With all of the changes in media consumption habits, especially the rise of streaming, how can advertisers continue to reach audiences? Will more consumers be willing to tolerate commercials in order to save money? Does it make a difference if the ads are more personalized (ex: the addressable TV trend)? Should all streaming services offer an advertising-supported tier for a lower cost? Limit: 15 responses
Erin Fennell
ReplyDeleteBlog #2
Pt. 1
The rise of streaming services created a shift in people's expectations within media content, which directly affects the efficiency of advertising. For years now, people have had negative attitudes towards advertisements. A study from IPG MediaLab showed that “29 percent of TV commercials are not actually seen by viewers” (Raimonde, 2019). People don’t like having their programs interrupted by things that they do not care about, especially if they are paying for it. However, just because audiences don’t like ads, doesn’t mean they cannot be altered and continue being a relevant way for businesses to create revenue. According to a study by Hub Entertainment Research, “almost twice as many consumers prefer tiered subscription services that offer a paid, ad-free option and a free or less expensive ad-supported option. 19% of consumers surveyed chose the service with limited ads (fewer than live TV), while 36% selected the tiered service” (Chorpenning, 2021). Users will tolerate ads that make their service cheaper. It was also found that “with an ad-supported model, consumers are less likely to cut a platform when reviewing their entertainment budget” (Krizelman, 2021).
Additionally, I do think that targeted ads can make a difference when it comes to getting users to pay attention to ads. Looking at NBCUniversal’s Audience Insights Hub integrations, “NBCU bolstered the offering in March with new tools around audience data, personalization and privacy that resonated with buyers” (Cooper, 2021). You see a direct increase in audience experience, showing that personalizing ads can have a positive effect on audiences. In addition, streaming has made consumers more accustomed to immediate satisfaction. We no longer have to wait a week or so for new episodes to come out, so now we expect immediate viewing, and are more aggravated when we must wait. By making ads more enjoyable to watch and more personalized, it will make them feel less intrusive and more informative. We have seen now that people will sit through hours of Tik Tok videos about cleaning products, but don't like watching one advertisement about them made for TV. Making advertisements more entertaining and altering the visual format can increase user engagement. Also, personally, Hulu advertisements that are interactive draw me in. A big aspect to why we don’t like ads is because as a society, we don't like to wait for things. We get bored. Including an interactive aspect, like clicking and reading through the ad, makes a short one or two minutes go by even quicker.
Erin Fennell
ReplyDeletePt. 2
After looking at the data, if streaming services offer a less expensive option with ads, they will get more subscriptions and people will be less likely to drop their service. People like a variety of options almost as much as they like instant satisfaction. Offering an advertisement option helps users get the product for a lower price, but also helps the distributor by getting another source of revenue through the advertisements. Streaming services were made to be personalized for each user based on their content. Streaming is not the same as TV, and therefore the ads should be created and placed for each specific user, and do not need to be generalized like they are for television channels. Streaming has opened so many doors for many industries and the advertising industry will have to become more flexible and personalized for specific demographics if they are going to survive in today's streaming environment.
Work Cited
Chorpenning, A. (2021, July 26). New Study: Consumers Prefer ad-supported streaming tiers to paid subscriptions. The Streamable. Retrieved February 2, 2022, from https://thestreamable.com/news/new-study-consumers-prefer-ad-supported-streaming-tiers
Cooper, M. (2021, July 15). NBCUniversal's peacock lands $500 million in upfront commitments. Campaign US. Retrieved February 2, 2022, from https://www.campaignlive.com/article/nbcuniversals-peacock-lands-500-million-upfront-commitments/1722249
Krizelman, T. (2021, April 9). What hulu's avod success story tells us. Digital Content Next. Retrieved February 2, 2022, from https://digitalcontentnext.org/blog/2021/04/13/what-hulus-avod-success-story-tells-us/
Raimonde, O. (2019, March 19). How often are people in the room when TV ads air? not as much as brands might like, study shows. Ad Age. Retrieved February 2, 2022, from https://adage.com/article/advertising/people-room-ads-air-brands-study-reveals/317022
Vera Helein
ReplyDeleteWith the huge rise of streaming, it has been harder for advertisers to reach audiences. Since a lot of streaming services have ad-free options or don’t have ads at all, most people have become impatient with ads and won’t take the time to watch them. According to a study done by Morning Consult, “about 50% of U.S. adults are bothered by irrelevant ads.” Television has made advertising seem like a bad thing, a lot of times it isn’t correctly tailored to its audience and results in viewers being bothered by them in general (Meyers). I think to curb this problem in the world of streaming, advertisers need to rely on personalized ads. People don’t want to see things that aren’t tailored to their interests or have no correlation in what they are viewing, it defeats the whole point of an advertisement.
I think that subscription tiers are vital to subscription service success. People like options and there isn’t a harm in including a tier set up. I think Hulu has proven that tiered setups for subscriptions are extremely successful, especially with the use of their partnerships as well (Krizelman). Having a tiered setup will allow for more subscribers who may not have the budget to afford a higher subscription with no ads. This also continues to benefit the service by not only gaining more subscribers but profiting off of the use of ads.
The truth is, most people would prefer to have no ads at all, but I think the only way to get people to still see the value in advertising is if the advertisers took the time to make them more personal. According to a Deloitte survey, only one-tenth of respondents preferred ads to be tailored to them (Lee et al.). This seems like a low margin, but I think part of this is that most people have always seen ads as a nuisance because they usually aren’t specifically tailored to someone’s interests. If we are going to continue to have advertising, we need to make it useful.
