TV

How to Improve Ad Experiences on Streaming Services

The growth of ad-supported streaming services continues to be one of the most important developments in the media. A new study confirms that acceptance of advertising is a major driver behind that trend, but also shows that consumer satisfaction with streaming advertising is not as high as it could be.

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Ad Spend Trends

Guideline has issued an analysis of ad spending trends in several key markets, showing both similarities and differences.

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Rough Waters? Downstream Effects from the Transition to Streaming Via Smart TVs

David Tice Consultant, HUB Entertainment Research

Justin FrommHead of Insights & Thought Leadership, Samsung Ads

Justin Fromm from Samsung Ads and David Tice of HUB Entertainment Research discussed how consumer behavior is changing due to greater Smart TV penetration and usage. Streaming has become the default method of watching TV for a large swath of viewers. Streaming audiences have also increasingly become more receptive to advertising. Another important trend, Smart TV operating systems (OEMs) are constantly upgraded and made easier to use. As a result, home screen interactions continue to grow. Home screens have played a significant role in content discovery, although TV brand is a moderating factor. Home screens have even helped accelerate the rise of FAST services. In an era of constant churn, coming up in a home screen search and having an advertising model or tier have become critical to retention. Key takeaways:
  • Two-thirds of people in all TV households use a CTV to stream content.
  • Home screen usage is up 140% due to manufacturers consistently improving the user experience and helping viewers find content.
  • Nearly two-thirds of Smart TV users spend most of their time with streaming. In 2022, 70% of all viewing minutes were streamed, and 62% of viewers spent more than half of their time with streaming content.
  • In Q4 of 2023, 64% of respondents said they would rather watch ads and save money on a subscription, up 7% from Q4 of 2022. Ad tolerance has been stable over the last three years.
  • All streaming was up 22% in 2023. AVOD was up 50%, while SVOD use was down 7%. Home screen use was up 117%, and deep link use was up 59% from 2020.
  • Content discovery occurs about 50% of the time from the TV’s home screen, and 50% from an app’s home screen. This varied substantially by brand. For instance, only 38% of TCL owners (bottom of the batch) found content from the home screen.
  • While most found shows from TV promos (61%) in the last year, 17% of respondents found their favorite new show through their TVs’ home screen.
  • Advertising to at-risk audiences on the TVs’ home screen increased retention by a factor of eight.
  • In the last two years, FAST services increased 16%, which was 6% faster than the two years prior. The number one reason people used a FAST app was, they found it on their TV’s home screen (36%).

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How Streaming Release Models Impact Viewing Behaviors

Rebecca FineAssociate Director, Marketing Insights, Samba TV

Cole StrainVP, Head of R&D, Samba TV

An examination of the top H1 2023 streaming shows for household viewership found that original streaming content captures audiences, according to Rebecca Fine and Cole Strain of Samba TV. Bingeing behavior is a significant household viewership change as viewers have shifted from linear to streaming TV consumption. When given the choice, viewers prefer to binge. Seventy-two percent of U.S. adults identify themselves as binge watchers. A consistent trend across viewership for streaming program premieres was that 44% of viewers watched the program in the first four days, and 78% watched the program by day 15. Bingeable shows are more likely to be completed and have higher average retention between season premiere and finale. Forty-five percent of households will finish the whole season when the season drops in bulk, but retention drops to 35% when the show is released weekly. Netflix’s propensity for the bulk release model means that more of its shows get fully consumed. Rebecca and Cole analyzed the top 50 streaming programs and found that most platforms have a high percentage of households who only watch only one show. However, 73% of viewers watch more than one top show on Netflix. Key takeaways:
  • Households like to binge. Forty-seven percent of viewing households binged top bulk release shows in H1 2023.
  • Binge watchers are more likely to watch platforms that release content this way.
  • Seventy percent of millennials are more likely to keep a subscription to streaming services that release shows in bulk.
  • Bingeability might be more important than buzz when it comes to watching a show from the premiere to finale.

