Ryan Riggin, Chief Product Officer at Answer Media, sits down for drinks with colleagues Matt Brummett, Chief Revenue Officer; Danielle Bourassa, VP of Partnerships; and Eric Keith, President of SPACEMOB studio.
Today’s discussion was all things CTV and OTT–what that is and what it means for your brand. Watch the video below, or read the summary below. Then, let us know your thoughts!
What is CTV OTT?
CTV, or Connected TV, is more specifically the devices, like a Roku device, an Apple TV device, the PlayStation, an Xbox, Amazon Fire TV, the dongles. Then OTT is technically the media that people are consuming on there. Subscriptions to Hulu, Netflix, Pluto TV, Tubi TV, HBO Go or HBO Now, all of those would fit this space. It’s one of the largest mediums right now that people are consuming, especially during these times.
This space is growing fast. We’ve read different projections for how big this space is and how fast it’s growing, but some of the stats we see show 2023 as a $50-billion dollar business. It’s growing rapidly, with something like 70% of households having access to streaming. So all of the TV dollars and TV ad spend eventually is going to be here.
What are the Biggest Questions and/or Challenges from Brands and/or Publishers
Regarding web publishers and/or brands that we work with, what are their biggest questions or challenges surround CTV? Or what were they asking you about how they can leverage this space or break into it?
I think the biggest thing with publishers is they don’t necessarily know where to start. I think historically, they know their web audiences very well. They’ve invested a lot in written content and targeting them that way. So they look at it like, maybe some of them have video content, maybe some of them don’t. Maybe some of them have video content that was created for a web, it might be shorter form. So can their current content be converted to TV quality content? Or maybe do they need to really organize a whole internal production team in studio to develop content that would work for their audience? I think that’s a big place where there’s a lot of question up front. “Well, we’re just not set up for that.” I think beyond that, it goes into the technology, what does it cost to invest in it up front? Who would do it? Would they do it internally? Would they use a current product out there in the market? Maybe they’d outsource somebody to build something for them. Just a lot of questions around everything. The supporting of it, the cost behind it, and really how to drive their audience to a new medium.
What Platforms do I use?
For example, if I’ve got a website with a bunch of traffic about sports, but I want to convert that audience to video, then I’ve got to ask myself all these questions like, “Do I need to build an app for Roku? Do I need to build an app for Amazon Fire? Android and all those things are different, so how do I navigate that conversation?”
The technology behind it is one thing, but creating the content is another thing. Do you go to Roku and just create a channel and upload some video content and that’s it? There are a lot more moving pieces than people realize. Example, hosting videos. There is a process for uploading the videos to Roku, and with the titles of the videos, descriptions of the videos, plus you have to have meta tags, you have to have images, you have to have not only one image, but you have to have several sizes of images so that the channels can be displayed appropriately on Roku. So there’s a lot of different moving pieces and people just don’t know where to start.
I’ve Decided on my Platform, but Now, What Content?
Let’s say I want to make an app for Roku, which is the biggest player. You’ve got Roku, Amazon, Apple, Android and then this Xbox and PlayStation. If I want to make an app for Roku, I have to go to Roku, I’ve got to download an STK, I’ve got to hire a software developer, I’ve got to build all that out, maintain it, post the files. It can be really challenging. Then once you get it set up, then the big million-dollar question is, “Okay, what content?”
SPACEMOB studio has done films, short films, ad creatives, and every kind of video that you can think of. What’s the biggest challenge you find when you’re talking to a creator, like maybe somebody that’s got a YouTube channel, and they want to get into this space? What questions are you hearing?
I think a lot of people just don’t know how to enter this space. I think the biggest question is, “My stuff is on YouTube, I’m getting a decent amount of followers, where else can I take it?” A lot of them haven’t even thought about moving over to this Roku OTT type experience. So that’s where we’ve seen the opportunity, like you mentioned, we are content creators as Answer Media and as SPACEMOB studio, we’ve done feature films, we’ve had stuff on Netflix, on Amazon Prime, on all the different streaming channels. We’ve created television commercials, all types of content that can be done. So when we’re talking to content creators, we’re opening their eyes and saying, “Hey, your content is of value and we can work with you to help syndicate that content out through our Answer Media network.”
So to answer your question, I think the biggest question is, “What is the opportunity?” How much money could they potentially make, and we are we in some way going to disturb what they’re currently doing on YouTube? If they’ve got a successful YouTube channel, are we going to somehow pirate that opportunity? The answer that I always give is, with the CPMs being north of $14 on their content on OTT channels, you’re not going to come close to that on YouTube. So of course, you would like, you would rather have the traffic on OTT than you would on YouTube.
CPMs in Connected TV are Higher
That leads into another topic I wanted to get into, you mentioned CPM, so as a content creator, I’ve got two ways to make money. I can either monetize that content with ads or I can charge subscriptions. So the CPMs in the connected TV space are higher. Can you talk a little bit about that and what that means for people that are creating content in this space and how they should be thinking about moving their content from the web to CTV?
