- A growing number of ad-tech companies are moving into over-the-top advertising as ad dollars shift from TV to streaming video.
- While ad-tech companies are clamoring to get a share of the OTT ad market that’s coming from the $70 billion in TV advertising, not all ad-tech companies will actually be able to deliver.
- Business Insider polled a handful of ad buyers and compiled a list of 13 ad-tech companies that are at the forefront of shaping the future of OTT advertising.
More people are cutting the cord and advertisers clamoring to use data to target and measure video campaigns, but the $70 billion TV advertising industry has operated the same way it has for decades.
Ad-tech firms say that it’s ripe for disruption, and a cottage industry of companies has sprung up to grab a piece of the revenue flowing to OTT advertising.
They’re responding with everything from software firms that help brands analyze which programs they should advertise in to programmatic players that help publishers make money from OTT apps.
Like the sprawling number of ad-tech companies that rose to power ads on publishers’ websites and mobile apps earlier, the rise in OTT ad tech companies specializing in OTT is one more challenge for marketers to navigate.
Read more: Ad-tech companies and networks are pinning hopes on streaming TV, but OTT is full of headaches for marketers
“If you had a Lumascape around OTT, it’s endless in terms of the number of partners who have access to the inventory and the ad-tech that sits behind it,” said Mike Law, executive vice president and managing director of US media investment at Dentsu Aegis Network.
One of ad buyers’ biggest frustrations is that each ad-tech firm controls a small amount of the OTT ecosystem, making it hard to find the same scale of TV in OTT apps.
“We’re very bullish on OTT overall, and we’re looking for a couple of other additional scaled players to come to the market to be able to continue to move dollars in that direction,” said David Cohen, president of North America at Magna Global. “One of the challenges with OTT is that it doesn’t exist in a vacuum — you want to understand the trade-offs in moving from OTT to YouTube and Facebook. Trying to get someone that can create an apples-to-apples comparison is important.”
Agencies often end up using multiple companies to tackle the same problem. For example, an agency may work with two or three tech firms to measure the impact of their ad spending because each firm’s capabilities are different.
“The reality is that across all of these partners, it’s a little bit of a patchwork quilt,” said Lisa Giacosa, EVP and global managing director, head of data technology, analytics and insights at Spark Foundry.
Picking the top OTT ad-tech players
Business Insider talked to a handful of ad buyers to figure out which ad-tech companies are furthest ahead with OTT. We also talked to the companies themselves and looked at factors including their clients, reputation, and how much of their business is related to OTT.
It’s a sign of OTT’s infancy that several companies on this list work with both publishers and advertisers, which is unlike online advertising. The same company that helps publishers monetize their content might also find an advertiser to fill the ad space. That’s because publishers and advertisers are still figuring out OTT, and the rules are still taking shape.
Roku and Hulu are known as platforms for distributing content but are on the list because they’ve each built their own ad-tech tools and stacks specifically for OTT.
There are also a few notable companies that we didn’t include. Despite their massive clout in linear TV, Nielsen and Comscore are not on this list because digital measurement companies can gauge viewership at a more granular level than Nielsen and Comscore can, said an agency source.
Also missing is AT&T’s advertising and analytics firm Xandr, which has bold ambitions to change TV and digital advertising but is too new to be considered a formidable player.
Below are the 13 ad-tech companies that stand to win the most in OTT, listed alphabetically.
Data Plus Math: Wants TV measurement to work like Facebook
Marketers love to talk about how well Facebook and Google ads perform, but Data Plus Math thinks TV deserves more credit.
The 3-year-old firm helps advertisers track attribution, a measurement of real-world stats like how many people visit a website or go to a store after seeing an ad. Networks like ABC Disney and NBCUniversal have been pushing advertisers to buy more data-driven campaigns and use Data Plus Math to prove that OTT and linear TV ads are effective for more than brand building. The firm also works with advertisers with a similar pitch.
Here’s how it works: Data Plus Math pulls data from smart TVs, set-top boxes, and OTT apps. Advertisers then tag ads and websites that track people who visited a website after seeing the advertiser’s video ad. The firm also works with location-based ad-tech companies to tell if someone visited a store or location after seeing an ad.
In theory, the method can prove the TV industry’s long-held claim that commercials cause consumers to buy products.
“The sellers of TV are under-credited and undervalued because they’re only measuring audience delivery, not outcomes,” said John Hoctor, co-founder and CEO of Data Plus Math. “Attribution is being brought up in the beginning of buys, so there will be networks who are aggressively pushing it as part of their upfront conversations.”
FreeWheel: Wants to build a marketplace for OTT
Media giant Comcast is betting big on OTT, and it’s doing that with FreeWheel.
There are three arms to FreeWheel’s business: Publishers, advertisers and data.
FreeWheel’s ad server powers most of the publishers’ OTT apps that don’t work with Google, including Dish’s Sling TV. It also provides tools for publishers to manage advertising deals, pricing and the ability to swap out creative in real-time using a technique called dynamic ad insertion.
FreeWheel historically worked with publishers publishers but is making inroads with advertisers, too. It recently formed a unit called FreeWheel Media that helps marketers plan, buy, and measure cross-screen commercials.
Through a deal with smart TV manufacturer Vizio’s analytics arm Inscape, advertisers can use viewing data from 10 million smart TVs to create ad-targeting audiences. Freewheel also works with 20 measurement firms including Data Plus Math to analyze attribution and measurement for advertisers.
“We’re trying to solve fragmentation that hits a bunch of dimensions [such as] measurement and attribution so that advertisers can get scale,” said Neil Smith, general manager of FreeWheel Markets.
Comcast is looking to acquire ad-tech companies DataXu and Cadent that would beef up its offerings for advertisers, AdExchanger reported. DataXu and Cadent have platforms for brands to buy targeted TV and OTT ads. FreeWheel declined to comment on possible acquisitions.
Google: Wants to dominate ad serving
Along with Comcast’s FreeWheel, Google is the other main option for serving ads in streaming TV apps. Google is focused on becoming publishers’ ad server of choice through Google Ad Manager, its technology that in part manages ads for more than 30 publishers including AMC, A&E Networks and CBS’ All Access.
According to Google, it doubled the number of ad impressions it served to connected TVs through Google Ad Manager in 2018 from the prior year.
Google got a big credibility boost in November when Disney ditched FreeWheel and moved all of its business, including ABC, ESPN, Marvel and Star Wars, to Google Ad Manager.
Expect Google to do more deals with networks as buyers ask for data to connect separate ad buys.
“One of the things that’s clouding the space a little bit is you buy inventory from lots of different partners,” said Dentsu Aegis Network’s Law. “It’s very difficult to manage the frequency of that within a platform. You might have three different buys in a show, but all the consumer sees is one set of ads.”
See the rest of the story at Business Insider