The Business Case for Hybrid TV and AI


Oliver Botti TV-Bay Magazine
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Video on demand (VOD) and OTT live services have come a long way since their introduction and, rather than solely competing with traditional broadcasting, they are becoming more important than ever in helping to keep broadcast TV networks popular, in particular when combining TV broadcasting with online TV into Hybrid TV models, thanks to convergence standards such as HbbTV and Atsc3.0. In the UK, the average weekly OTT viewing minutes shot up from 60 in July 2015 to 152 in September 2018. Meanwhile, OTT TV and video revenues are expected to reach $6.8 billion by 2023 in the UK and $61 billion in the US.

OTT and Hybrid TV provides so much scope for advertisers to better understand the viewer and subsequently tailor content and adverts to best respond to their needs. This article aims to look at how broadcasters can develop next gen OTT platforms to adapt the way they distribute their content to today’s viewers.

With a huge £115 million worth of advertising viewed on OTT platforms during 2017, savvy broadcasters will be looking to further maximise not only viewer time, but advertising share by keeping viewers on their channels and working with advertisers and sales houses to ensure viewers receive relevant and attractive ads that correspond to their personal profiles and tastes. Interactive and addressable TV, combining broadcasted linear TV with OTT, is a key area of evolution and of differentiation among broadcasters and pure online FAANG players. When advertisers look at how to adapt their offering to meet these demands, it is clear that a new wealth of industry potential can be tapped into.

With investments pouring into the OTT industry and advertising revenues in particular reaching over 50 billion in 2018, it is no surprise that as more OTT options and channels become available, and capabilities and measurement improve, investments are going to increase. One of the big developments which is emerging in OTT advertising is the application of Artificial Intelligence (AI) and Machine Learning (ML). The obvious benefit is that massive quantities of data can be sifted through in order to find signals of ‘intent to buy’ from consumers. But machine learning is also forcing broadcasters to measure up their existing OTT systems against their ability to effectively engage and monetize their audience, leveraging the following five components of AI-powered/machine learning advertising models:

  • AUGMENTED OVERLAY: allows for display tags or augmented video and/or product related information to be displayed as interactive overlays, providing an augmented user experience and enabling new TV formats.
  • BRAND MONITORING: means being able to automatically detect and monitor brands presence not only within explicit ads, but on full programming, and to crosslink this information with external big data sources.
  • CONTEXTUAL ADVERTISING: based on automatic video context recognition, it consists of display advertising which is related to the context of the content (e.g. if a movie scene is within an airport, a British Airways advert would be preferred to a Coca Cola one).
  • SHOPPABLE CONTENT: in a Click&Buy approach, products appearing on the video can be clicked and linked to e.g. an e-commerce catalogue, which can be navigated both on the main screen or on a companion device, contextually with the video viewing or shifted through the access to a personal “wish list”.
  • SMART WATCHING: specific content personalization can be obtained by providing the user with markers to the exact content which they are looking for. Also they will automatically select a personal content perspective, e.g. thanks to multicamera, a Ferrari fan can receive via broadband a “Vettel-focused” F1GP, while a Mclaren fan can receive a “Ricciardo-focused“ one.

It is expected that artificial intelligence and machine learning will continue to impact TV advertising. AI makes prediction easier, it supports better decision-making and it has the capability to interact with every single consumer simultaneously while recording and analysing every minute detail of that interaction. Leveraging OTT and Hybrid TV advertising will not only help broadcasters and advertisers understand their viewers better and target their ads more appropriately but will simultaneously keep business booming.


Tags: iss142 | fincons | ott advertising | vod | ott | hybrid tv | augmented overlay | faang | Oliver Botti
Contributing Author Oliver Botti

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