Good News for Advertisers – More Consumers Prefer Ad-Supported Streaming Services

In the era of cord-cutting, the way we consume content is constantly evolving. While the first streaming platforms such as Netflix were appealing because of their lack of ads, there is growing popularity of ad-supported streaming services.

In fact, according to a survey by Hub Entertainment Research, almost 6 in 10 (59%) viewers stated they would prefer to save money as compared to 41% who would prefer to avoid ads.

The survey specifically asked TV viewers which statement comes closest to how they feel about ads: “If watching ads will save $4-$5 vs. watching ad-free, I’ll choose that option;” or “If there’s an ad-free option, I’ll choose it even if it costs $4-$5 more per month.”

Source: Marketing Charts

The popularity of so-called FAST services (free, ad-supported TV streaming services) continues to expand.

Additional insights by Hub Entertainment Research revealed that 65% of respondents reported watching free streaming services with ads, up from 61% in June 2022, 57% in December 2021, and 55% in June 2021.

These services included Pluto TV, the free version of Peacock, the Roku Channel, and TubiTV, among others.

Source: Marketing Charts

So, in addition to saving money, what other factors are driving consumers to embrace these platforms?

Ad-supported streaming platforms have come a long way in terms of content offerings. They now provide a diverse library that includes both classic and current TV shows, movies, original content, news, and even live sports. This wide range of options ensures there’s something for everyone, making these platforms more appealing.

Results revealed that about one-third (34%) of respondents said that content matters more than ads if they’re really interested in a show.

Additionally, while ad-supported streaming services do include ads, many consumers find that the ad experience is relatively unobtrusive. They often feature shorter ad breaks than traditional television and offer the option to skip ads after a few seconds. This balance between content and ads is seen as acceptable by viewers, given the cost savings.

Half (50% of respondents) indicated that they can tolerate a certain number of ads.  However, if there are too many, they would go somewhere else.

Only about 1 in 6 (16%) said they’d never consider a platform with ads no matter how much they like the shows.

Advertising on Streaming and Connected TV Services

The increasing popularity of ad-supported streaming services is good news for advertisers.

There is a goldmine of opportunities for advertisers to reach their target audiences in a more personalized and engaging manner.

One of the most significant advantages of advertising on streaming services is the ability to precisely target your audience. These platforms have access to vast amounts of data, enabling advertisers to deliver highly personalized ads based on demographics, interests, and behavior.

9 Audiences to Target on CTV

1. Demographics

Demographics remain a foundational element of audience targeting, and CTV platforms offer robust demographic data. Consider targeting segments based on age, household income, children in the household, and location.

2. Interests and Hobbies

Interest-based targeting can be highly effective on CTV. Advertisers can reach audiences who have expressed interest in specific topics, hobbies, or genres of content. Whether it’s sports enthusiasts, foodies, travelers, or gamers, tailoring your ads to match viewers’ interests can boost engagement.

3. Behavior and Viewing Habits

Behavioral targeting on CTV involves analyzing viewers’ past behavior and viewing habits. Advertisers can segment audiences based on factors such as content consumption patterns, the frequency of streaming, and device usage. This data can help tailor ad campaigns to align with viewers’ preferences and habits.

4. Behavioral Targeting

Behavioral targeting involves analyzing viewers’ online behavior, including website visits, browsing behavior, and app usage. By understanding their online actions, advertisers can create highly relevant ad campaigns. For example, if a viewer frequently browses for travel deals, ads for vacation packages can be displayed during their CTV streaming.

5. Location and Geo-Targeting

Geo-targeting is a valuable strategy for local businesses and regional campaigns. Advertisers can target audiences based on location, ensuring that their ads reach viewers in specific geographic regions, cities, or even individual households.

7. Content Preferences

Content-based targeting involves reaching viewers based on their preferences for specific genres, shows, or content types. If your product or service aligns with a particular genre, consider targeting viewers who have shown an interest in that genre.

8. Retargeting and Lookalike Audiences

Retargeting involves reaching viewers who have interacted with your brand in some way but may not have converted. Lookalike audiences, on the other hand, involve targeting viewers who share similar characteristics with your existing customers. Both strategies can be powerful for driving conversions.

9. New Movers

Another valuable audience segment for CTV advertisers is new movers. This group consists of individuals and households who have recently relocated to a new area. New movers represent a unique opportunity for advertisers to engage with a receptive audience undergoing significant life changes.

Views are Becoming More Familiar with Shoppable Ads

Not only does CTV offer highly targeted options for reaching precision audiences, but viewers are becoming more familiar with advertising formats that support shoppable ads.

According to a VAB and Hub Entertainment Research study, 27% of TV and streaming viewers aged 16 and older recall seeing ads with a scannable QR code while watching TV.

Additionally:

  • 19% recall seeing ads that appear on a screen when a program is paused
  • 14% recall promos with an “add to watch list button
  • 12% recall click-to-buy ads

Engaging (compared to recall) with shoppable ads boasts impressive numbers. Respondents report having interacted with explorable ads (62%), “click to buy” ads (58%), pause ads (51%), and promos with an “add to watch list” button (51%) after seeing them.

Conclusion

As the streaming landscape continues to grow and evolve, advertisers have more opportunities than ever to reach audiences who are open to both seeing and engaging with ads. Embracing CTV advertising is a strategic move towards interacting with a receptive audience in the digital age.

Connected TV Success Kit

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