to normal.
However, the rise of popular advertising platforms like OTT attracts bad actors in the industry, and Unilever emphasized the importance of brand safety as a topic of concern.
Brands are keen to ensure OTT ads deliver a comparable user experience to TV along with exploring more advanced data and targeting capabilities. Fortunately, as SpotX highlighted, Asia has an added advantage as a mobile-first region. The mobile industry has more advanced standards and measurements in place, and brands can track against device IDs and get more granular with targeting as compared to CTV in the west. Key performance metrics such as viewability, CVR, and IVT are easily measurable targets to deliver on, which is a compelling factor for advertisers investing in the space.
Understand your audience, test, and learn
“None of us learn to swim by reading a book. Only good comes from getting in early and learning as you go,” said Unilever VP of Global Media David Porter, summing up the importance of getting into the OTT space early. This not only gives brands better opportunities to test, learn, and succeed, but also gives them more say on transparency, performance, and brand safety.
As SpotX’s Gavin Buxton puts it, “The best way to understand is to test and learn, to be part of the environment.” Before the pandemic, SpotX saw a 4x increase in audience and scale, with COVID-19 resulting in an additional 60% increase in weekly viewing.
This is a great time for brands to embrace OTT though it remains crucial to have a good understanding of the medium and audience.
“If you want MTV, you are not going there to watch a Korean show. If you’re on HBO, you’re not there to watch music videos. That’s what is crucial. What audience does it attract? Each TV channel is tailored to a certain audience. OTT will move in that direction,” said Varun Mehta, Country Head of Viu Indonesia.
In the same thread, OMD emphasized the importance for clients to know their business objective when considering OTT and where their audiences lie in the funnel in order to deliver the most effective ad in the right context and audience, backed up by a constant cycle of measurement, evaluation, and learning.
As OMD COO Rochelle highlighted, “Put yourself in the shoes of the consumer and what change you want to bring about with advertising, so you can plan the right content and message to go out. Make sure we’re measuring and learning. The more we measure, we know what kind of content the audience engages with, and we know what audiences are watching, and the more efficiently we will be able to target.”
Watch the panel discussion here:
About the author
Doris Sun is the Marketing Manager, APAC at SpotX. She creates and executes the SpotX marketing strategy in one of the fastest-growing regions in the world. Based in Singapore, she started her marketing journey in the food and beverage and hotel industries before diving into ad tech. When not at work, you’ll find her planning her next travel adventure, food-hunting with friends, or attempting to be artsy with flowers, crafts, and cakes.