Personalization is the key to unlocking a successful monetization strategy for OTT platforms. By leveraging user data and analytics, personalization can tailor your ads and upsell offers to meet the individual needs of your users, allowing for more meaningful engagement and improved user experience. 71% of consumers prefer ads that are tailored towards their personalized interests, not only does this build trust with the user, but it also gives the company a better understanding of what works and what doesn’t in terms of monetization. In this blog post, we’ll explore the power of personalization in monetization strategies and how it can help OTT platforms succeed.
Where can personalization enhance monetization strategies?
Personalization in OTT platforms refers to the practice of tailoring content, ads, upsell opportunities and retention offers to individual users based on their preferences, behaviors, and demographic information. Providing personalized experiences, including only showing adverts that are most appropriate for each of your users, will create positive encounters for the user; they’re highly more likely to engage with content and therefore, positively impact the ROI of advertising campaigns. Research suggests that channel switching drops by 48% when targeted ads are shown, compared to irrelevant ads.
More and more viewers are turning to free advertising supported TV (FAST), especially within the US, where in 2023, 57% of TV viewers are using FAST platforms such as Pluto and Tubi. The laid-back style of viewing provides audiences with online linear channels set to a schedule. This in itself gives revenue opportunities for content and service providers as they can monetize their content archive. As the popularity continues, the next natural step within FAST services is to provide personalization. However, there are a few challenges still to overcome to deliver hyper-personalized experiences, the opportunities are clear and there are still ways to provide these experiences; check out our resource below.
Why personalization is essential for monetization strategies?
Irrelevant ads can cause frustration, this can lead to users switching off or spending less time within a service, reducing revenues and increasing risk of churn. By understanding user preferences, behaviors, and other relevant information, companies can effectively target your ads and upsell offers, increasing the chances of conversions. A provider with monetization usually knows what their users are watching but not the reasoning behind their decision. Providing a deeper understanding of the interactions of the users and of the catalog, personalization is key to standing out and maximizing revenue in the OTT monetization landscape in an increasingly competitive market.
How can personalization improve user experience and build trust?
OTT monetization strategies that incorporate personalization have the potential to greatly enhance user experiences and build trust. However, it’s vital for the recommendations and personalization to be right and accurate. This helps the viewers feel in control, with enriched metadata, algorithms and deeper insights into what users really enjoy watching, without being too intrusive or creepy. Contributing to an increase in user satisfaction and engagement drives users back to services, which means that the revenue increases thanks to loyal subscribers or repeat TVOD purchases.
Personalization techniques for ad targeting and upselling
One effective personalization technique for ad targeting and upselling is leveraging user data and content intelligence to understand individual preferences and behaviors. This allows OTT platforms to deliver targeted ads that align with users’ interests, increasing the likelihood of engagement and conversions for advertisements. At XroadMedia, we can tie viewing interests to match IAB standard profiles, delivering ads to a larger targeted audience.
Additionally, dynamic ad insertion can help tailor ads based on real-time data, ensuring users see relevant and timely content. Another technique is offering personalized upsell offers based on users’ viewing habits and preferences, encouraging them to upgrade or consume content that isn’t available within their existing subscription. 89% of marketers see a positive ROI when using personalization in their campaigns. By implementing these personalization techniques, OTT platforms can optimize your monetization strategies and drive better results.
Challenges and considerations for implementing personalization
Implementing personalization in monetization strategies for OTT platforms is not without its challenges and considerations. One challenge is collecting and analyzing user data effectively and ethically. XroadMedia’s solution doesn’t collect any personal data, it’s all anonymized, so therefore, there are fewer concerns around privacy.
Another consideration is striking the right balance between personalization and user experience. While personalization can enhance the user experience, it is essential not to overdo it. Bombarding users with too many targeted ads or upsell offers can be overwhelming and lead to a negative user experience. Finding the right frequency and relevance of personalized content is key.
Additionally, implementing personalization can require ongoing monitoring and optimization, however this is automatically done in modern solutions, reducing the resources needed to make analysis and configurations. User preferences and behaviors may change over time, so it is necessary to continually analyze data and adapt strategies accordingly. It’s important to communicate the value and benefits of personalization to users. Some users may have concerns about their privacy or feel uncomfortable with targeted ads. OTT platforms need to transparently communicate what data is collected, how personalization improves their experience and how it provides options for users to control their data preferences.
Overall, implementing personalization in monetization strategies requires careful consideration of data management, user experience, ongoing monitoring, and effective communication between services and users.
Personalize Every Viewer Touchpoint
At XroadMedia, we believe in personalizing every viewer touchpoint. Personalization goes further than the UI, including enhancing your monetization strategies. Drive users forward by always making the right decision for all customers, depending on where they are in the lifecycle. Accurate content intelligence can power notifications, emails, campaigns, retention and upsell offers, that not only increases user engagement but revenues too. You can discover more about how we do this for our clients here.
If you have any specific questions for our personalization experts, get in touch!
