In an era dominated by digital content consumption, streaming TV has emerged as a powerful tool for marketers to connect with their target audience. In this post, we’ll explore the world of streaming TV advertising, from its definition, to best practices, and the platforms that support it. Let’s start from the top.
Streaming TV advertising is a form of promotional content strategically delivered to user devices over the internet for on-demand viewing. This advertising model is an important part of the broader streaming TV landscape, which involves the distribution of televised content over the Internet. It gives users the opportunity to watch movies, TV shows, and other programming without the need for a traditional cable subscription.
Streaming TV advertising closely resembles traditional linear TV ads but operates within the digital realm. These ads can appear before, after, or during streaming TV content, providing marketers with a variety of opportunities to connect with their audience. Those on an ad-supported tier will encounter streaming TV ads, including commercials and sponsored content strategically placed to capture viewers’ attention during their streaming experience.
The significance of streaming TV advertising cannot go unnoticed as many marketers are incorporating these ads into their marketing strategies. Current estimates indicate that approximately 85% of households utilize at least one streaming service, with over half of all Americans categorized as “cord-cutters,” symbolizing their abandonment of traditional cable TV in favor of internet-based streaming alternatives.
And the momentum is growing with the introduction of ad-supported tiers by streaming TV providers at more affordable rates compared to their ad-free offerings. Even industry giants like Netflix and Disney+ have recognized the potential of ad-supported models, contributing to the ongoing expansion of streaming TV advertising.
Before you explore streaming TV, you’ll want to learn the basics, including the differences between Streaming TV, Over-the-Top (OTT), and Connected TV (CTV). Let’s take a closer look at each…
Streaming TV: The Distribution Channel
Streaming TV represents the distribution channel itself. It involves the delivery of television content over the internet. This method allows users to access on-demand content without the need for traditional cable or satellite broadcasting.
OTT: The Medium of Delivery
Over-the-Top (OTT) refers to the medium over which streaming ads are delivered, and this medium is the internet. OTT encompasses the delivery of video content directly over the internet, bypassing traditional cable or satellite providers. Streaming ads, including commercials and promotional content, are distributed over the internet through OTT platforms. This medium provides users with the flexibility to consume content on various devices connected to the internet.
CTV: The Viewing Device
Connected TV (CTV) is the device viewers use to access streaming content. It serves as the vehicle through which users engage with streaming TV and OTT services. Connected TVs include smart TVs, gaming consoles, streaming devices (like Roku or Amazon Fire Stick), and other internet-enabled devices that allow users to access and watch streaming content on their traditional television screens.
While Streaming TV, OTT, and CTV serve distinct purposes in the digital world, they share a commonality in that they all rely on the internet to deliver video content. Despite their differences, marketers may use the terms interchangeably due to their shared reliance on internet-based content delivery and their similar objectives of reaching audiences in the digital space.
Streaming advertising is a tool for advertisers to connect with their audience via ad-supported streaming services. Advertisers purchase media placements on platforms like Hulu or Roku, allowing for precise targeting based on location, content preferences, and online behavior. The data captured from these campaigns gives advertisers the chance to measure performance and optimize. While live streaming platforms are part of the overall picture, the majority of ad buys occur with Video on Demand (VOD) content, offering a controlled environment for personalized and targeted advertising.
Different models within streaming include AVOD, SVOD, and TVOD. Let’s dive deeper into how each of them actually work.
Ad-based Video on Demand (AVOD)
AVOD operates on an ad-supported model, meaning users can access content without the need for a subscription or transactional fee. An example of an AVOD platform is Tubi. On Tubi, subscribers don’t have the option for an ad-free tier. Instead, they encounter 15 and 30-second unskippable ad spots during their content consumption. Tubi’s success is clear with over 74 million monthly active users benefiting from a free, ad-supported streaming experience.
Subscription Video on Demand (SVOD)
SVOD requires users to subscribe, typically through a monthly fee. While some SVOD services offer an ad-free viewing experience, an increasing number are introducing ad-supported tiers to capitalize on the streaming TV advertising landscape. Netflix is a prime example of SVOD, providing users with the choice to pay a monthly fee for an ad-free experience or opt for ad-supported programs at a discounted rate.
Transactional Video on Demand (TVOD)
TVOD involves a pay-per-view model where users pay for individual pieces of content, such as renting a movie or TV show for a short period. This model is similar to traditional pay-per-view services. Users make specific transactions for the content they want to watch without the commitment of a subscription. This approach is often used for new releases or premium content.
To put it simply, AVOD relies on ads to sustain free access to content, SVOD requires a subscription with an increasing trend toward introducing ad-supported options, and TVOD allows users to pay for specific content on a one-time basis. Each model caters to different user preferences, offering a range of choices to fit the viewer’s unique needs.
Integrating streaming TV into your media mix offers a range of benefits that recognize the changing preferences and behaviors of today’s audience. Let’s check out a few top benefits below:
Increased Viewership Across Diverse Locations
Streaming TV caters to the habits of consumers who are now watching more content in various locations. Whether at home, on the go, or in public spaces, the accessibility of streaming services allows advertisers to reach audiences in diverse settings.
