How Connected TV Is Changing With Ads Coming to Premium Streaming
Digital Marketing
Jan 11 2023
Streaming giants Netflix and Disney+ are bringing ad support to their entry-level subscribers, which means potential for big changes to CTV spending are on the way. Here’s why two of the biggest names in streaming are finally ready for ad partners, and how it could alter the CTV experience for both customers and ad buyers.
An Overview of Connected TV’s Advantages
With the advent of Connected TV devices, viewers can now enjoy a whole new world of content. Connected TV advertising provides an opportunity for creative campaigns that break through the noise and capture attention in a unique way.
-Interaction with customers – Connected TV advertising gives brands a chance to engage with customers on an ongoing basis, allowing them to respond more quickly to customer questions and comments.
-Connected TV offers a wide range of precision targeting options – Connected television allows advertisers to reach their target audience at the right time on the right screen with precision targeting and consistency across platforms.
-Connected television ads provide measurable attribution and campaign results – The key benefit of connected television advertising is that you can see how many people have clicked on your ad, allowing you to measure its performance and ROI, also using data from connected television ads to optimize your campaigns in real-time by adjusting bids, creativity, or targeting based on what’s working best at any given moment.
-Connected television helps you reach engaged viewers with uncluttered ad experiences – Connected television is a premium medium that can help you reach engaged viewers with uncluttered ad experiences, whether they’re watching live TV or streaming content on-demand.
Netflix, Disney to Include Ads in Entry-Level Price Tiers
Big changes are ahead for several popular streaming services. As heavy hitters like Netflix and Disney+ prepare ad-supported versions and new tier-based plans for viewers, virtually every major streaming service will soon offer at least some form of CTV placements. Hulu, Peacock, HBO Max, Paramount+, and Discovery+ are already fully integrated with ad content, excepting a few ad-free premium offerings.
With the last remaining holdouts starting to give way, here’s what we know so far about the newest platforms available for advertisers:
-Netflix, once built on the promise of ad-free TV service, will introduce a $6.99 monthly plan (its cheapest available offering) to be accompanied with streaming ads. The new pricing tier undoubtedly debuts amidst hopes to recapture some of the users lost with recent restrictions on account sharing and to compete with other ad-supported streaming services.
-Disney+ plans to bump its ad-free offering from $8 to $11 a month, with the $8 monthly plan remaining as its ad-supported service.
–So far, Hulu ($8), Amazon Prime ($15), Paramount+ ($5), and HBO Max ($10) aim to maintain their ad-supported plans.
-Apple TV remains the last major platform free of any concrete plans for ad-supported streaming — but don’t worry, discussions are already in the works.
What CTV Changes Can Marketers Expect?
Ad changes among key streaming services are coming at a time of uncertainty for both advertisers and TV watchers. Inflation is up, ad spend is down, and while the new Netflix pricing tier is relatively affordable, it’s possible increasing numbers of users will grow more selective with their monthly subscriptions as the list of available streaming platforms continues to expand.
As Netflix represents the largest streamer on the planet, you can expect the introduction of the ad-supported plan to make a significant impact on the CTV landscape. With more than 220 million monthly subscribers to manage, Netflix is reportedly starting relatively small by introducing five minutes of commercials per hour (far below network TV’s 20 minutes per hour). While ads may turn some users to other platforms, the novelty and sheer magnitude of the audience available to advertisers willing to dive in with the streaming giant is undeniable.
Of course, it’s also rumored to carry a hefty price tag. On the heels of HBO Max’s steep bid for $40+ CPMs in 2021, Netflix is rumored to be seeking CPMs around $65 — more than even Disney’s reported figure of $50.
CTV Strategy Moving Forward
CTV ads are a powerful method of introducing brands to attentive audiences, but before buying ads at pricey CPMs it pays to know what you’re getting for your ad dollars. Many potential advertisers are opting for a wait-and-see approach as Netflix works to expand its targeting capabilities, presently described by Adweek as “minimal.”
Access to user location, interests, demographics, and behavioral data is a big part of what’s driving CTV ad spending to roughly $20 billion this year; the sooner Netflix and Disney can deliver those insights to marketers, the more competitive streaming ads will surely become.
In the meantime, CTV ads on established platforms are still one of the more effective strategies at play for digital marketers. Brand awareness and contextual targeting campaigns continue to prove themselves big winners, with more precise targeting and even dynamic, personalized ads making it a strong channel for brands seeking ways to maintain performance in this financial climate and competitive market. While the details have yet to unfold, it’s likely the addition of major TV streamers will push CTV’s trajectory to even greater heights.
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