It's official: ads in streaming are here to stay. In 2022, streaming platforms like Netflix, HBO, Peacock, and more began offering ad-supported streaming services at a lower cost than their traditional plans. At the same time, more marketers increased their spend on CTV and OTT ads. Ads in streaming have proved successful for both marketers and streaming platforms, and it looks like they're going to become a core part of digital marketing for the foreseeable future.
So, how did this all happen, and what does it mean for digital marketers? Will customers embrace this new frontier and help set marketers and brands up for success?
Read to find out how ads in streaming will change marketing in 2023 and how you can prepare.
Why Do We Have Ads on TV in the First Place?
TV ads have been around as long as TV itself. From the very earliest TV shows, companies and advertisers were ready to use the medium to their advantage. In fact, the new, visual medium for TV ads helped usher in the “golden age” of advertising.
TV advertising helped shape what we know about digital marketing and advertising today, and many ad campaigns still revolve around TV spots or TV-like commercials on social platforms, and advertisers held a considerable amount of power over the content and the people promoting it. This relationship persists in many spaces and comes into the spotlight when brands choose to end partnerships with figures who don't align with their values, for example.
However, HBO and other premium networks offered viewers the opportunity to watch ad-free with paid subscriptions, and as a result, gave brands much less power over their content. Because they weren't beholden to brands, channels like HBO were able to produce content that was not deemed appropriate for cable TV.
How Streaming Factors In
Today, most households get their TV primarily from streaming platforms like Netflix, and most customers have enjoyed years of ad-free TV. Streaming still offers customers more control, and more options, and is still preferred. The “cutting the cord” phenomenon isn’t going anywhere, just changing.
Customers will be asked to spend more, or deal with limited ads. Since content won’t be made exclusively for networks with commercials like it was in the past, it’s not likely that we’ll be seeing a re-emergence of TV shows that have dramatic beats and editing that aligns with commercial breaks (thankfully).
Customers will still control the amount of advertising that takes place in-stream. You’ll notice a timer playing during most ads that typically maxes out at around two minutes. Cable TV commercial breaks are typically 2-3 minutes as well but occur more frequently throughout a show or movie. Based on how consumers respond to these ads (and if more choose to upgrade to premium accounts to avoid them) we might see continued changes in how these ads are presented.
You may also have noticed that some ads repeat for the entirety of the commercial break. This is simply marketers and the platforms working out the kinks in these systems and trying to place ads in front of the right people.
Customers Are Cool With It
Overall, customers aren’t pushing back on ads in their streaming networks at this time. 57% of consumers say they'd prefer to watch with ads if it meant saving $4 or $5 a month.
And with 55% of consumers already using one free ad-supported streaming service, many of them citing cost saving as the motivating factor, marketers are well-positioned for success.
For the most part, consumers are old enough to recall a time when cable was the only or main option for TV viewing, and commercials were a part of that experience. We aren’t far enough into the commercial-free experience for it to be too late to turn back – and people are happy to sit through ads if it means they have an opportunity to save money in return and get the same quality content.
Opportunities for Marketers
Ads in streaming are an exciting new space for marketers. In the wake of privacy changes on platforms like Meta, ads in streaming offer a new opportunity for precision targeting that’s faster, more precise, and more up-to-date than ever.
Additionally, because CTV is dynamic, advertisers can make changes quickly rather than rolling out new ad campaigns. Based on the ad's performance, marketers can introduce changes, more ads, or even QR codes.
Early responses to ads in streaming are promising – these ads boost brand perception, and 23% of viewers “often” click on the ads to learn more, go to a brand’s website, or take another action.
CTV is definitely one of the most exciting new opportunities out there, and marketers can and should start looking into their own CTV offerings now.
Interested in learning more? Contact us to find out how we can help.