As aforementioned, I think all streaming services could benefit from having a subscription tier with one that includes ads. This will allow services to garner more subscribers, as we’ve seen with those who have already implemented this idea, as well as get more revenue from advertising. There is no harm with including ads as an option. In a study done by Streamable, 40% of current subscribers would consider switching their subscription to HBO Max to an ad version if it was available, on top of 25% of non-subscribers considering subscribing if it was made an option (Chorpenning). This shows that they would be able to garner more subscribers and increase their already growing audience. This tier option could also allow for newer platforms or platforms that haven’t had as much success to allow new subscribers to try out their services for a lower price before making the switch to ad-free if they enjoyed the service. I think all streaming services should consider this as an option in the future.
Works Cited
Krizelman, Todd. “What Hulu's AVOD Success Story Tells Us.” Digital Content Next, 13 April 2021, https://digitalcontentnext.org/blog/2021/04/13/what-hulus-avod-success-story-tells-us/.
Lee, Paul, et al. “Addressable TV Ads: Targeting for Reach - WSJ.” The Wall Street Journal, 4 January 2022, https://deloitte.wsj.com/articles/addressable-tv-ads-targeting-for-reach-01641310928. Accessed 3 February 2022.
Meyers, Alyssa. “Most Consumers Think Streaming Ads Are Repetitive and Invasive.” Morning Consult, 18 October 2021, https://morningconsult.com/2021/10/18/ad-tech-streaming-services-poll/. Accessed 3 February 2022.
“New Study: Consumers Prefer Ad-Supported Streaming Tiers to Paid Subscriptions.” The Streamable, Aubrey Chorpenning, 26 July 2021, https://thestreamable.com/news/new-study-consumers-prefer-ad-supported-streaming-tiers. Accessed 3 February 2022.
This comment has been removed by the author.
ReplyDeleteMatthew Miller
ReplyDeleteIt is no secret that people are changing the way they consume media, especially with the rise of streaming. As a result, some streaming sites are losing out on potential customers for having advertisements. Netflix is one of the biggest streaming platforms, and a big reason is that they do not have any advertisements. Some streaming sites have ad-free plans that cost a little more than a regular subscription. The question is now, is it worth paying more to get rid of the advertisements. I am not the biggest fan of advertisements, but I understand the importance of having them as it generates revenue for the company. Everyone anticipates that at least one advertisement will be shown during the program when watching live television. The article titled Addressable TV Ads: Targeting for Reach says, “Television advertising, for decades the largest category of advertising in dollar terms, now has the technology to target specific consumer segments in the same way online retailers and social media platforms have been doing for years.” (Lee et al. 2022). Technology is becoming more personalized, so companies will start to target their audience that way. With sports betting recently becoming legal in New York and Connecticut, betting sites such as FanDuel, DraftKings, and Caesars have capitalized on this advertising opportunity. DraftKings is the official betting partner of the NFL, which is why their advertisements are frequently playing during commercials of NFL games. The money these three companies spend on advertising keeps rising as well since “FanDuel, Caesars, and DraftKings spent a combined $314.6 million on advertising last year vs. only $84 million in 2019.” (Mccarthy 2021). Everyone knows that the house always wins when it comes to gambling, so these three companies are willing to spend so much money on advertising because they know that they will make it all back plus more during the NFL season.
I do not know the exact answer of whether consumers will be willing to tolerate commercials to save money. I know plenty of people who despise commercials and plenty of people who love commercials. Take the Super Bowl, for example. The commercials that run during the Super Bowl are running for the first time, attracting many viewers. Many people only watch the Super Bowl for the commercials. I do not think that it makes a difference if the ads are more personalized because they are still ads, regardless of whether they are personalized. I genuinely believe that all streaming services should offer an advertising-supported tier for a lower cost if they are trying to make the most money they can. Even if many people pay the lower price that includes the ads, there will still be people who will pay for the ad-free version. People want to have streaming tiers compared to a single subscription option, and “According to the new study, almost twice as many consumers prefer tiered subscription services that offer a paid, ad-free option and a free or less expensive ad-supported option.” (Chorpenning 2021). These streaming sites will continue to generate much money no matter their decision, but if they want to make the most significant profit, they should listen to their consumers.
Chorpenning, A. (2021, July 26). New Study: Consumers Prefer ad-supported streaming tiers to paid subscriptions. The Streamable. Retrieved February 4, 2022, from https://thestreamable.com/news/new-study-consumers-prefer-ad-supported-streaming-tiers
Lee, P., Evans, A., Aitken, R., & Westcott, K. (2022, January 4). Addressable TV ADS: Targeting for reach. The Wall Street Journal. Retrieved February 4, 2022, from https://deloitte.wsj.com/articles/addressable-tv-ads-targeting-for-reach-01641310928
Mccarthy, M. (2021, September 8). Sports betting operators to spend up to $1 billion on football ads. Front Office Sports. Retrieved February 4, 2022, from https://frontofficesports.com/football-ads-sports-betting-fanduel-draftkings/
Video streaming services have become one of the most popular ways to consume media in the past few years. With the growth of the popularity of streaming services, it has changed the way advertisers has had to reach an audience to get their product out. With a lot of streaming services that don’t have advertisements on their services, it has made it hard for advertisers to advertise their products. Before streaming services became grew and became popular, cable tv was the popular way to watch tv shows and advertisers advertised their products during commercials. According to Variety, “Nielsen’s “commercial ratings” or measures of viewership of ad breaks on TV, have been at the foundation of advertising negotiations between media companies and Madison Avenue.” One of the ways that advertisers can reach audiences is by having more of their ads be put their ads on streaming services that allow commercials to be played like Hulu or Peacock. Another way for them to reach an audience according to The Business Journals, they can used sponsored direct messages to reach a new audience. One way to help reach an audience also is using targeted ads or individual ads for people. According to Variety, “as we move to a world where linear television is becoming more addressable, it’s important to post on the individual ads that were served.” Even with the growth of ad free streaming services, people are still willing to pay less money to watch ads. According to The Streamable, “twice as many consumers prefer tiered subscriptions service that offer a paid, ad-free option and a free or less expensive ad-supported option.” People want to save as much money as they can when it comes to entertainment. Also, from The Streamable, it states that, “more affordable ad-supported services also appeal to non-subscribers.” People who aren’t subscribed to a streaming service think that spending less money and watching a few ads is much better than spending a few more dollars without watching ads.
