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Did you know that ad spending on streaming services is expected to reach $25.5 billion by 2025? That’s a huge increase from the $11.5 billion spent in 2020! So, what’s driving this growth? And what does it mean for advertisers? Here are some insights into why streaming services are becoming a key destination for advertising dollars.
The growth of streaming services and the decline of traditional TV viewership has forced advertisers to explore new platforms. According to eMarketer, TV ad spending will decrease from $72.7 billion in 2019 to $71.4 billion in 2020. This is the first time that TV ad spending has decreased since the Great Recession of 2008-2009. In contrast, ad spending on streaming services grew by nearly 30% in 2020, reaching $15.5 billion.
Streaming services offer more data and analytics than traditional TV, allowing advertisers to better target their audience. For example, Netflix uses data from its subscribers to create over 50 different viewer profiles. This allows advertisers to specifically target their ads to specific types of viewers. Additionally, streaming services allow advertisers to track how many people view their ads and how long they view them for. This data can be used to optimize future campaigns.
Advertisers can also create interactive ads that allow viewers to directly engage with the brand. This is a huge advantage over traditional TV advertising, which is generally passive. Interactive ads on streaming services can take many different forms, such as quizzes, polls, and surveys. This allows brands to collect valuable data about their target audience while also building relationships with potential customers.
Streaming services are also growing in popularity among younger audiences, who are increasingly difficult to reach through traditional advertising channels. eMarketer estimates that nearly 60% of 18-34-year-olds will use a streaming service at least once per month in 2020. This is compared to just 50% of this age group that used a streaming service in 2017. Additionally, 30% of 18-34-year-olds say they would cancel their traditional TV service if it meant they could get all their content from streaming services. This is a huge opportunity for advertisers to reach young people who are otherwise difficult to reach.
Overall, streaming services provide a more immersive experience for viewers. They offer more data and analytics than traditional TV, which allows advertisers to better target their audience. Additionally, they offer interactive ads that allow viewers to directly engage with the brand. And finally, they are growing in popularity among younger audiences, who are increasingly difficult to reach through traditional advertising channels. For all these reasons, streaming services are becoming a key destination for advertising dollars.
Popular Streaming Programs And How Specific Advertisers Worked With Them
Netflix
Stranger Things: The Duffer Brothers, creators of Stranger Things, stated that they wanted the show to have a 1980s feel. As such, products and brands from that era are frequently featured in the show, including Coca-Cola, Eggo waffles, and Dungeons & Dragons. These products are often used to create a sense of nostalgia for the viewer.
Hulu
The Handmaid’s Tale: The Handmaid’s Tale is set in a dystopian future where women are oppressed and forced into sexual servitude. Given the sensitive nature of the show, advertisers must be careful not to be too intrusive or tone-deaf. For example, during one episode that dealt with rape, an ad for tampons was featured. This led to some viewers feeling that the ad was in poor taste.
Amazon Prime
The Grand Tour: The Grand Tour is a car show hosted by former Top Gear hosts Jeremy Clarkson, Richard Hammond, and James May. The show is sponsored by Amazon, which frequently features its products and services in the show. For example, in one episode, the hosts use Amazon’s Alexa voice assistant to help them find a restaurant.
HBO
Game of Thrones: Game of Thrones is one of the most popular shows on television and has a large and passionate fan base. Given the show’s adult themes, advertisers must be careful not to be too intrusive or offensive. During one episode featuring a graphic sex scene, an erectile dysfunction drug ad was shown. Some people felt that this was in poor taste, and the ad was subsequently pulled from airwaves in certain countries due to criticism.
CBS
The Big Bang Theory: The Big Bang Theory is a popular sitcom that has been on the air for over 10 years. The show’s characters are often seen using Apple products, such as MacBooks and iPhones. In one episode, the character Sheldon even says that he “prefers Apple products because they just work.” This close relationship between the show and Apple has led to some viewers feeling that the show is little more than an advertisement for Apple products.
How Does Connected TV Advertising Performance Compare to Other Types Of Advertising?
Research from AdColony found that connected TV (CTV) advertising has a higher ROI than other types of advertising, including traditional TV, digital video, and social media. CTV advertising also has a higher view-through rate (VTR), which measures the percentage of people who watch an ad all the way through, than any other type of advertising.
One reason for CTV’s high ROI is that it allows advertisers to target their audience more accurately than other types of advertising. CTV providers, such as Roku and Amazon Fire TV, collect data on viewers’ watching habits and use this information to target ads. For example, if a Roku user has been watching a lot of cooking shows, they may see ads for KitchenAid mixers. This targeted approach leads to a higher VTR, as viewers are more likely to watch an ad that is relevant to their interests.
Another reason for CTV’s high ROI is the interactive nature of the ads. CTV viewers can use their remote control to click on an ad and be taken to the advertiser’s website or a landing page. This allows advertisers to track how many people are taking action after seeing their ad.
Overall, CTV provides a more immersive experience for viewers and offers advertisers a higher ROI than other types of advertising. As the popularity of streaming services continues to grow, we can expect to see more and more advertisers flock to this platform in order to maximize their ROI.
Why You Should Consider Connected TV Advertising For Your Next Campaign
As more and more people turn to streaming services for their entertainment, advertisers are following suit. Streaming services offer a number of advantages for advertisers, including more data and analytics, interactive ads, and a growing audience of young people. So if you’re looking to maximize your ROI, consider working with a connected TV advertising agency for your next campaign.