Ad CPMs typically range between $15 to $30, but obviously you can get higher than that on more specific ad buys. Generally, as an effective CPM that someone should see, that range is pretty accurate. It’s a big range, but that means there’s a lot of opportunity there to capture revenue for yourself. Really, it’s about how many people can I get coming back to my channel, how can I activate my existing audience? How can I take my people who are on YouTube, maybe watching my content on their phone or while they’re waiting in line at the doctor’s office or whatever, how do I activate them and get them to come to my channels at night when they’re sitting on their couch? Maybe they don’t want to watch YouTube, they want a more traditional TV experience. How do I activate my audience and get them there?
Because the CPMs definitely support the opportunity, and so really that’s the question that we like to pose to our customers who want to create their own channels or have questions about it. Can you activate your audience, because at the end of the day, that’s what it’s about. If you have a website or a YouTube channel or whatever, if you’re able to effectively do that, then you’re going to have a lot of success in this OTT space.
How Can I Repurpose Existing Content?
So what about the creator, like the YouTube creator or say I’m a comedian and I have a YouTube channel, and I have a bunch of 10-to-12-minute clips on YouTube, a bunch of subscribers on YouTube, and I don’t necessarily need my own channel on Roku or Amazon Fire. It might be a bigger leap for me to build a channel, and to go and try to get people to download and install that channel on Roku. But what I could do is package my content differently and then distribute it to other CTV channel owners. Can you talk a little bit about that, and some of the projects that you guys have done in and around that?
Comedians are one group, and short film makers would be a group, and then filmmakers in general would be another group, sketch comedy troupes. No matter what kind of content you have, if you’ve put together a nice batch of content, let’s say you have 20 episodes or something, or 10 episodes or something, or whatever that number is, syndicating it out across the OTT network with Answer Media or with any group is just additional revenue that you can make off of your content. So we talked to a group recently that had a really successful YouTube series, and they were getting ready to launch their third season of the YouTube series, and we thought syndicating the first two seasons might be a great way to promote the third season.
One of the problems that we’re addressing by syndicating content across OTT is not only generating revenue for our partners, but also generating reach and publicity. Think of how many, we talked to a group that has a YouTube page last night, and think of how many people when they put their hours and hours of content out through our network, how many more people will be exposed to their content.
How Should a Brand or Agency Look at CTV Opportunities Differently?
I’ve been running an agency for the last five or six years, and before that was running my own brand. I think about, for the brand that I was running, would it have made sense for us to make a CTV channel? Probably not so much. But packaging content around what we were doing and syndicating it onto relevant CTV channels could have been really interesting.
So as an agency owner, we work with a lot of primarily B-to-B brands, whose businesses revolve around a sales organization, or B-to-C eCommerce companies, and also B-to-B eCommerce companies. But both of those niches, the opportunity to create content and build your brand and tell your story is really interesting. I wonder if you can talk about that angle a little bit, and maybe how a brand would think about CTV differently than a content publisher like a newspaper or a blog or something along those lines.
I saw a stat recently, and sadly I don’t have the source, but I heard that there’s basically only around 200 brands that have their own CTV channels, despite the fact that 70% of the households are using streaming devises. So any brand that’s doing it now is an early adopter. They’re having to come up with creative ways to engage their audience through essentially television programming. It’s not, short form doesn’t seem to work very well unless it’s packaged specifically for the OTT audience. But we’ve talked about dozens of brands, Ryan, around the office.
But you can come up with clever ways to engage your audience by creating original television programming, whether it’s a narrative style show, a game show, man on the street interviews, or going to an event. Well, nobody’s going to any events right now, but go to an event and go interview people in the parking lot or whatever. There’s a million ideas and obviously we’d be happy to pitch any brand 20 ideas tomorrow, if the opportunity arose. But I think connecting with your audience in a different way, CTV is a different opportunity to connect with your users.
Not only connect, but engage them in a way that makes them keep coming back to you. Because if you’re talking about a brand, the golden, the Holy Grail is loyalty. You want them to keep coming back. So rather than showing them ads that they might remember when they go to the grocery store or something, or when they’re looking for something to do, they might remember your brand, and they might never come back again or never purchase that product again. But if you’re doing what Eric is talking about actually viewing yourself as a media company that engages an audience with the purpose of having them come back, they show you loyalty that way, I think that opens up a lot of opportunities for brands to engage their audiences a much different way, and potentially a stronger way than just showing them advertisements.
Teach, Don’t Sell
I think two great points you made there, the first is that every brand should be thinking like a media company. The barrier to create content and get it distributed now is way, way different than it was 20 years ago. It used to be, to get content on television was like a way bigger production that it is now.
The other thing that I thought was interesting about what you said is the brands should think about CTV differently than a content creator, because it really all comes down to the marketing goal. What are you trying to get to happen? They always think about, you guys have heard me talk about this at the office, the Startup Metrics for Pirates, the acquisition, activation, retention, revenue, referral.