ReplyDeletePersonalized ads do make a huge difference for the consumers, and it will help advertisers reach more of an audience. According to Adlucent, who did a research study on personalized ads, said, “71% of respondents said they would prefer ads that are more tailored to their personal interests and shopping habits.” Also from their study, they found that, “75% prefer fewer ads that are aligned to their needs.”(Adlucent) It seems that consumers want a personal connection to that ads and companies can greatly benefit if they decided to make more personal ads for people. All streaming services should offer an advertising-support tier at a lower cost. The data does show that people are wanting to spend less and save money when it comes to getting subscriptions to streaming services. Having an option for advertising-support tier does not really hurt the streaming services because people are still wanting to sign up for streaming services. I also believe streaming services like Netflix would make a lot of money if they did have advertisements and it could potentially help them get out of debt. It will be interesting to see if the major ad-free streaming services make an advertising-support tier.
Delete“71% Of Consumers Prefer Personalized Ads.” Adlucent, https://www.adlucent.com/resources/blog/71-of-consumers-prefer-personalized-ads/.
Bizjournals.com, https://www.bizjournals.com/bizjournals/news/2021/04/23/five-effective-strategies-for-reaching-audiences-in-the-digital-age.html.
Chorpenning, Aubrey. “New Study: Consumers Prefer Ad-Supported Streaming Tiers to Paid Subscriptions.” The Streamable, The Streamable, 26 July 2021, https://thestreamable.com/news/new-study-consumers-prefer-ad-supported-streaming-tiers.
Cooper, Mariah. “NBCUniversal's Peacock Lands $500 Million in Upfront Commitments.” Campaign US, Campaign, 15 July 2021, https://www.campaignlive.com/article/nbcuniversals-peacock-lands-500-million-upfront-commitments/1722249.
Steinberg, Brian. “Nielsen Plans Overhaul for Commercial Ratings, Will Track Viewers for Specific Ads.” Variety, Variety, 22 Nov. 2021, https://variety.com/2021/tv/news/nielsen-tv-commercial-ratings-overhaul-viewers-streaming-1235116960/#recipient_hashed=62dfc0b27ad1de67d64a0c44fb55f17fe8a7cd610e9d3f50edf2cced899812f7.
“TV Networks Are Mad at Nielsen. Can That Company Still Count in the Streaming Age?” Los Angeles Times, Los Angeles Times, 13 Dec. 2021, https://www.latimes.com/entertainment-arts/business/story/2021-12-13/nielsen-tv-ratings-streaming-nbc-david-kenny.
Abigail Rica
ReplyDeleteI believe the media will always be evolving. It's just the world we live in, with all of these streaming services. There are hundreds of ways to get a consumer to purchase your streaming platform. Is it the fact that you have low rates and ads, or you have a specific TV show that's all the hot buzz right now. According to one source, “ It’s not just the tiered model that set Hulu up for success, Hulu has also made a number of strategic and competitive partnerships to take on other streaming giants. Of note, in 2019, Disney acquired 21st Century Fox, which included the 30% stake Fox had in Hulu, giving them a 60% stake. This meant investment in original programming increased significantly”. (Krizelman,, T. (2021, April 9). What hulu's avod success story tells us. This shows a service like Hulu is committed to making their customers happy and offering variety. Ads are the reason companies can attract new audiences. Another source states ,” The cost of creating a TV ad likely needs to fall to enable more advertisers to participate. Addressable technology enables companies to experiment with smaller campaigns reaching selected audiences, an approach well suited to smaller advertisers and larger companies new to advertising”. (Dow Jones & Company. (2022, January 4). Addressable TV ADS: Targeting for reach. The Wall Street Journal. )
In addition this source states, “ Streaming TV advertising refers to running paid advertisements on streaming services such as Hulu, Amazon Prime Video, or Youtube TV. These ads typically run in either 15 or 30 second segments, with up to 96% view rates, proving them to be an extremely effective form of advertising, Even more, streaming ads can claim to boost brand perception by 32% more than traditional TV. In addition, more than 40% of the streaming audience was not reached by traditional TV ads. With addressable, behavioral, and demographic targeting options- combined with the opportunity to include various segments to meet business’s target audience(s)- advertising on streaming TV has proven itself to be a powerful advertising method”. (Media Venue. (2020, October 26). Take advantage of advertising on streaming TV) I think streaming services should offer a platform with ads that cost less. It almost in a way tricks users into keeping it, because it's cheaper and not quite ten dollars a month.
