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How Will Streaming Ads Benefit DTC Campaigns?

How Will Streaming Ads Benefit DTC Campaigns?

As the economy worsens and inflation rises, the relationship between audiences and the media they consume has begun to erode and continues to change. Despite the success and growth achieved by some streaming services, US consumers remain unsatisfied when it comes to the perceived value of the services.

A new report from Tivo reveals that 65% of the US public is willing to tolerate commercials on streaming platforms in exchange for free TV services. This number has risen from a previous 43% in 2020 and provides a valuable insight into the consumers’ relationships with video advertising. This increase contradicts the previous actions of many streaming services, such as creating new platforms altogether or adding a ‘premium,’ ad-free service subscription at a higher price. Statistics show that customers are less interested in paying a premium price for ad-free entertainment and would rather pay lower costs with commercials.

What does this mean for advertisers? Well, it’s good news for those utilizing video ad content or those looking to expand their marketing mediums, as the increase in ad space could mean lower costs and higher accessibility and more eyeballs viewing the direct to consumer video advertising. DRTV and infomercial marketers have yet to leap in with both feet on the streaming side, but the more platforms offer advertising options, the higher the chances that the still-high average CPM of $40 to $50 will drop.

This drop would provide direct to consumer marketers with much-needed TV reach that has been continuously eroding on linear TV networks. OTT allows for individualized advertising content on different viewers’ TVs while they watch the same content, ensuring targeted ad delivery and much more efficient ad spend. OTT advertising accounts for 51% of OTT marketing revenues already, and any advancements could contribute to more revenue for both the streaming platforms and advertisers.

Video content consumption is rising in all age ranges and target markets, and streaming platforms are more able to adjust their advertising capabilities to meet the changing needs and trends. The most significant projected increase in streaming video consumption is predicted to be among the 45-54 age group, a prime demographic especially for the DRTV products and services.

Netflix seems to remain in the loop with the ever-changing needs of its audience and has announced that it plans on running ads soon, confirming what many media and TV analysts have been predicting for some time now. This addition could open the doors to many innovations and opportunities for advertisers and streaming platforms alike and continue to shape the direct to consumer advertising industry.

Will DRTV Advertisers Cut the Cord in 2022?

Will DRTV Advertisers Cut the Cord in 2022?

After two years of double-digit rating declines, many in the industry are questioning the longevity of traditional television advertising in all lengths, both long and short form DRTV. If there’s one thing everyone in the DRTV industry can agree on: 2020 changed everything. During the pandemic’s first waves, advertisers, like so many others worldwide, were uncertain or scared about the future. The pandemic may have led to unprecedented change, but many underlying trends began long before COVID-19.

Today, the gap between those who view streaming services as an addition rather than a replacement and those who only use streaming services is quickly closing. According to an MRI-Simmons study, the two percentages went from 55% and 45%, respectively, to 51% and 49%. 5.5 million households also canceled pay-TV services offered by the top five providers last year, compared to 5.8 million in 2019. More than 4 in 5 households subscribe to at least one video-on-demand service. Respondents who made the switch to streaming only or plan to do so report that their main reason for doing so is to watch streaming services instead. A quarter of the respondents said that their TV packages are too costly and blamed prices. More than 43% of respondents claim streaming is the more cost-effective option.

Ad spending on smart TVs and streaming devices saw massive growth in 2020. | Image: IAB

These shifts are causing similar waves within advertiser spending, with companies beginning to allocate more to streaming. For the time being, traditional tv remains, along with many questions surrounding its future within the media world that remain unanswered, for now.