Coronavirus Boosts OTT Viewership and Opens New TV Ad Opportunities

An unexpected side effect of the coronavirus has been discovered: increased TV viewing. Forty-nine percent of American kids are spending at least eight hours a day in front of screens, up from just 8% before the pandemic, according to a study by Parents Together. Among the top platforms were Netflix, YouTube, and TikTok.

To be sure, kids are not the only ones spending more time staring at the TV screen. The coronavirus has catalyzed a golden age for TV viewership and non-traditional formats such as over-the-top viewing in particular, said Sean Buckley, COO of global video advertising platform SpotX.

SpotX announced a strategic investment in CTV and OTT-focused ad serving platform SpringServe Monday. I checked in with Buckley to find out how the partnership will benefit both companies and how the coronavirus year has affected TV viewership as well as video advertising.

SpotX announced a strategic investment in SpringServe Monday. How does the move benefit both companies?

We will be collaborating on a number of new features that will be both highly valuable and unique to the market. By investing in SpringServe, we are able to enhance our offering to clients by pairing robust ad serving capabilities with best-in-class programmatic tools that will help media owners manage ad delivery in a more comprehensive way. A holistic solution will give SpotX, SpringServe, and our joint customers complete awareness of the supply and demand landscape to facilitate an improved viewer experience as well as better yield optimization across traditional direct sales and programmatic demand.

Moreover, the combination of SpotX, SpringServe, and YoSpace technology (a company we acquired last year) allows us to offer best-in-breed solutions across the three key pillars of over-the-top (OTT) advertising technology: server-side ad insertion, ad serving, and programmatic capabilities, a full stack solution for media owners.

What are some of the major challenges your clients are facing? What are the major challenges in the video ad ecosystem as a whole?

Podded ad delivery can be quite complex. Executing advanced podding with a mixture of traditional direct sales and programmatic demand only adds to that complexity. We want to ensure that all slots within a pod are monetized and that we can honor competitive separation requirements and manage frequency (i.e. no duplicate ads in the same pod), all while maximizing yield. Ensuring a seamless, broadcast-quality viewing experience for viewers is a key area of focus for us.

There are several other aspects of OTT that we are focused on solving for, including the management of inventory sharing between programmers and distributors as well as effective forecasting.

How would you say video advertising has been affected by the pandemic and resulting recession? What does the outlook for the rest of the year look like?

We recently published a report called “CTV is for Everyone” that includes viewership data and audience insights. Our research indicates that connected TV viewership has achieved critical mass, with 70 million American households now consuming content via CTV. Of those, 48.9 million are streaming only versus pay TV.

The pandemic has led to an accelerated increase in OTT viewership which, in turn, has caused ad inventory to grow by over 80% compared to early March. While the volume of inventory has increased, advertisers are still adjusting their strategies on how to allocate their media investments. This scenario provides a huge opportunity to advertisers who want to reach and target specific audiences.

At the same time, viewership growth through smart TVs is notably outpacing the growth in viewing via auxiliary hardware (boxes and sticks). We believe this stat shows that smart TV manufacturers’ efforts with consumers and advertisers are starting to pay off. The battle for the consumer access point and advertiser dollars is far from over, and is changing rapidly during the rapid shift to OTT during the pandemic.

Correction: A previous version of this article stated that SpotX had acquired SpringServe. In fact, SpotX invested in SpringServe.

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Joe Zappa is the Managing Editor of Street Fight. He joined Street Fight as a contributing writer in 2015, has compiled the daily newsletter since 2016, and has spearheaded the newsroom's editorial operations since 2018. Shoot him an email at jzappa@streetfightmag.com.