That way they can get their services to even more users. According to this source, “ Platforms that offer tiered options, including a much cheaper or free ad- supported version, will emerge victorious. With an ad- supported model, consumers are less likely to cut a platform when reviewing their entertainment budget. Hulu is ahead of the pack as it already has a tiered model with an ad- supported offering at a mere $5.99 per month”. (Krizelman,, T. (2021, April 9). What hulu's avod success story tells us. Digital Content Next. )
Work cited
Dow Jones & Company. (2022, January 4). Addressable TV ADS: Targeting for reach. The Wall Street Journal. Retrieved February 6, 2022, from https://deloitte.wsj.com/articles/addressable-tv-ads-targeting-for-reach-01641310928
Krizelman,, T. (2021, April 9). What hulu's avod success story tells us. Digital Content Next. Retrieved February 6, 2022, from https://digitalcontentnext.org/blog/2021/04/13/what-hulus-avod-success-story-tells-us/
Media Venue. (2020, October 26). Take advantage of advertising on streaming TV ⋆ Media Venue, Traditional & Digital Marketing ⋆ (502) 855-4783. Media Venue. Retrieved February 6, 2022, from https://www.mediavenue.com/take-advantage-of-advertising-on-streaming-tv/
Elisa Leone
ReplyDeletePart 1
Since the rise of streaming services, it can be more difficult for companies to advertise themselves efficiently. There has always been a negative stigma around ads during tv-shows according to the audience. Companies are struggling to effectively run ads on streaming platforms because viewers usually skip or just don't watch them. Some streaming services like Netflix, don't even have the option within their subscription packages to have advertisements within their programs. Usually, some streaming platforms have cheaper subscriptions that includes having advertisements which can be ideal for some users. A new study about which subscriptions customers prefer was discussed in the article, “Consumers Prefer Ad-Supported Streaming Tiers to Paid Subscriptions”. This article states, “...Almost twice as many consumers prefer tiered subscription services that offer a paid, ad-free option and a free or less expensive ad-supported option. 19% of consumers surveyed chose the service with limited ads while 36% selected the tiered service” (Chorpenning). It is no surprise that customers will pay less to have ads within their favorite programs. Since the percentage of people who are willing to pay less to have ads is higher, I predict in the future this will only increase. I have Spotify premium and with that, comes a free Hulu subscription with ads included. Since the Hulu subscription is free, I don’t mind watching the ads.
For advertisers to succeed, I think they should customize ads to their consumer’s liking. Although this may be difficult, I believe that targeting certain people with advertisements that actually interest them will get more clicks and engagement. The Wall Street Journal states, “…like many markets, addressable TV advertising needs a full-fledged supporting ecosystem to flourish, and that ecosystem has not yet developed. The necessary elements include the way addressable TV ads are measured, aggregated, sold, and created” (Lee & Evans). There are a lot of elements that go into targeted ads, especially tv ads because video production is expensive and time-consuming.
Elisa Leone
DeletePart 2
I believe that in the future, all streaming services should offer an advertising-supported tier for a lower cost. A lot of research backs up that consumers would rather pay the lower prices and still have the advertisements. The Hollywood Reporter states, “Twenty-five percent of respondents also said they added an ad-supported paid subscription in the past year, while nearly a third of respondents said they added a new ad-supported free streaming service to their entertainment diets” (Chan). Consumers are willingly choosing the cheaper option even if there are ads. I think advertisers should take advantage of this while they can since viewers are essentially paying to watch ads. In the future, all streaming platforms should have this option and I think consumers will conform quickly because it is familiar and cheaper.
Work Cited
Chan, J. Clara. “Consumers Don't Mind Ads If They Get Lower Streaming Subscription Prices, Study Says.” The Hollywood Reporter, The Hollywood Reporter, 9 Sept. 2021, https://www.hollywoodreporter.com/business/digital/roku-nrg-streaming-study-avod-1235010154/.
Chorpenning, Aubrey. “New Study: Consumers Prefer Ad-Supported Streaming Tiers to Paid Subscriptions.” The Streamable, The Streamable, 26 July 2021, https://thestreamable.com/news/new-study-consumers-prefer-ad-supported-streaming-tiers.
Lee, Paul, and Andrew Evans. “Addressable TV ADS: Targeting for Reach.” The Wall Street Journal, Dow Jones & Company, 4 Jan. 2022, https://deloitte.wsj.com/articles/addressable-tv-ads-targeting-for-reach-01641310928.
Kylie Jenkins Part 1
ReplyDeleteTraditionally, it was very easy for companies to advertise. Before streaming services, people watched television on cable, and there were plenty of opportunities for companies to advertise during commercial breaks. However, now that streaming services are gaining popularity, and in my opinion, could be considered the new norm for watching television and movies, it is more difficult for companies to advertise. Some streaming services offer options for people to access their content without having to watch advertisements, which then completely cuts out the advertisers opportunities to advertise. With the rapid climb in streaming service subscribers, advertisers will have to get creative about how they will reach different groups of people.
With the subscription services that do not have an option for a service with advertisements, companies will have to get creative in order to reach their audience. They can utilize social media to advertise, to reach the audience that uses streaming services without advertisements. According to an article from utm.io, advertising on social media is a great way for companies to reach a target audience for a cheaper price because a company would “be spending [their] money only to reach the most relevant target audience”(McGaw). They can also really prioritize getting ads on the streaming services that do offer an option for advertising.
I think that consumers will be willing to tolerate commercials in order to save money, but it all depends on the platform. Most consumers will be willing to spend a higher amount of money per month or per year to a subscription service that has all the content they want, and when they do this, they typically stop subscribing to other streaming services that don’t have as much desirable content. According to an article from Digital Context Next, “Platforms that offer tiered options, including a much cheaper or free ad-supported version, will emerge victorious. With an ad-supported model, consumers are less likely to cut a platform when reviewing their entertainment budget”(Krizelman). Many customers are subscribed to multiple streaming services, and when looking over which services to remain subscribed to, they will continue subscribing if the price is very low. The article gave the example of Hulu, which has a subscription plan that costs only $5.99 a month, an amount that most people will reasonably pay a month, even if they don’t use the streaming service a lot.
