Steve Jobs once said that in order to sell millions of products every year, you need to start with the customer experience and work your way backwards to the technology. This is certainly an interesting way of thinking overall and from an OTT perspective, it particularly supports the recent surge in interest for data-driven video solutions. The technology is already available to monitor every detail of the viewer’s journey, to process gigantic sets of data, to forecast churn and other behavioural changes.
The key challenge that remains is how to effectively use the data collected to improve the customer experience. For many companies, the use of data is not anchored in their overall business strategy; it is used to improve features and functionalities of the product but not to properly drive more holistic initiatives such as customer retention and advertising efforts.
There are a number of questions that need to be considered and answered in order to align your company’s use of data to the wider business strategy.
How good is your data?
It goes without saying that poor quality data (or data that has been collected in the wrong way), will be incredibly difficult to act upon. In order to deliver a data-driven video solution, you will have to start by establishing a solid foundation for how to capture and gather the right type of information about viewers. Without a solid data strategy in place, as well as a process for verifying the quality of data, you won’t be able to begin the route to delivering an outstanding user experience. Even the most sophisticated technology will fail if it’s not resting on the right type of information that has been captured and organized in a thought-through way.
The first step in this is to determine what kind of information is needed to best support your overall business strategy. For some OTT companies, the focus might be on user pattern data to enable optimization of the UX. For others, it might be about creating rich user profiles to support the delivery of a more personalized viewing experience.
How do you prove the business case for a data-driven strategy?
To truly benefit from a data-driven video strategy, companies are often required to make a significant investment. As with any decision of this kind, it is imperative to establish the Return on Investment (ROI) in order to build a convincing business case. This can be a challenge and the process will be different for each video service provider. Ultimately, the ROI is directly dependent on how and why the data is intended to be used; whether it is to increase engagement, reduce churn, or increase monetization from ads.
The key to ensuring that is being able to experiment and having all stakeholders aligned behind one objective, set of KPIs, and expectations on the outcome. Being able to quickly test new experiences, approaches, and content can be very valuable in guiding longer term directions. This is where data can play a central role. You can test new ideas on small segments of your user base and use the data to analyze what is (and isn’t) working. This allows you to focus, experiment, measure and take data driven business decisions on any investment you make.
What audience are you trying to reach?
When it comes to defining your audience, it is all too easy for video service providers to just assume that they already know who their users are. Instead, savvy companies know to look at the data they collect and work themselves backwards until they have managed to build out detailed audience profiles. Transactional data is key to establishing a user’s behavior and preferences, which is the foundation on which to deliver personalized content and offers. However, having a good understanding of your existing audience is also instrumental in reducing churn as well as for building strategies to attract similar users to your service.
Bear in mind that it might not always be your most profitable audience that should be the key focus for high value or personalized content. Many services are better off focusing their efforts on audiences most likely to churn, or users that are the most attractive to advertisers. Your strategy could also be about attracting a new audience to your service, such as a younger demographic.
Do you need real time data?
For any video service it is important to capture a certain amount of real time data. This is very valuable just after launch or after an update to gather instant feedback on user response. It is also important to monitor things like video quality and service performance on a constant and ongoing basis. In order to deliver a high quality experience for users, you need to immediately identify errors and weak points, and optimize the performance of your service accordingly.
However, real time data comes at a cost, so it is important to only use it when it will provide value. When it comes to longer term trend analysis, real time data is arguably less important. This is about seeing patterns in user behavior over a period of time and let this guide the direction of your overall business strategy. By carefully defining which data is actually needed in real time, you will be able to significantly improve the efficiency and impact of your data strategy,
Going forward, data will play an even bigger role in the video landscape. It will no longer be enough to treat it as an isolated activity that only affects the technology aspects of your service. Instead, a successful data strategy will have to be much more comprehensive and rooted in the overall business strategy and objectives.
We will be discussing this topic as part of IABM BAM Live on Thursday 2nd December. To find out how we can help you with your data-driven video strategy, please get in touch.
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