In 2023, we’ll see more advertisers recognise the value of OTT: Gavin Buxton, Magnite

Gavin Buxton, Managing Director, Asia, Magnite, was in India recently to launch a report by the company on OTT trends - ‘India Embraces The Streaming Era’. In a chat with e4m on the sidelines of the launch, Buxton shared his insights on the reasons behind the rising consumption of AVOD, the difference between India and other Asian markets, and the emerging OTT trends that could be the highlight of 2023.

Excerpts:

Your report suggests that OTT audiences have embraced ad-supported content although most of them have shifted from TV to OTT primarily because the latter was ad-free. Is this due to concerns over economic conditions or a behavioural change? 

Audiences are gravitating toward OTT for many reasons, one among them being that consumers enjoy the flexibility and control that streaming provides. According to our report, 66% of consumers prefer to watch streaming over traditional TV, and 75% of streamers are streaming more now than a year ago, with key reasons being greater access to original programming, favourite shows, higher quality content as well as the choice to watch locally produced or international content.

According to our report, 80% prefer to watch ad-supported content rather than pay for an ad-free experience and 73% of streamers are happy to see ads in return for quality programming.

Among streamers in India, the disposition to ad-supported streaming is strong, with free or some ad-supported content preferred by 4 in 5 streamers rather than paying for an ad-free experience (1 in 5).

There is also a clear acceptance of ads by viewers in exchange for quality content, with streamers happy to view up to 8.3 minutes of advertising per hour on paid platforms and 10.7 minutes on free streaming platforms.

As we move towards a more evolved ecosystem, what trends are you expecting in the digital advertising space in 2023? 

OTT adoption has grown rapidly throughout India, with AVOD in particular now actively watched by linear TV and UGC audiences across all demographics. With viewers drawn to its convenience and variety of premium content, OTT promises to continue its upward growth trajectory. In the coming year, I believe we’ll see more advertisers recognizing the value of OTT, and including it in their TV-based media plans as they look to most effectively reach the right audiences and achieve key marketing objectives.

In addition, as we see major global players roll out advertising solutions and/or ad-supported tiers in the coming year, I believe the AVOD model is the way forward and will be increasingly embraced by more content owners.

This shift will bring an increased supply/inventory to the market. The increase in demand for streaming inventory will push more supply out of walled gardens and into the open programmatic ecosystem.

We also expect to see the continued scaling of viewers consuming CTV ‘big screen’ content as more people replace their TVs with smart TVs or through new set-top boxes.

Live streaming will continue to increase as the audience will prefer watching shows that matter to them, and broadcasters will start to activate digital replacement of ads, which will further scale streaming ad opportunities.

How different is the Indian digital advertising space compared to other Asian markets such as China? 

The Indian digital advertising market is one of the fastest growing in the world and the second largest in Asia, due in part to a large middle class that is growing exponentially every year. Ad tech is well positioned for continued rapid growth here, with Magna Global predicting the ad industry will grow 15% by year’s end. Greater accessibility to increasingly affordable streaming devices and cost-effective home broadband plans will only accelerate this growth going forward. As consumers spend more time on OTT devices, ad dollars will continue to follow, further propelling the industry forward.

India is similar to other Asia markets in having a high proportion of viewers watching on their mobile phones, with 88% using their mobile to stream based on our research. The number and variety of streaming platforms for viewers to choose from in India is more than in other Asia markets, which is generally due to the size of the market and the breadth of languages spoken. 

There has been a massive shift from linear TV towards CTV. What opportunities does this disruption offer to advertisers? 

CTV offers greater opportunities to reach audiences. Viewers on streaming platforms are more engaged and more receptive to advertising than those on traditional TV, as evidenced by our latest research study.

Audiences gravitate toward CTV because of the high-quality programming, the lighter ad load, and the prospect of discovering new, exclusive content. This high engagement with the content results in more attentive viewing to both the programming and the advertising.

The full-screen, non-skippable environment of streaming (across mobile and big screen) inherently results in high viewability and high completion rates. It also helps advertisers extend reach, especially among audiences who watch little traditional TV and are difficult to reach and this enables customised creative opportunities.

Which category of brands dominates the CTV space?

Brands across all industries can benefit from advertising on CTV. With CTV, brands are not only buying based on content—they’re buying based on addressable audiences.

Powered by programmatic technology, buyers can reach audiences with precision, and one-to-one targeting across demographics. CTV technology goes beyond linear TV’s index-powered buying, leveraging audience, geographic, contextual, and behavioural data to drive campaign performance.

As audiences flock to streamers, buyers should be adding and ramping up CTV within their media mix. With media companies and advertisers seeing the benefit on bottom lines, they’re seeing CTV for what it truly is: high-performance television with holding power.

Ad waste and fraud are quite common in CTV due to multiple layers of streaming. What should an advertiser do? And what are you as a platform doing to bring measurement protocol? 

Because standards and thresholds vary for measurement vendors, our approach is to work with individual buyers to demonstrate how our inventory can meet their specific needs. This includes the creation of curated private marketplaces.

We enforce baseline content standards across all our publishers, ingesting and honouring the site blocklists advertisers pass to us through their buying platforms, and providing complete transparency on where their campaigns run. In this way, ultimate control rests in the advertiser’s hands.

With our long history and team committed to marketplace quality and brand safety, our exchange gives buyers the ability to transact confidently on high-quality, high-reach inventory.

What ad tech tools are currently being utilized by publishers to target the audience?

Streaming combines the best of linear and digital, offering marketers a high-quality, long-form television environment, plus the precision of digital media. Streaming marketers can reach curated audiences en masse by leveraging first and third-party data. Video streaming captures the holy grail of marketing: timely, personalized messaging to coveted consumers without compromising scale.

As the third-party cookie will soon be deprecated, audience creation is moving from the buy-side to the sell-side, which directly owns the relationship with consumers. Though this shift is new for many publishers, seller first-party data has long been key to addressability in CTV/OTT. While Magnite will continue to support industry IDs such as UID 2.0, a range of identity signals must be used to make as much inventory addressable as possible.

This year, we acquired Carbon, a company with unique tools and expertise to help publishers drive revenue with their first-party audience data, and Nth Party, a start-up developing cryptographic software for secure audience data sharing and analysis. This will help grow Magnite’s audience and identity capabilities and accelerate their integration across our omnichannel offerings. These acquisitions will accelerate our ability to bring audience creation tools and our audience marketplace to the world’s largest publishers and advertisers.