Where in that funnel is your content designed to work? Are you trying to build top of funnel content to educate your audience about a problem that your product solves? Or are you trying to monetize your content with subscriptions? This is a hypothesis, but I feel most of eCommerce brands and B-to-B brands have a big, big opportunity with CTV and syndicating their content into that world. Create top of funnel awareness content, but not get too hung up on “Is this content driving conversions?”. I think the event that you want to optimize for when you’re looking at CTV syndication, or even CTV media buys, which is a whole different bag, but you are looking at activation.
Can you build an audience, convince your audience that you know what you’re talking about around whatever your service is? Say I’m a health club, then creating content all around exercising and healthy living and eating, and diet and exercise and all that kind of stuff is exactly what I would be doing if I owned a health studio. But at the end of the day, the top of funnel awareness content, huge opportunity there.
To take the health club instance, rather than just be a place where people go workout, is you’re becoming a resource for your customers to come, to get advice, to get direction on things that are going to help them when they come into the gym and workout. So, it’s engaging your audience on a whole other level, that typical advertising doesn’t allow you to do.
You’re establishing an emotional connection. There’s a sense of loyalty there, there’s a relationship, there’s community. So that allows a brand I think to do more of that than just the typical selling aspect. They’re creating branded content for all these partners, and really this is about them creating content around who they are as a brand.
It’s like teach, don’t sell, is the mentality that I like to subscribe to. Like don’t sell to your audience, teach them and they’ll come back and buy.
The Facebook Effect
You mentioned only around 200 brands are using CTV. I’d love to dig into that a little bit. You guys probably have all heard of Gary Vaynerchuk. He talks a lot about how if you had the opportunity to dive into Facebook as a creator or an advertiser in 2010, would you do it? Yes or no?
Obviously, the answer is yes. This is where it’s going and right now’s the opportunity. Everybody who thought Facebook was not going to be a thing 10 years ago is now paying $15 CPMs to advertise there, when 10 years ago, you could advertise there for $1 CMP. So the content creation and getting into this ecosystem now, even if you think your brand might not be ready, I would highly encourage experimentation and finding a small little niche of your brand that you can create or tell a story on CTV and see what happens.
Good Content is Emotional
I think the content of it, the content aspect to me is the most important. Because if it’s not good, people aren’t going to watch it. People aren’t going to engage with it. If you’re a business owner, or let’s say you’re the chief marketing officer of a brand, or the editorial director of a publisher, it’s not just about putting a phone in front of your face and talking and making content. It’s really telling a story of what it’s about. I think that’s one of the things SPACEMOB studio is so good at—because they’re been doing it for years with movies and stuff—is telling a story. That’s how you captivate an audience.
It’s connecting with them on an emotional level, and I think that requires really good content to do that. We can talk about monetization and distribution and all that stuff, but at the end of the day, if you’re not connecting with your audience at an emotional level, if you’re a publisher or a brand, then you’re not going to have success. Content is the key.
But More Importantly, Get Started
That’s an interesting point, but also, it’s a fine line. The line between how good does my content have to be between should I just get started, is a really, really thin one. I agree with you 100%: the content’s got to be good, or nobody’s going to watch it. But the flip side of that is as an agency owner, for the last six years, I’ve listened to a lot of brands, and I’ve seen a couple brands really do some interesting content—get into it, get good and start, then get better as they go.
But I’ve also seen a few brands, overthink it or think it’s got to be perfect out of the gate. They overproduce it. So I definitely think there’s a fine line there. It will be interesting to see how that plays out, but I definitely think that the content for CTV and OTT has got to be well produced. I think that’s what Eric and his team bring to the table. I would encourage anybody that’s thinking about creating content, not to throw in kind of a shameless plug here, but you can create raw content and just do it on the fly, and then send it off to a rock star producer and have them make it into beautifully produced episodic storytelling content.
Regardless, you’ve just got to get started if you want to get in this game.
In Closing: Barriers to getting Started in CTV are Low.
The barrier to entry is actually pretty low. You don’t have to spend a ton of money to make great content, you just have to have a good angle and a good story. It’s all about storytelling. It can be a podcast, it can be something as simple as what we’re doing. Not that this is riveting television, but if you have the right topic for your brand, you can do it. The second point is you don’t have to have your own OTT channels in order to produce that content.
So if you’re a brand or you’re a publisher and you want to get into this world, you may have content, you may not, but you can create content or take existing content and put it through a syndication play like we’re offering. Again, not to hit the shameless plug, but through Answer Media you can distribute your content.
Going back to just publishers, where you’re questioning if you have the content, if you can get into it, where like I said before, they know their audience, they have so much written content, they essentially have scripts. They know what their audience is really receptive to. They know what they love to hear about. So they can take that written content and that is the basis for what they can be developing. They can start writing stuff with that and see how receptive their audience is to it. I think it’s important to know that even though they may not have solid video content, they have everything they need to get started.