Audiences flock to ad-supported streaming platforms. Brands, are you noticing?

Published: July 18, 2023

min read

With the expansion of digital platforms and changing consumer preferences in recent years, the streaming video industry has undergone a significant transformation. The convenience and flexibility it provides to watch the content from anywhere and anytime have led the majority of viewers—not just the younger generation—to shift towards streaming platforms from traditional TV.

With the rise of its demand and adoption among audiences, many of the streaming giants launched ad-supported tiers. And the recent survey conducted by HarrisX and Samba TV shows that the strategy is paying off for many such providers.

According to the survey findings, the majority of consumers who support ad-supported streaming services are the ones who are first-time subscribers and not current users who switched their plans.

To elaborate, the survey discovered that 11% of Netflix users and 19% of Disney's streaming service users possess ad-supported tiers. Only 15% of these customers downgraded from a higher-cost subscription, with the remaining 85% becoming new subscribers.

The findings additionally reveal consumer preferences for advertisements in streaming content. 42 percent anticipate ads appearing at the beginning of a programme; 19% want them in the middle; 16% want them at the very end; and 23% want a combination of all three. The majority are happy with seeing two or three advertisements while watching, but only 6% are fine with spotting four or more advertisements.

Besides, according to the research, the majority of customers would continue with their subscriptions even if the price increased. Only 16% and 12% were willing to cancel entirely, while 18% and 19%, respectively, would move to a less expensive tier with ads.

What do the survey results imply for CMOs?

From getting annoyed by seeing ads on traditional TV to feeling fine with ad-supported streaming platforms, this is indeed a huge transformation and big news for brands and marketing teams to pay close attention to.

Although the fact that millions of people are using internet-age platforms to watch their favourite shows proves there is a strong market base available for streaming platforms, the new survey results emphasise the growing demand for ad-supported tiers.

As a result of this, brands may expect more ad-supported streaming services to hit the market and a significant rise in competition in this space. And we believe brands must use this wider adoption to their advantage with their strategic moves so as to make the most of their media investment.

Survey results apparently show that audiences actively prefer consuming content on these ad-supported platforms. Thus, to make the best use of these audiences, brands must prudently analyse and gain a deep understanding of the viewers that engage with ad-supported streaming services before launching the campaign. It will help brands greatly to tailor their messaging, creatives, and strategies to resonate with them well and boost engagement.
As a considerable portion of ad-supported streaming service viewers’ access content on mobile devices, brands must not ignore or give less importance to optimising content for mobile viewers. They must ensure the high-quality visuals they use are appealing even on smaller screens; avoid using excessive text that is hard to read on mobile devices; design interactive elements in ads to be user-friendly on mobile devices; and so on. This way, brands will be able to boost engagement in a more intuitive way.
As Ad-supported streaming services can provide brands with valuable data and analytics regarding ad performance and audience behaviour, brands must not fail to implement robust tracking and measurement mechanisms to constantly monitor metrics such as completion rates, impressions, click-through rates, and so on. The insights gained from it will significantly help them make data-driven decisions for ongoing and future campaigns and optimise their advertising efforts for better results.
Brands must continuously experiment with different ad formats, messaging variations, and targeting strategies using A/B testing. It will provide them with the insights they need to spot the most impactful combinations of creative elements and targeting parameters so that they can take action accordingly. As competition is already intense in this space, brands must not ignore this, as it will lead them to go off track and lose the opportunity to their competitors.

That said, one of the recent survey results from PQ Media shows a declining engagement rate on ad-supported platforms. Thus, although audience acceptance of ad-supported tiers looks like a bright side, making ads appealing and intuitive is brands’ responsibility so as to make their investment meaningful and beneficial.

Author

Bill Walker

Bill is a marketing strategist who believes in the power of storytelling. He's known for his creativity, wit, and ability to connect with audiences across all channels. When he's not crafting marketing campaigns, you can find him hiking in the mountains or reading a good book.