Kylie Jenkins Part 2
DeletePersonalized advertisements absolutely make a difference, and are a game changer. As a subscriber to streaming platforms, I would not mind advertisements that are about things I am interested in. According to Carrie Drinkwater, who is the chief investment officer of Mediahub, “bigger no longer means better. Strategic thinking and creative solutions have trumped clout for marketplace leverage”(Lynch). That being said, companies have to focus more on the quality of the advertisement, versus the quantity of advertisements they make. I think that all streaming services should offer an advertising-supported tier for a lower cost. It allows for companies to market their service towards a wider audience, because some people may not be able to afford a more expensive streaming service.
Krizelman, Todd. “What Hulu's Avod Success Story Tells Us.” Digital Content Next, 9 Apr. 2021, https://digitalcontentnext.org/blog/2021/04/13/what-hulus-avod-success-story-tells-us/.
Lynch, Jason. "TV Ad Sales Chiefs and Buyers on the Marketplace’s Biggest Changes in 2021". adweek.com, December 21, 2021. advance-lexis-com.libraryproxy.quinnipiac.edu/api/document?collection=news&id=urn:contentItem:64C0-8NB1-JC8H-T1X3-00000-00&context=1516831. Accessed February 6, 2022.
McGaw, Dan. “11 Of the Biggest Benefits of Social Media Advertising Business Owners Need to Know.” UTM.io, 7 June 2019, https://web.utm.io/blog/benefits-of-social-media-advertising/.
Katie Mone
ReplyDeleteThese are all very valid topics to consider. Streaming has taken over the 2010s and 2020s and it doesn’t look to be going away anytime soon. Many streaming services are completely ad-free, others offer an ad-free option, and the rest are strictly ad-only. However, an increasing amount of streaming services are lessening their ad component or completely eliminating it. For instance, companies like Netflix and Disney+ are completely ad-free and always have been. I believe this is key to success for these streaming services, giving subscribers the idea that they are getting a better deal.
While many consumers are under this impression that they’re scoring better with completely ad-free services, a recent study from The Streamable argues that they actually prefer ad-supported streaming in their subscriptions. “Almost twice as many consumers prefer tiered subscription services that offer a paid, ad-free option and a free or less expensive ad-supported option. 19% of consumers surveyed chose the service with limited ads (fewer than live TV), while 36% selected the tiered service” (Chorpenning). This just goes to show how much of an influence advertising has on streaming services as well as consumer opinion. Additionally, ad-supported streaming services that are more affordable appeal more to non-subcribers in the process of choosing services.
Jon Giegengack, Principal at Hub Entertainment Research, says, “It’s true that some TV viewers will do almost anything, including paying a premium, to avoid ads. But there are many who will choose ad-supported TV if it saves money or lets them watch a show they can’t watch somewhere else” (Chorpenning). This holds true. People prioritize saving money and will always ask, “What’s in it for me?” For example, many people started paying for Peacock, an ad-based streaming service, when it obtained The Office last year after the show left Netflix, an ad-free service. When the content is valuable enough, people will make sacrifices. Consumers will agree to watch some commercials if they can watch their favorite TV show or movie. After all, that is how it used to be with cable!
Now, if we get down to the nitty gritty of the content of the actual advertisement as well as the ad medium, this is where it can be interesting. A Wall Street Journal article discusses the importance of “addressable ads” and how targeting specific audiences and making advertising more personal can make all the difference in terms of viewership and subscriptions. Utilizing platforms beyond TV can widen the reach of ads. “By adding in viewers on advertising-funded video on demand (VOD) platforms, social media, or even video games whose content is watched mostly or wholly online” (“Addressable TV Ads: Targeting for Reach”).
DeleteUnlike traditional TV, streaming TV has the advantage of precision targeting when it comes to advertising. This advantage of being able to target based on specific demographics and interests gives streaming services a huge leg-up, and it’s something that every streaming platform should utilize. “Streaming TV advertisers garnering higher rates of engagement as they are serving ads that are more relevant to the targeted audience” (Burns, “Streaming TV Advertising: What You Need To Know”). I believe that all streaming services should offer a less expensive, ad-supported tier. Netflix has always been very well-known as an ad-free streaming company. There is no telling what the future may look like for streaming advertising, but if these companies if they had a cheaper component with ads, it could benefit them tremendously.
Works Cited
“Addressable TV ADS: Targeting for Reach.” The Wall Street Journal, Dow Jones & Company, 4
Jan. 2022,
https://deloitte.wsj.com/articles/addressable-tv-ads-targeting-for-reach-01641310928.
Burns, Cam. “Streaming TV Advertising: What You Need to Know.” Shuttlerock Blog,
https://blog.shuttlerock.com/streaming-tv-advertising-what-you-need-to-know.
Chorpenning, Aubrey. “New Study: Consumers Prefer Ad-Supported Streaming Tiers to Paid
Subscriptions.” The Streamable, The Streamable, 26 July 2021,
https://thestreamable.com/news/new-study-consumers-prefer-ad-supported-streaming-ti
ers.
