Personalized marketing messages are having a limited impact on consumers. Over 50% of marketers employing it report little to no effect at all on response rates. OTT video personalization similarly seems to be a work in progress.
According to a new study by VB Insight, 80% of marketers worldwide are now using email to deliver personalized messages. 42% said they used social media and 37% website home pages to deliver them. The most common method used to gather the data for the personalization is through monitoring activity through websites, search, social and communications (like email open rate and click through rate.)
Unfortunately, the effectiveness of the attempts to personalize messages seems to be limited. VB Insight reports that the best improvements in personalization are in email open rate, with 48% of marketers saying they saw 10% or better improvement. Getting people to stay longer at a site through personalization was one of the poorest performing categories, with just 36% of marketers saying they saw a 10% or more improvement in time on the site (so called dwell time.)
In the world of online video, dwell time is one of the most important parameters measured by the service operator. For ad supported sites, longer dwell times represent more ad revenue; for ad-free sites it corresponds to better subscriber retention. Unfortunately, for OTT video provider’s personalization seems to be having mixed results as well.
Of course, the most effective method of personalization is perhaps the simplest: autoplaying the next episode of a show at the completion of the previous one. In this case, the OTT operator knows the viewer likes the show they have just watched because it was viewed to completion. According to TiVo, three quarters of people have binge-viewed an entire season of a show, and most of those are using Netflix to do it. Clearly this personalization method is very effective at impacting dwell time.
Another common marketing method in OTT video is recommendations. However, the effectiveness of this technique is less clear. In 2009 Netflix offered a $1M prize to the company that could improve its recommendations 10%. However, by 2012 the company still hadn’t implemented the winning algorithm. Today, recommendations remain very much a work in progress. At a Churchill Club event earlier this year Neil Hunt, Chief Product Officer at Netflix, commented:
“The moment of truth is when someone sits down in front of the television. The research I have done suggests we have between 30 and 60 seconds, maybe 90, to capture your interests. One or two screens worth of possibilities, possibly 2 or 4 in depth <screens> and then you’re going to make a choice. That’s a hard problem to whittle down the thousands of possibilities into twenty choices that you can put on a screen that will capture your interest.”
VB Insight concluded their study with the comment that there is lots of room for growth in effectiveness and targeting of personalized marketing. Similarly, there is lots of room for improvement in using personalization in OTT video services.
Why it matters
Personalization of marketing messages to consumers is have mixed success it driving desired behaviors.
Similarly, personalization in OTT video services is having mixed results in improving one of the key desired behaviors: increased dwell time.
Techniques to encourage binge viewing are working well, while the effectiveness of recommendations are less clear.