Intro to Advertising on TV Video Streaming Services

The last couple of years have been huge for streaming services, with companies like Apple, Warner Bros., AT&T, and even traditional networks like NBC joining streaming giants such as Netflix and Hulu to deliver OTT (over-the-top) content to viewers through the internet rather than cable.

Now that OTT is mainstream, what does this mean for advertisers? TV commercials have always been a cornerstone of advertising. Is advertising on streaming services different?

Luckily, the stats show that TV streaming advertising presents plenty of opportunities for advertisers. As experts writing for Forbes and Fast Company point out, cable providers have always depended on the dual revenue streams of subscription fees and advertisements. TV streaming advertising thus can still be a win-win for content providers and advertisers, both through traditional commercial formats and newer ad formats that will be discussed later in this blog.

Keep reading to learn about the current stats on TV streaming advertising, plus tips for how to get started advertising on streaming platforms.

Stats on TV Streaming Advertising

Statistics about streaming TV paint a pretty clear picture: more and more people are becoming “cord cutters,” or viewers who ditch traditional cable in favor of streaming services. While this isn’t the whole story, it underscores the fact that cord-cutting and streaming services are becoming the norm – and advertisers need to adapt.

Check out some of the most interesting facts about the state of TV streaming services:

    • Cord-cutters: Satellite and TV companies lost 6 million customers in 2019 (Variety), while Emarketer estimates that the number of American viewers who pay for traditional cable will decline from 86.5 million to 72.7 million between 2019 and 2023. (Emarketer)
    • “Cord-stacking”: Many viewers use streaming services and traditional cable simultaneously, meaning that advertisers can benefit from advertising on both platforms.
    • Ad volume: According to Pixalate, OTT and CTV (connected TV) ad volume in both the U.S. and worldwide increased by 330% in 2019. (Pixalate)
    • Ad revenue: Digital TV Research found that ad revenue from CTV campaigns will reach over $158 billion by 2024. (Digital TV Research)
    • Time spent viewing: Viewers are spending a ton of time viewing streamed content, as was evident with the 2016 Summer Olympic Games. Viewers spent twice as much time watching streamed Olympics coverage than they did the 2012 Summer Olympics and 2014 Winter Olympics combined. (Intertrust

According to Fast Company, a collective $70 billion gets spent on television advertising every year. That money “has to go somewhere,” they say. At the same time, experts across the industry acknowledge that viewers will go to a lot of trouble to avoid watching ads.

Streaming services are at the forefront of innovating solutions that allow advertisers to actually get their ads in front of viewers without detracting from the viewing experience. Many streaming platforms have already partnered with brands to experiment with new ad formats, such as:

  • Pause ads: As mentioned, these are interactive or static ads that show up when a viewer presses “pause.” Fast Company claims this is not necessarily the most effective ad format since most people typically are not looking at their screens when they’ve pressed pause.
  • Shoppable ads: As already seen in some broadcast commercials, shoppable ads include scannable QR codes that lead viewers directly to a shoppable page. This ad format is very promising for OTT content viewed on phones and tablets.
  • Product placement: Fast Company points to the partnership between Netflix, Stranger Things, and Coca-Cola as a prime example of this trend, although this strategy works best for big companies and high-profile IP.

Benefits of TV Streaming Advertising

Writing for Forbes, Mike Rowan highlights what an opportunity TV streaming advertising can be for advertisers, especially if used in tandem with traditional TV advertising. He also highlights the following advantages of advertising through streaming services:

  • Hyper-targeted audiences
  • Opportunities for retargeting across channels
  • Better attribution tracking

Because OTT content is streamed over the internet, the implications for monitoring and data analytics are vast and promising. There was a time when advertisers could only dream of having access to so much data about their viewers.

Tips for Creating an Ad for Streaming Services

TV streaming advertising is similar to advertising through traditional cable, but it’s still a different ballgame. Consider the following when planning an ad campaign for streaming platforms.

Platform vs. Device

There’s a difference between placing advertisements through a service, such as Hulu, vs. through the CTV device itself, such as a Roku. Consider both options and whether one might be better for your brand than the other.

Do Your Research

What will you actually be responsible for as the advertiser? Some streaming services – such as Hulu – will handle encoding and streaming for you, so all you have to do is create the ad. Make sure you understand whether/how your role will differ from traditional cable advertising.

Ad Format Options

There’s certainly still a home for the traditional 15- or 30-second ad on streaming services (again, Hulu is a great example). However, as mentioned above, streaming platforms are creating lots of opportunities for experimentation. Carefully weigh your brand, your target audience, and the capabilities of the streaming service you’re considering to determine the best ad format for you.

Embrace the New Normal

2020 has certainly brought a lot of uncertainty, and the thought of embracing a new advertising channel might seem a little overwhelming. But with an expert agency like Bloom by your side, you don’t have to be afraid of the new. As OTT goes mainstream, streaming services still need your ad revenue. Reach out today to find out how we can help you connect with your audiences on their favorite streaming platforms.

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