Allison Kelleher
ReplyDeleteBlog 2
Part 1
The media industry is constantly changing consumption habits for consumers, especially with the rise of popularity in streaming services. This means that the various streaming platforms are forced to stay relevant and compete for subscribers as more and more households cut the cord to cable. This creates an obstacle for brands to find new ways to reach their audiences since the standard advertisements on cable TV are fading out. In fact, according to the Wall Street Journal, television advertising has been the largest category of advertising in dollar terms for decades. Companies now have to figure out which streaming platforms will be the best fit for their brand to play advertisements on. However, advertisers can take advantage of this switch in media consumption and capitalize by utilizing “the technology to target specific consumer segments in the same way online retailers and social media platforms have been doing for years” (“Addressable TV Ads”). This allows advertisers to personalize their commercials to a more niche audience since streaming services are broken down by singular users, unlike cable TV which was more aimed towards the whole household. As the Wall Street Journal notes, the concept of addressable TV ads would allow more people to see the same ad by aggregating audiences from across multiple platforms.
Allison Kelleher
DeletePart 2
In my opinion, consumers will be willing to tolerate commercials in order to save money. Especially since college aged consumers utilize streaming platforms, viewing a few ads here and there is worth it in order to save money on multiple subscriptions. In addition, older consumers will not mind either even though they have a more disposable income to spend more. Older generations are used to dealing with commercials from watching cable television. If anything I think advertisements give the viewer a chance to take a break and grab a snack and go to the bathroom while watching their entertainment of choice. In fact, 58% of consumers are willing to tolerate ads if they get a discount on the price of a subscription service (Lafayette). Which brings me to my next point, it is important for streaming platforms to offer an advertising-supported tier for a lower cost. This allows the consumer to be in control of their media consumption and make the decision whether or not they wish to pay more to avoid commercials or not. This has already been deemed to be successful based on Hulu’s tiered options. “Consumers are less likely to cut a platform when reviewing their entertainment budget” (Krizelman). In other words, by putting the consumer in control to choose a cheaper option with the cost of ads, they feel as though they are saving money when putting it into perspective of their other streaming subscription fees.
Works Cited
“Addressable TV ADS: Targeting for Reach.” The Wall Street Journal, Dow Jones & Company, 4 Jan. 2022, https://deloitte.wsj.com/articles/addressable-tv-ads-targeting-for-reach-01641310928.
Lafayette, Jon. “Viewers Willing to Tolerate Ads, Even on Netflix, Hub Study Finds.” Broadcasting Cable, Broadcasting+Cable, 25 June 2021, https://www.nexttv.com/news/viewers-willing-to-tolerate-ads-even-on-netflix-hub-study-finds.
Krizelman, Todd. “What Hulu's Avod Success Story Tells Us.” Digital Content Next, 9 Apr. 2021, https://digitalcontentnext.org/blog/2021/04/13/what-hulus-avod-success-story-tells-us/.
The changes in media consumption, especially with the rise of streaming, advertisers need to continue to evolve with consumers to successfully reach their target demographic. Platforms that offer tiered options, including a much cheaper or free ad-supported version, will emerge victorious, such as Hulu (Krizelman). By giving subscribers the option to pay a more affordable price for an AVOD platform, they are less likely to cancel the subscription over a more expensive subscription with a streaming platform, like HBO. Although the company may be losing revenue due to the low subscription price, they successfully earn their revenue back through advertisers including DraftKings, Samsung, Verizon, Taco Bell, T-Mobile, HelloFresh and more (Krizelman). As an ad-supported subscriber to Hulu, I am happy with my subscription and would rather pay the cheaper cost instead of the ad-free option. More streaming services would benefit from offering an Ad supported tier to earn back revenue, especially Netflix, in my opinion. The streaming service tends to prioritize quantity over quality, and it is showing through their financials and leading to increasing debt. If Netflix were to offer a cheaper ad-supported streaming option, they will have a chance of earning back revenue and bringing in more subscribers simultaneously. According to James Brumley’s article, “Seriously, Netflix Should Think About an Ad-Supported Tier”, “A survey of around 3,000 U.S. consumers by Hub found that 58% of them would prefer an ad-supported streaming service if it lowered the monthly price of that service by $4 to $5.” More than half of the participants would rather pay less for streaming with advertisements, leading me to believe that most consumers will be more than willing to tolerate commercials for a cheaper price, especially if it is their choice.
ReplyDeleteWe know that many consumers would like to pay the cheaper price for a subscription with ads, but now we must ask the question if the ads are targeted to the desired demographic successfully? Television advertising now has the technology to target specific consumer segments in the same way social media platforms have been doing for years (Deloitte). Although advertisers can market advertisements through specific segments to reach its preferred audience, it doesn't ensure that it is accurate or effective to the audience. According to one Deloitte survey, “only one-tenth of respondents strongly preferred ads to be tailored, while two-thirds did not want customized messages or were indifferent” (Deloitte). Based on this data, one could argue that personalized ads do not tend to make a difference to the viewer.
DeleteMoreover, based on the data analyzed, I think that more streaming services would benefit from offering an ad-supported subscription option to reach the demographic of those who would opt to pay less for the same content.
Lee, Paul, et al. “Addressable TV ADS: Targeting for Reach.” The Wall Street Journal, Dow Jones & Company, 4 Jan. 2022, deloitte.wsj.com/articles/addressable-tv-ads-targeting-for-reach-01641310928.
Krizelman, Todd. “What Hulu's Avod Success Story Tells Us.” Digital Content Next, 9 Apr. 2021, digitalcontentnext.org/blog/2021/04/13/what-hulus-avod-success-story-tells-us/.
Brumley, James. “Seriously, Netflix Should Think about an Ad-Supported Tier.” The Motley Fool, The Motley Fool, 1 July 2021, www.fool.com/investing/2021/07/01/seriously-netflix-should-think-ad-supported-tier/.
