Top Four Challenges Facing Advertisers Amidst the Rise of Ad-Supported Streaming

Changes in viewer preferences are leading to new opportunities for marketers As we detailed on our earlier blog 2023 saw CTV audiences continue to grow at the expense of traditional broadcast and cable TV Viewers proved they were willing to watch ads on CTV unlocking streamersamp8217 ability to monetize more of the CTV experience Streamers and content companies followed suit and there are now thousands of free adsupported streaming TV FAST channels giving viewers seemingly unlimited choices for what to watchEven apps like Netflix are now offering lower cost adsupported subscription tiers amp8211 an important evolution since Hub Entertainment research reveals a growing consumer interest in adsupported streaming Approximately 64 of their respondents said they would opt for an adsupported service to save on subscription costsStill as the industry leans more into FAST and advertising video on demand AVOD there are some challenges that advertisers need to crack to make the most out of this exciting opportunityChallenge 1 Industry FragmentationAs the industry grows audiences are increasingly diversifying their viewing behavior According to Comscore as viewers spend more time watching streaming TV 75 of those newly acquired hours are spent watching content outside of the top six streaming apps Netflix YouTube Prime Video Hulu Max and DisneyFragmentation doesn39t just persist in terms of where viewers are watching With so much growth potential and a relatively nascent ecosystem we havenamp8217t yet seen the huge exits MampampA and consolidation that defined ad tech over the past decade On top of that the largest CTV publishers and streamers often act as walled gardens limiting transparency in the hopes of winning direct sales What this means is that adsupported streaming in 2024 is notably fragmented making it challenging for advertisers to buy audiences at scale and track where their ads are running It also makes it difficult to fairly assess performance amp8211 since it is hard to compare results across platforms or even to track the full impact of individual channels on resultsLonger term we will likely see increased consolidation in the AVODFAST space as the sector matures and economies of scale come to bear on the key industry players If you think of the Gartner Hype Cycle weamp8217re probably still in the technology trigger stage with nextgen tools such as generative AI GenAI poised to massively disrupt how we all do businessIf youamp8217re an advertiser in 2024 how do you win in the existing ecosystem Partners like Wurl amp8211 whose platforms are foundational to CTV content and ad delivery and who enable advertisers to buy across platforms and channels efficiently amp8211 are aiming to help make sense of the fragmented ecosystem We offer a streamlined approach to reach diverse audiences without the headache of dealing with multiple disparate systemsChallenge 2 Performance on CTVCTV media buying is often a bit of a jump ball In some cases itamp8217s managed by buyers of traditional teams but the currencies and technologies make it challenging to translate linear TV strategies to CTV Often CTV is picked up by teams with digital backgrounds These individuals are accustomed to the detailed performance metrics of web and mobile advertising leading to frustration that they donamp8217t often have access to the types of data and reporting they are used to In fact despite the growth of CTV only 8 of advertisers see it as the top medium for marketing performance through programmatic systemsThe demand for accountability and transparency in CTV advertising is high yet amp8211 as we just discussed amp8211 many solutions often lack clarity Another consequence of AVODFAST being a relatively nascent industry is that many advertisers donamp8217t have a good insight into the important metrics to track While CTV can be a performance channel amp8211 with the correct tools amp8211 advertisers with a performance mindset should ask themselves what types of data they need in order to measure and optimize their campaignsWe strongly believe that the industry will eventually coalesce around the players offering both transparency and direction on how to do performance marketing on CTV Wurl addresses this by providing clear insights into where and when ads run ensuring advertisers can measure and optimize their CTV campaigns with confidenceChallenge 3 A Crowded Advertising MarketThe unique value proposition of AVODFAST and the reason for the hype and competition we discussed above is that CTV offers a unique blend of digital39s sharp targeting with TV39s wide reach and immersive viewing experience But with so much content out there simply appearing on a viewer39s screen isn39t enough Advertisers must engage viewers effectively making ads that not only show up but also stand outThere are two elements to this an advertising challenge and a technological one In terms of advertising understanding what ads perform well on CTV is an ongoing journey of discovery Finding the right messages and the right contexts to display them in will be the