As marketers and content creators, we’ve all grown accustomed to being able to measure and react to the content we put out into the world. Platforms such as Facebook, Google, and YouTube all have deep metrics built into the platforms that allow creators and publishers to analyze their media down to the most minute details.
This has always been seen as the benefit of digital marketing over traditional media: the ability to measure and attribute success to particular content and advertisements over others.
What is OTT Advertising?
Over-the-Top (OTT) advertising is content delivered via a digital streaming platform. Think Hulu, Amazon Prime, Apple TV, etc. As more and more consumers look to cut the cord and back away from traditional cable services, they are choosing these streaming and high-speed broadband offerings.
How Does This Benefit Marketers and Content Creators?
Traditionally, broadcast and linear television was a “set once and hope for the best” type of scenario. Since you couldn’t track any of your audience metrics, you had to rely on long-term data—and the possibility of missing the mark was quite real.
The advent of OTT advertising has allowed marketers to finally connect the two worlds of broadcast television and digital marketing. This finally allows marketers access to a world where viewers are sitting down to actively watch programs they choose, making it easier to measure granular data.
Before OTT, brands and marketers often had to rely on focus groups in order to test the effectiveness of their marketing campaigns. This was a costly and tedious process that often resulted in broadcast television ads being reshot, shelved, or completely abandoned.
Without being able to measure or attributable metrics such as video completion rate (VCR) to these campaigns, brands tested and relied on metrics and goals such as:
Companies create ads with the goal of making their brand more memorable in the eyes of the consumer. Ad recall is a metric where marketers can measure their messaging on a specific target audience. This has been primarily used on focus groups in the past, but OTT has allowed it to be used globally.
Brand Awareness Lift
Similar to Ad Recall is Brand Awareness Lift. Marketers always want their specific brand to be at the forefront of everyone’s mind. Brand Awareness measures how likely a specific brand is to be recalled over another. This can change over time and be greatly impacted by a successful campaign or by a great piece of creative.
While all of these metrics are certainly something that brands should continue to test and measure, OTT opens up the door for many more granular capabilities.
OTT Metrics You Should Be Focusing On
Thanks to OTT, you can now approach your video advertising similarly to the way that you would approach digital advertising. In near real-time, you can determine what is working, what isn’t, and what can be adjusted.
Here are a few basic metrics that you should consider measuring to make the most of your OTT campaigns:
Monthly Active Users (MAU)
MAU is defined as the number of unique users who accessed your campaign content during the month. This metric is important because it allows campaign managers to track the reach of their campaign and the engagement of their audience. Additionally, MAU can be used to compare the performance of different campaigns or to benchmark the performance of a campaign over time.
Video Completion Rates (VCR)
VCR measures how much of your ad that viewers are watching before clicking away or turning off.
The reason that this is important is that if folks are watching your ads to completion, this could mean that they are likely going to recall your brand after viewing your ad. Additionally, they are likely to reach the conclusion of your ad which, usually, holds the call-to-action and product information. This, in turn, usually leads to more conversions.
The good news for marketers is that VCRs have been increasing steadily over the years. Expert marketers speculate that this is due to ads being placed within long-form content within OTT ads rather than shorter form digital content.
So, keep in mind that people will more likely watch the majority of your ads if they are sitting down and watching a long-form piece of content such as a TV show rather than a short form piece of content like a three-minute video.
Customer Lifetime Value (CLV)
CLV is important in an OTT advertising campaign because it helps to measure the long-term profitability of a customer. This metric takes into account a customer’s entire lifetime value, including not just the initial purchase but also any future purchases and/or referrals they may make.
By understanding a customer’s CLV, businesses can make more informed decisions about how best to allocate their advertising budget and maximize their return on investment.
Customer Acquisition Costs (CAC)
Customer acquisition cost (CAC) is the amount of money a company spends to acquire a new customer. It’s important for companies to track CAC because it can help them determine the effectiveness of their OTT campaigns. If CAC is too high, it may be difficult for a company to turn a profit.
Generally, it includes your sales and marketing costs divided by the number of customers acquired. When it comes to customer acquisition cost (CAC), there are a few things to keep in mind. First, it’s important to make sure that your CAC is lower than your Customer Lifetime Value (CLV). This ensures that you’re making a profit on each customer you acquire.
Second, you need to be sure that you’re targeting the right people with your advertising campaign. If your CAC is too high, you may be targeting the wrong audience or spending too much money on advertising. Finally, it’s important to track your CAC so that you can see how well your advertising campaigns are performing. This will help you to adjust your campaigns as needed in order to keep your CAC as low as possible.
This measurement relates to how often viewers interact with your ad. If this metric comes back high, that means that users find your ad highly relevant and valuable to their needs.
Similarly, if your engagement rate is low, that may mean that you need to readress your creative or that you are targeting the wrong audience and your overall strategic targeting amey need to be revamped.
The best way to increase your engagement rate is to connect the needs of your target audience with the features and benefits of your product or service. Once that connection is established, you can better produce compelling creative that resonates with your audience.
How You Should Measure These Metrics
Once you have this data, how should you compare the results to ensure that you are running your campaigns effectively? Essentially, there are two primary ways to test your data.
Audience Split Tests
Remember in science class when you would test something by having a control and a test subject? This is very similar. In audience split testing, the test group receives the ad while the control group receives something called a “ghost ad”. The Ghost Ad can be something innocuous like a Public Service Announcement and is merely meant to identify the target audience without delivering the ad.
This test is meant to measure the effectiveness of the piece of creative over a specified time with the same designated group of people. This will truly allow you to gauge the effectiveness of your creative with the same audience. You can even get super granular and separate out your audience by specific neighborhoods and regions of a neighborhood or metro district.
Geo Matched Tests
Audience split tests are great when you have a wide pool of available folks that meet a pre-arranged and approved set of criteria. However, what do you do when you don’t have that criteria or group available?
Enter Geo-matching. Geo-matching allows you to test based on selected markets and then determine if your creative works based on location.
For instance, let’s say that your market is the mid-west. You can target Chicago and run your ghost campaign and selected creative for a 30-day trial run. Following the trial you can then measure all of your metrics and see how everything stacks up against your goals.
OTT Advertising has completely brought video and broadcast advertising into the 21st century. Advertisers now have the ability to apply granular metrics and attribution measurement to mediums and audiences that traditionally have gone overlooked.
As more and more streaming platforms integrate advertising capabilities and more consumers cut the cord, brands and marketers will find more opportunities to reach them via OTT channels.
By defining an audience, crafting engaging creative, and strategically applying a message, marketers have the ability to fine-tune their campaigns in real-time to ensure that everything hits their mark as planned.
Need help from video production experts in designing your next OTT advertisement? As an official Amazon partner who has created video assets for thousands of brands, Lemonlight’s got you covered.