With traditional media such as cable television and big-screen movie theaters slowly becoming obsolete, the advertising companies have had no choice but to get creative in the ways in which they reach their audiences. Streaming, which is many people’s preferred method of consumption, has given advertisers a new outlet to present these advertisements. Ad supported services, or AVOD, have started to creep in on streaming services that are competing with Netflix. According to Neilson, “a third of U.S streaming households use an AVOD service today” (Krizelman, 2021). AVOD services are typically less valued than services that don’t have any advertisements. However, as prices for streaming increase, streaming services have the opportunity to offer ad-supported subscription plans. Examples such as Hulu have shown how this can be a very successful business plan. Hulu is well known for offering an ad-supported bundle and having major success with it.
ReplyDeleteIn a new study done, “almost twice as many consumers prefer tiered subscription services that offer a paid, ad free option and a free or less expensive ad supported option” (Chorpenning, 2021). With streaming becoming the preferred method for consumption of TV and movies, saving money is a legitimate concern for some consumers. Specifically, Hub Entertainment Research reported that “consumers are now subscribed to an average of six streaming services”
(Chorpenning, 2021). Given the costs of each streaming service, tiered subscription options should be offered for those looking for save money of services they may not use as much but still want to enjoy. This reason alone should make streaming companies feel compelled to begin offering more services, but if it doesn’t, the option may greatly benefit a streaming platform as ads in this programming become more valuable. In a study done by the Hollywood Reporter, out of 3,000 respondents “70% said they were willing to pay for AVOD if it meant monthly subscription costs would be lower” (Chan, 2021). Additionally, “a third of respondents said they added a new ad-supported streaming service to their entertainment diet” (Chan, 2021) because they were able to afford it among their higher priced counterparts. Because of this, I do think that all streaming services should offer an advertising supported tier. This will bring in a wider range of consumers and ultimately contribute to making the service more inclusive yet competitive in its pricing.
When it comes to the type of advertisements that are being shown, I don’t think it necessarily matters if the ads are targeted or not because I think that most consumers do not like advertisements at all. According to a study from the Morning Consult, 79% of people are bothered by advertisements altogether. Interestingly enough, 51% of people said that they were bothered because the ads were irrelevant, while 64% said that ads that were targeted were “invasive” (Meyers, 2021). With this being said, it likely does not make a difference if the ads are targeted or not because of the studies showing that the vast majority of people do not want ads even if they are personalized. When talking about targeted ads, Lee says, “Driving immediate sales from a single device, however, is less suited to TV” and that “some people may prefer their ads without customization” (Lee, 2021). Overall, I think there are too many varying opinions on the type of advertisements for it to be empirical evidence of what brands should show.
ReplyDeleteWorks Cited
Chan, J. C. (2021, September 9). Consumers don't mind ads if they get lower streaming subscription prices, study says. The Hollywood Reporter. Retrieved February 8, 2022, from https://www.hollywoodreporter.com/business/digital/roku-nrg-streaming-study-avod-1235010154/
Chorpenning, A. (2021, July 26). New Study: Consumers Prefer ad-supported streaming tiers to paid subscriptions. The Streamable. Retrieved February 8, 2022, from https://thestreamable.com/news/new-study-consumers-prefer-ad-supported-streaming-tiers
Consumers think streaming ads are repetitive and invasive. the industry says it's fixing it. Morning Consult. (2022, February 2). Retrieved February 8, 2022, from https://morningconsult.com/2021/10/18/ad-tech-streaming-services-poll/
Dow Jones & Company. (2022, January 4). Addressable TV ADS: Targeting for reach. The Wall Street Journal. Retrieved February 8, 2022, from https://deloitte.wsj.com/articles/addressable-tv-ads-targeting-for-reach-01641310928
What hulu's avod success story tells us. Digital Content Next. (2021, April 9). Retrieved February 8, 2022, from https://digitalcontentnext.org/blog/2021/04/13/what-hulus-avod-success-story-tells-us/
Streaming services have been very popular by demand from consumers which have resulted in difficulty when it comes to advertisements. With the media constantly changing and evolving, it is important for advertisers to find more efficient ways to reach their audiences. All the different streaming services offer varying tiered options, including a much cheaper or free ad-supported version (What hulu’s, 2021). Due to this, audiences have not been able to be reached in ways that people with ad subscriptions are. For example, Disney+ and Netflix are 2 services that offer only ad-free options and have been very successful in subscribers and revenue. In order for these services to reach a wider audience, they could offer ad options at a lower subscription cost to have a better chance of engagement from consumers.
ReplyDeleteOver the past several years, there has been a lot of negative attitudes towards the idea of commercial advertisement. For this reason, streaming services have added ad-free options and a lot of consumers tend to pay the extra money for it. According to a study by Aubrey Chorpenning, “almost twice as many consumers prefer tiered subscription services that offer a paid, ad-free option and a free or less expensive ad-supported option.” I personally believe that if consumers were given the option, they would prefer no ads at all. The study also showed that 61% of consumers would keep their current HBO Max ad free plan for $14.99 instead of switching to their new ad-supported plan for $9.99. This goes to show that consumers wouldn’t mind paying the extra money if it means no interruptions during their viewings.
The biggest way to advertise to a certain audience is to appeal to a more personal, emotional side. Consumers like to feel that they can connect to an advertisement because that will give them a greater chance to engage and react towards the ad. An article from TheViewPoint states, “Emotional targeting allows advertisers to interact with audience groups in order to spark certain feelings by using special ‘triggers’ that activate specific parts of our brain.” Targeting advertisements to the personal and emotional level of the consumers will help increase the chance of a reaction and interaction. When it comes to addressable tv ads, different ads are shown to different households who are all watching the same programing (Dow Jones, 2022). This method overall benefits advertisers who engage with on demand platforms and provide advertising-funded video on demand.