key challenge for advertisers as the ecosystem continues to matureHowever this marketing challenge is both linked to and separate from the technological challenge posed by AVODFAST advertising Weamp8217re already seeing advertisers and vendors experiment with innovative solutions like QR codes and companies like Disney are on the cutting edge of shoppable TV ads These trials highlight attempts to engage viewers more interactively marrying distinctive creatives and the technological edge unique to CTVFurthermore as the technology for measuring amp8216positiveamp8217 attention grows it becomes easier to dial in on the tactics and messages that are driving results Research from Amplified Intelligence suggestsA direct link between attention and ad Impact The research underscores a significant relationship between the amount of active attention an ad receives measured in Active Attention Seconds and its shortterm advertising strength STAS Specifically as active attention to an ad increases so does the likelihood of the ad positively influencing brand recall and purchase decisionsInsufficiency of two seconds of attention Amplified Intelligence39s findings challenge the adequacy of the commonly cited twosecond threshold for ad viewing The research indicates that two seconds is insufficient for meaningful processing by viewers implying that ads need to engage viewers beyond this minimal duration to influence brand choice and sales uplift significantlyView duration vs active attention The study also reveals that traditional metrics like view duration may not accurately reflect viewer engagement as they could easily capture passive viewing or even viewer distraction Instead active attention amp8211 where viewers are genuinely focused on the ad amp8211 provides a more accurate measure of engagementKeeping this in mind there is a huge opportunity for technology to identify the correct contextual keys in programming and allow advertisers to target their creatives to where they will get the maximum positive active attentionChallenge 4 Ad Load and Viewer ToleranceAs the CTV ecosystem grows so does the challenge of presenting ads in a way that doesn39t detract from the viewer39s experience Viewers are increasingly intolerant of intrusive ad breaks preferring shorter ad pods that don39t disrupt their viewing experience too significantly For platforms and advertisers the goal is to strike a balance between generating positive attention and maintaining an enjoyable viewer experience that reduces ad fatigueWhen it comes to CTV advertising managing the frequency of ads is critical to maintaining this balance Advertisers and platforms must work together to ensure that ads are not only relevant but also not overly repetitive It seems like the industry is making modest strides in this direction but even this past week when I was streaming a show with my family we saw the same ad repeated so many times that it actually became the joke of the room This is a great example of where viewer tolerance tipped what could have been positive attention for the advertiser into the realm of negative attentionFrequencycapping tactics are essential tools in creating positive attention however dialing in for relevance is also a key differencemaker In the situation described above part of the problem came from the fact that the ad didnamp8217t match the content Viewers will be more tolerant of ads when they are less disruptive While accurate audience profiles can certainly help ads feel relevant it shouldnamp8217t be the only targeting strategy applied Iamp8217d argue that context and thus contextual targeting is equally importantThe stakes for frequency capping and relevance are higher with CTV because of the prominent and immersive nature of television as a medium Viewers watching content on the largest screen in their home are less forgiving Partners like Wurl who can offer contextual targeting solutions and access to billions of impressions across multiple streamers and publishers can help solve for not only frequency but relevancy as wellAdvertisers can still define the market that they wantThe rise of AVODFAST as a content distribution model presents unprecedented opportunities amp8211 and also challenges amp8211 for advertisers aiming to capitalize on this growing market From the industry39s fragmentation to the need for performance transparency there are still common pain points for brands looking to expand their presence on CTV As technological innovation provides increasingly sophisticated solutions for many of these common issues marketers would do well to test learn and invest in solutions that help them fully realize the potential of CTV to engage audiences build positive attention and deliver measurable resultsPosted at MediaVillage through the Thought Leadership selfpublishing platformClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillageorgMyersBizNet

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Top Four Challenges Facing Advertisers Amidst the Rise of Ad-Supported Streaming

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Peter Crofut

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