Ian Wheal: It needs to become more targeted. But there are several obstacles holding OTT back from reaching its true advertising potential.    

Beyond its scale, OTT
is an Internet-based — connected TV, desktop and mobile — platform that offers access to rich data for one-to-one targeting. However, OTT’s targeting capabilities, on the supply side, have
been slow to develop. Making inventory available via programmatic means would amplify targeting opportunities, but only a tiny portion of OTT is currently sold programmatically. Hulu only launched its
programmatic solution late last year, for example. Most other content creators have had little incentive to embrace programmatic, opting to sell untargeted impressions at a high price.  

I think more OTT content suppliers will be forced to embrace programmatic as advertisers demand greater data-driven targeting. As programmatic OTT takes hold and standardizes, OTT ad spend will
grow.

RTD: How will the adoption of vertical video evolve?

Wheal: Snapchat absolutely exploded this year, threatening Facebook and YouTube with more than 10
billion daily video views. Its user base in the U.S. also grew by nearly 30%. That adoption, along with other platforms like Periscope, has conditioned consumers to accept vertical video at a scale
never seen before. This has forced the advertising industry to rethink everything about mobile video — from formats to content.

More publishers and platforms are now offering vertical video
support, and advertisers need to rethink how they approach content for video ads. Vertical video ads are more engaging — with up to nine times more completed views than horizontal video ads. But
having to ideate and develop new content with completely new aspect ratios across many channels — social, mobile, OTT, video-on-demand, the Web, and more — only drives up costs. As mobile video
spend increases in 2017, I expect a large chunk of those dollars to go toward vertical video.

RTD: What’s going on with programmatic TV?

Wheal:
Digital media is beginning to outpace traditional TV advertising because of the benefits it affords advertisers: easier transactions, more targeted, personalized campaigns, and better ad
measurement. But those same benefits can be enabled in the linear TV environment through programmatic technology.

Unfortunately, the industry has been slow to embrace programmatic TV. This
year, programmatic was only 1% of total U.S. TV ad spend. In 2018, it’s projected to hit 6%. I think programmatic adoption is mired by a lack of broadcaster buy-in. National networks have
withheld inventory from programmatic exchanges. They fear that programmatic will ultimately drag down pricing. But programmatic has very real pricing advantages. For instance, by pairing undervalued
and undersold inventory with granular audience data, broadcasters can sell at higher rates to advertisers.  

I think more national broadcasters will have to embrace the technology in
2017, to make it a viable long-term growth area. The hope is that those broadcasters who have already adopted programmatic will see the benefits across undervalued inventory, boosting interest across
the ecosystem.