I think it could benefit more services if they chose to include ad-supported tiers at a lower cost than their ad-free tiers. This will give an easy option to gain new subscribers and the opportunity to target new ones. In the study by Chorpenning, “40% of current subs would consider switching to the ad-supported tier. But a quarter of target non-subscribers would consider signing up.” By using ad-supported tiers, consumers are given the option to save money while still being able to subscribe to their go-to streaming services. In the end, the streaming service will overall benefit from more options with varying price ranges.
Works Cited:
Chorpenning, A. (2021, July 26). New Study: Consumers Prefer ad-supported streaming tiers to paid subscriptions. The Streamable. Retrieved February 8, 2022, from https://thestreamable.com/news/new-study-consumers-prefer-ad-supported-streaming-tiers
Dow Jones & Company. (2022, January 4). Addressable TV ADS: Targeting for reach. The Wall Street Journal. Retrieved February 8, 2022, from https://deloitte.wsj.com/articles/addressable-tv-ads-targeting-for-reach-01641310928
The power of emotional targeting in advertising. TheViewPoint. (2021, November 29). Retrieved February 8, 2022, from https://theviewpoint.com/insights/blog/the-power-of-emotional-targeting-in-advertising/
What hulu's avod success story tells us. Digital Content Next. (2021, April 9). Retrieved February 8, 2022, from https://digitalcontentnext.org/blog/2021/04/13/what-hulus-avod-success-story-tells-us/
Julianna Kessel
ReplyDeleteBlog 2
We briefly discussed this in class last week, talking about Netflix. I found the conversation to be very interesting because Netflix’s brand is all about being able to binge anything as immediately as possible, however Netflix is losing the opportunity to make money by doing just this. They do not include any advertisements during any show they offer for streaming, and they don’t advertise for the Netflix brand either. But this is Netflix’s entire brand- offering the widest range of programming with no ads, but at what cost? Will Netflix need to start incorporating ads into their product to compete with competitors, and will consumers be happy with this possible change? The truth is, some people nowadays are really not too happy when an advertisement interrupts their streaming content, and that’s why they are so loyal to Netflix. In an article done by The Streamtable, they concluded that almost twice as many consumers prefer services that offer a paid, ad-free option and/or a cheaper, or free ad-supported option (Chorpenning, 2021). The Chorpenning article quotes that some people will “‘do almost anything, including paying a premium, to avoid ads’” (Chorpenning, 2021). But according to Neilson, about ⅓ of streaming households have AVOD streaming, so how are numbers for AVOD streaming still growing so rapidly when there is data showing that consumers will pay just about anything to get rid of them (Krizlemen, 2021)? It has a lot to do with the content that’s being provided.
Let’s look at Hulu’s tiered subscription model and strategic partnerships: Hulu has tier-based subscriptions, where they start consumers off with a $5.99 a month ad-supporting subscription (Krizleman, 2021). In comparison to its competitors, $5.99 is cheap. But Hulu knew that they had to find a way to keep this new wave of anti-ad, Netflix- watching consumers happy, and keep their service alongside their competitors. Hulu has strategically partnered with platforms to do so. Their best partnership, in my opinion, is with Spotify. Hulu partnered with Spotify in 2018, giving their consumers an extremely discounted rate for access to both platforms (Krizlemen, 2021). (I actually have this bundle myself) Additionally, the Disney-21st Century Fox merger in 2019 gave those two platforms a 60% stake in Hulu, so Hulu original content investments increased dramatically after that (Krizleman, 2021). Also, in early 2021, Hulu partnered with ViacomCBS, which includes distribution of shows from CBS Sports Network, Pop TV, Smithsonian Channel, Showtime, and the CW (Krizlemen, 2021). And, Hulu subscribers generally get this content the day before it comes out on TV (Krizleman, 2021). Hulu now offers bundles with Disney+, ESPN, and Live TV with and without ads. So, where Netflix consumers are happy with the wide range of movies, Hulu consumers are happy to pay for the better selection of current TV shows and slightly better quality, but not as many movies as Netflix. Also 60% of advertisers for Hulu are ONLY advertising on Hulu, creating a more personal, unique, all-around better experience for the viewer (Krizleman, 2021). Hulu keeps their consumers so satisfied through their quality content that they are willing to sit through ads, or pay extra not to do so.
Part 2
ReplyDeleteThis brings me back to our question of what should Netflix do? Does Netflix have the content and consumer base that will make consumers sit through ads, like Hulu watchers do? I think they definitely do, as the leading streaming service site. Hulu actually makes more on ad-supporting subscribers than ad-free (Bowman, 2021). As domestic subscriber rates slow down and CTV ramps up, I think it is Netflix’s best option to offer an ad-tier subscription plan to their site, as they have already built relationships with consumers and brands. So long term, I think all streaming services will revert to ad-based options to keep their streaming service in the running.
References:
Bowman, J. (2021, April 23). 3 reasons Netflix should get into advertising. The Motley Fool. Retrieved February 8, 2022, from https://www.fool.com/investing/2021/04/23/3-reasons-netflix-should-get-into-advertising/
Chorpenning, A. (2021, July 26). New Study: Consumers Prefer ad-supported streaming tiers to paid subscriptions. The Streamable. Retrieved February 8, 2022, from https://thestreamable.com/news/new-study-consumers-prefer-ad-supported-streaming-tiers
Krizleman, T. (2021, April 9). What hulu's avod success story tells us. Digital Content Next. Retrieved February 8, 2022, from https://digitalcontentnext.org/blog/2021/04/13/what-hulus-avod-success-story-tells-us/