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"Personalization" has become a buzzword in today's digital media landscape, frequently thrown around and sometimes overutilized. It is common to hear advice about how OTT services and other digital businesses need to adopt and implement personalized messages, designs, or features, under the assumption that all users want to be served uniquely tailored experiences. However, it's crucial to understand whether personalization is truly valued by customers, what specific aspects of personalization they care about, and how these preferences may vary.
Earlier this year, Accedo conducted a comprehensive research study surveying 2,000 video service users globally. The results we got shed some light on the topic of personalization in an OTT context. This blog post addresses common questions about personalization, debunks myths, and offers insights based on our research findings to help video streaming services better meet user expectations in an ever-so-competitive market.
We compared personalization with other elements users deem necessary for a top-rate streaming experience, and the research revealed that priorities are diverse. 27% of respondents from our survey think that the most important aspect of a video streaming service, apart from the content featured in its library, is that it is quick and easy to search. A comparable group (26%) place the highest importance on the video stream being of very high quality. Additionally, the ability to personalize a service’s interface and settings based on individual preferences got 22% of the votes.
It is clear that personalization is not the top priority for all users, but a significant portion of them still consider it an essential aspect of a good streaming experience. Video services should therefore adopt a balanced approach, focusing on nailing essential features while gradually integrating personalized elements based on user feedback. This way, they will avoid overwhelming users and can also make sure that investments in personalization aspects are prioritized based on what is truly bringing value to customers.
Personalization is a broad topic and can encompass everything from UI implementations and basic settings to the content presented in the service itself. Our survey explored user attitudes towards personalization as it relates to several key areas including content recommendations on the homepage and at the end of the video playback, advertisements for products and services, language and audio playback, general profile settings, and the look and feel of the service.
Understandably, a notable 62% of respondents consider the ability to personalize basic settings, such as language preferences, very important. Additionally, 50% value personalization of the overall look and feel of a service, emphasizing the importance of a tailored user interface.
Content recommendation is not deemed as crucial as the above features, but preferences vary across geographies. In South America (47%) and Asia (42%), users have higher expectations for personalized content recommendations than in Europe, North America, and ANZ, where only 17-28% rank it as being very important. Demographically, younger users, especially those aged 25-34 (48%), consider content personalization more important than older customers aged 45-54 (25%). Tailoring content personalization efforts towards specific audience segments, based on user data and sentiment analysis, can bring positive effects on engagement and satisfaction without the need for a full-scale rollout that encompasses your entire customer base.
Across many research studies on digital service users, the general consensus seems to be that consumers prefer personalized ads and are more likely to interact with those that are tailored to their interests. Nevertheless, within the realm of OTT, our research study paints a slightly different picture. When asked about the importance of personalized advertising in video streaming services, 50% of the respondents in our survey say that this is not a concern at all. In contrast, only 17% rate it as being very important. This doesn’t mean that users of OTT services have no concerns whatsoever about ad breaks interrupting their viewing experience. According to our survey, it is not the content in the ads themselves that seem to irritate people but rather the fact that the ads are too frequent or interrupting the main program at the wrong time.
This could mean that free AVOD services, or services with ad-supported subscription tiers, need to carefully reconsider ad placement and integration to avoid alienating users. AVOD business models can still be hugely successful as long as providers ensure that ads are non-intrusive - something which can be achieved by leveraging data to optimize placements and frequencies.
At the same time, it is worth noting that it may not always be entirely clear to the user of a video service if an ad has been personalized based on their presumed interests and preferences - the average customer will just know if something feels right or wrong. The fact that many of the respondents in our survey claim to not care about the relevance of ads could just be a sign of personalization done well. This shows the importance of staying one step ahead of the curve, leveraging data to predict what users want before they may even be aware of it themselves.
The collection of personal data for personalized content and ads is a contentious issue. Our research shows that 69% of respondents are okay with data collection for these purposes but also that there are notable regional and demographic variations. Acceptance is highest in South America, while users in Australia and New Zealand are the least willing to share personal data. Among age groups, younger users (74% of 18-24-year-olds) are more accepting of data collection than older users (54% of those over 54).
Streaming services should tailor their data collection practices to these variations, striving to be more transparent and possibly offering more control to users in regions where resistance is higher. Communicating the benefits of data collection, such as improved content recommendations, can increase acceptance, especially among older users who are more hesitant. Data-driven personalization strategies are an overall worthwhile investment for every video service, however, one of the first steps should be to carefully investigate your audience’s perceived level of acceptance towards data collection to devise the best approach to implement such strategies.
AI-driven personalization is a burgeoning field, yet user sentiment towards it is mixed. Globally, 39% of users are completely fine with AI-driven personalization, while 57% have some hesitations. Among those with hesitations, 25% understand how AI-driven personalization works but remain unconvinced, while 22% lack knowledge about AI processes.
Similar to the opinions towards data collection, comfort with AI-driven personalization is higher in South America (56%) and Asia (50%), with ANZ users showing the least comfort (20%). Older users express more hesitations about AI, and men (44%) are more comfortable with AI-driven personalization than women (33%).
When implementing AI technology to enhance OTT user experience, it's essential to ensure transparency and explainability to build user trust, akin to the approach needed for data collection. Robust privacy measures and data security are crucial, given AI's reliance on extensive data. Regular audits are necessary to prevent bias in AI algorithms. Offering user control over personalization settings can also balance personalized experiences with privacy concerns.
Personalization is a key factor in providing a stellar OTT user experience. Not every customer may be aware of it on a conscious level, but the relevance of everything from content recommendations and ads to the service settings and user interface plays a central role in whether a service is perceived as being of high quality. Video service providers need to adapt a data-driven approach to proactively anticipate preferences and behaviors in a bid to make the viewing experiences as intuitive, engaging and relevant as possible for different subsets of their audience.
As new technologies, such as the emergence of Generative AI, play an increasingly central role in the evolution of the video industry, there are plenty of opportunities to level up one’s personalization tactics. At the same time, the onus is on the providers of video services to determine where to focus their efforts in order to make sure that new personalized features and UI updates truly provide value to the end user.
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