Streaming TV has seen explosive growth and isn’t showing any signs of slowing down yet. As audience habits change and evolve, are advertisers and media platforms prepared to take full advantage of the new paradigm? In this blog post we’ll look at the future of streaming and how the new landscape will impact advertising.
The rise of streaming-first networks
One of the biggest trends in streaming TV is the rise of streaming-first networks. These networks, such as Netflix, Hulu, and Amazon Prime, often produce their own content and offer it exclusively on their streaming platforms. This model has proven to be successful, with many streaming-first networks producing critically acclaimed shows and movies that have gained a loyal following. At least 85% of US households are subscribed to at least one video streaming service.
The disruption of traditional TV
The popularity of streaming-first networks has disrupted the traditional TV model, which relies on ad-supported cable and satellite networks. As more people switch to streaming platforms, advertisers are having to adapt to the new landscape and find ways to reach their audiences through these platforms. Netflix, the world’s leading streaming service, for a long time publicly opposed advertising and relied on a subscription-only model. Yet in 2022, CEO Reed Hastings announced that the company was opening the door to advertising, signaling a tide change, citing the success of Hulu and others. Indeed, a survey by MAGNA found that in 2021, US linear TV ad spend is projected to decrease by 7.5%, while connected TV ad spend is projected to increase by 36.5%.
Self-serve advertising: a brand-safe way to reach specific audiences
Many streaming platforms, including Roku and Hulu, offer self-serve advertising options that allow brands to create and target their own ad campaigns. This gives advertisers more control over their campaigns and allows them to reach specific audiences in a brand-safe way. Self-serve is considered an effective compromise between the requirements of brand safety and scale; a system that is both automated and tightly controlled by the publisher.
First-party data: a valuable tool for targeted and personalized ad campaigns
Another trend in streaming TV is the use of first-party data. Streaming platforms collect data on their users, including what they watch, when they watch it, and on what device. This data can be used to create more targeted and personalized ad campaigns. For example, if a streaming platform knows that a particular user is a fan of action movies, it can serve them ads for action movies or related products. Self-serve advertising platforms are built on the availability of first-party audience data.
The importance of a strong relationship between viewers, streaming brands, and trusted advertisers
In addition to self-serve advertising and first-party data, it’s important for advertisers to consider the relationship between viewers, streaming brands, and trusted advertisers. As streaming platforms have become more popular, they have also become an important source of trust for many viewers. This means that advertisers who partner with trusted streaming brands and create ads that align with their values and aesthetics are more likely to be well-received by viewers.
For example, if a streaming platform has a reputation for producing high-quality, original content, advertisers who create ads that are similar in tone and style are more likely to be perceived as trustworthy and relevant by viewers. On the other hand, if an ad is perceived as intrusive or out of place, it may turn off viewers and damage the trust that the streaming platform has worked hard to build. One example of an advert being somewhat unpopular among viewers is the Charmin bear ad that ran on Hulu as a pause ad. In the words of one viewer: “Hulu puts ads on the pause screen so I couldn’t read the words. $6 a month so I can look at a bear wiping its butt.”
There’s a clear lesson – viewers will tolerate advertising (in exchange for more affordable streaming subscriptions) to the extent that the adverts are integrated into the streaming experience in a way that isn’t excessively disruptive or irritating.
Connecting the dots
In addition to these trends, another important factor for advertisers to consider is the growing importance of connected TV (CTV). CTV refers to televisions that are connected to the internet, allowing viewers to access streaming content directly on their TVs. 80% of US households have access to a connected TV. With CTV viewership on the rise, advertisers have the opportunity to reach audiences on a larger screen and create more immersive and engaging ad experiences. Advertisers can also use CTV to target specific households and individuals, based on first-party data and other targeting methods.
As the streaming TV and CTV landscape continues to evolve, advertisers must navigate new challenges, such as ad fraud. Ad fraud refers to the practice of generating false ad impressions or clicks to defraud advertisers. Advertisers can work with media platforms and ad tech partners to implement fraud prevention measures and ensure their ad spend is used effectively. Experts like Dr. Augustine Fou of Fou Analytics can help publishers assess the quality of their data and prevent ad fraud.
The landscape of streaming TV is rapidly evolving, and it’s important for advertisers to stay up-to-date on the latest trends and developments. By understanding the role of self-serve advertising, first-party data, and the relationship between viewers, streaming brands, and trusted advertisers, advertisers can create more effective and successful campaigns on streaming platforms.