Precision Targeting Capabilities
Streaming TV excels in precision targeting, allowing advertisers to tailor their campaigns based on specific demographics, interests, and online behavior. This level of targeting surpasses the capabilities of traditional linear TV, enabling more personalized and relevant content delivery.
Contextualizing Linear TV Performance
The data generated from streaming plays not only provides insights into the performance of streaming campaigns but also helps contextualize the effectiveness of linear TV media buys. This integration enables marketers to understand the synergies between different channels and optimize their overall media strategy.
Encouraging Competitive Offerings from Linear Providers
The growth of streaming advertising has encouraged traditional linear TV providers to enhance their offerings. This competitive environment benefits advertisers by providing a wider range of options, ensuring they can choose the most effective channels for their campaigns.
Real-Time Analytics
Streaming TV advertising offers real-time analytics, providing instant insights into campaign performance. This allows marketers to make data-driven decisions on the fly, adjusting strategies and optimizing campaigns for maximum impact.
Flexible Levers for ROAS
The flexibility of streaming TV advertising makes it easier for marketers to adjust the levers contributing to return on ad spend. This adaptability ensures that campaigns can be fine-tuned for optimal results, maximizing the effectiveness of advertising budgets.
Accessibility for SMBs and D2C Brands
Streaming TV advertising is much more accessible to small and medium-sized businesses (SMBs) and direct-to-consumer (D2C) brands. This accessibility ensures that even with limited budgets, these businesses can make the most of each dollar, reaching their target audiences through a cost-effective and impactful medium.
The ecosystem of streaming services has evolved to include various ad-supported models to cater to both advertisers and viewers. As the demand for streaming content has increased, platforms have recognized the revenue potential of integrating ads into their services. So, which streaming platforms have ads today? Check out the list below:
Netflix
Hulu
Sling
Paramount+
Disney+
Max
Roku
Peacock
Tubi
Pluto TV
IMDb TV
Crackle
The growing number of platforms showing ads has resulted in a fragmented landscape, making it challenging for advertisers to make optimal ad buys. Each platform has its unique audience, content, and advertising formats, requiring a nuanced approach to campaign planning.
“Continued price increases on streaming subscriptions will propel more viewers into ad-supported options. Combined with greater restrictions on password sharing, this will push more viewers into ad-supported tiers, increasing the amount of inventory brands can tap into.”
– Stefanos Metaxas, EVP, Streaming+ at Tinuiti
By leveraging the services of a Streaming agency, like Tinuiti, advertisers can overcome the challenges posed by the diversity of ad-supported streaming platforms. An agency provides strategic insights, data-driven approaches, and a comprehensive understanding of the evolving streaming landscape, enabling advertisers to make informed decisions and execute successful cross-platform campaigns.
Implementing effective strategies is crucial for maximizing reach, engagement, and ROI in the streaming world. Here are some best practices to enhance the success of your streaming TV advertising campaigns…
Utilize Data for Targeting and Segmentation
Leverage both first-party and third-party data to target highly specific demographics. This involves understanding your customer deeply and tailoring your advertising efforts to meet the preferences and behaviors of your target audience. Understand the content your ads will appear alongside. Aligning your ads with relevant content enhances the overall viewer experience and ensures that your messaging resonates effectively.
Leverage Measurable Insights
Track key metrics to gauge campaign performance, including reach, brand lift, and offline lift. Establish clear objectives for your ads and ensure that you can measure metrics aligned with those objectives. If certain metrics prove challenging to track, consider reaching out to a streaming agency. These experts can provide insights and solutions to ensure comprehensive measurement and analytics for your campaign.
“A key reason why many of our clients have fallen in love with streaming as a performance channel is because of the high precision of the measurement that we are able to bring to it.”
– Sean Odlum, Chief Product Officer at Tinuiti
Stay Informed
Continuously monitor trends in streaming TV advertising, such as the growth of cord-cutters, the influx of new demographics into streaming TV, and the increasing availability of ad-supported content. Adapting your strategies to these trends ensures relevance and effectiveness.
Understand Cost Dynamics
While streaming TV is generally perceived as low-cost compared to linear TV, variations exist based on targeting criteria and timing. Cost per thousand impressions (CPM) can surpass linear TV, as streaming involves bidding for ad space on individual screens, leading to competition for each ad spot. To optimize costs, consider strategies such as targeting specific audiences at strategic times. A well-planned approach ensures that you achieve cost-effectiveness without compromising campaign quality.
Keep Creative Top of Mind
Design ad creative that resonates with the streaming experience. Understand the unique environment of streaming TV and craft content that captures attention and encourages engagement. It’s also important to recognize the proximity of viewers’ phones to the TV remote. Use effective calls-to-action (CTAs) in your ads, encouraging viewers to take immediate action. Options include QR codes, website visits, texting, making a call, or other interactive elements.
By implementing these best practices, you can navigate the complexities of streaming TV advertising, ensuring campaigns are not only impactful but also measurable, cost-effective, and aligned with current industry trends.
Interested in learning more about Streaming? Check out the Streaming+ services we offer at Tinuiti or reach out for more information. We’d love to help you get started in the ever-evolving world of streaming advertising.