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Linear vs. Streaming: Current State of Creative and Media

Nicole Lawless DesJardins, Ph.D.Sr. Director Data Science, iSpot.tv

Leslie Wood, Ph.D.CRO, iSpot.tv

Leslie Wood and Nicole Lawless DesJardins, both of iSpot.tv, provided an overview of advertising trends in linear and streaming over the last two years in terms of ad creative, campaign and measurement. They defined linear as any content purchased on a national schedule and noted that variations exist across industries. Among their findings:
  • Streaming creatives outnumbered linear 2:1 during 2022 and 2023, and the share of streaming creatives increased in 2023.
  • In terms of creative rotation, linear creatives were on air five times longer during 2022 and 2023 than streaming creative. On linear, a smaller set of creatives will rotate on and off for over a year while on streaming, there are many creatives and each creative runs for two months.
  • The majority of impressions are on linear, but there has been a 24% year-over-year increase in streaming impressions. There are also variations depending on seasons and industries.
  • During 2022-2023, the vast majority of the campaigns in both years were linear only or linear first; however, streaming only, streaming first and mixed campaigns saw significant growth year-over-year.
Key takeaways:
  • Ad creative: Creatives ran for a shorter period of time on streaming compared to linear platforms during 2022-2023.
  • Campaign: Across industries, brands were increasingly leveraging streaming on top of traditional linear TV buys. Linear-only campaigns have declined and there have been increases in mixed and streaming-first campaigns, along with the emergence of streaming-only campaigns.
  • As much as 57% of a campaign’s audience is exposed to the campaign on both streaming and linear TV.
  • Measurement: Linear generated higher reach and frequency per campaign compared to streaming.
  • In 2023, linear’s reach surpassed streaming’s reach across industries, and average frequency is nearly 2.5x higher on linear.
  • The sweet spot of frequency on streaming is approximately four and is less variable than linear due to better targeting and frequency control within the streaming environment.

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Tune-In to Discover What is Making Audiences Tune-Out

Travis FloodExecutive Director of Insights, Comcast Advertising

Duane Varan, Ph.D.CEO, MediaScience

Travis Flood (Comcast Advertising) and Duane Varan (MediaScience) presented research, which explored improving ad pod architecture, aimed at better engaging audiences by understanding what makes them tune-out. To provide framework to their research process, Travis indicated they started with a literature review, to understand the existing viewer experience. Focus was placed on the quantity, quality and relevance of the ads, in addition to media effectiveness studies (e.g., pod architecture, ad creative, getting the right viewers, etc.). Duane indicated that the literature review unveiled gaps, particularly in the examination of the content within the middle section of an ad pod. Based on this, the goal of the subsequent research was to understand the optimal duration of ad pods to optimize both the viewer experience and brand impact, difference in impact (e.g., more ads vs. fewer ads in the same break duration) and the impact of frequency on viewers and brands. The research included 840 participants who watched a 30-minute program with structured ad breaks. Feedback was measured using a post-exposure survey, neurometrics and facial coding. Results revealed that shorter pod length, grouping consistency in ad length and capping frequency at two to three ads per program as most effective. Key takeaways:
  • Optimal pod length: Two minutes or less leads to better results. After viewing 2 minutes of ads, recall begins to decrease. Recall is 2x higher at 2 minutes vs. 3 minutes, and after 3 minutes, recall is at its lowest point.
  • Viewers are more engaged as ads begin. Using facial coding data showed that for a heavy clutter cell, there was marginally less joy in the first 5 seconds of the ad, indicating that ad load impacts how viewers experience ads.
  • Facial coding data revealed that ad clutter can diminish how funny scenes are for viewers.
  • Consistency is key in ad lengths within a pod. Viewer testing showed that when ads had different lengths in a pod, it made the ad break feel longer compared to pods with ads of the same length.
  • Ad frequency was optimized at two per program. There was significant boost in ad recognition and purchase intent going from 1 to 2 exposures in a program. Capping frequency at 2-3 per program can positively impact recognition and purchase intent.

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