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3 Lingering Myths About the Streaming Ad Opportunity

3 Lingering Myths About the Streaming Ad Opportunity

Over the last few years, streaming has become a cultural force – changing the way entire segments of the population navigate and consume TV. Seventy-nine percent of people now report using streaming services to watch TV, according to a recent MRI Simmons Cord Evolution Study. Another study by eMarketer reported that 2.5 billion hours were streamed last year in 2020 – equivalent to a 1.9x increase year-over-year.

Yet, despite its vast potential as an emerging advertising platform for brands and marketers, streaming ad spend continues to lag behind. More than 90% of all video budgets still go to linear and cable ad platforms. Why? Advertisers still have apprehension about how to effectively integrate streaming ad inventory into their existing campaign strategies, according to a new streaming report by Tubi.

“Again and again, many advertisers cite concerns about quality and frequency and scale – which makes it difficult to incorporate streaming inventory in a well-organized fashion,” said Melinda Staros, director of audience research at Tubi. “Advertisers do recognize that the streaming audience is one they need to tap into, but they have been wary to make the shift because of technical or organizational uncertainty.”

As advertising-supported video on demand (AVOD) content is projected to continue to flood the market in 2021, now is a critical time for advertisers to develop advertising strategies that follow viewers to their new TV homes. However, they will first need to overcome their lingering concerns about the AVOD ecosystem. Here are three of the primary myths that haunt AVOD advertising and how advertisers can navigate them to drive more effective, efficient TV campaigns.

Myth #1: The streaming audience is too fragmented – it doesn’t provide enough scale.

It’s true that TV audiences have become more fragmented in the streaming era. But the fundamental changes in viewing behavior that have accompanied this fragmentation mean it’s more important than ever to find new ways to integrate streaming inventory.

In many ways, streaming inventory provides the perfect complement to traditional linear advertising – delivering access to younger, more digitally savvy viewers who may not be reachable through linear channels.

For example, 80% of Tubi’s audience is unreachable on the top-25 cable TV networks, according to the Tubi 2021 streaming report. This makes it a powerful digital channel to generate incremental reach to key target audiences.

“It isn’t an either/or problem,” Staros said. “If you want to reach the full TV audience, you have to look at how you can bring linear and streaming together to build the full audience scale that you are looking for.”

Myth #2: Streamers aren’t as engaged with video content as their linear TV counterparts, which makes AVOD advertising less impactful.

Early on, streaming TV often meant users were watching on mobile devices – computers, tablets and smartphones. But as smart TVs and streaming plugins like Chromecast and Roku gain momentum, this is an outdated understanding of the streaming experience.

“What we are actually finding with streamers is that they are very engaged,” Staros said. “In 2021, streaming means watching on big screens and with other people – just like the traditional linear cable TV viewer.”

In fact, according to the report, 84% of people who watch Tubi streaming content do so in their living room on a TV screen. Additionally, 85% of Tubi households have at least two viewers.

As a result, most advertisers who spend on streaming alongside linear spending rated it as equal or more effective than linear campaigns alone. The ability to connect to real-world conversions and other digital actions also makes it easier for advertisers to demonstrate ROI at a more granular level than cable TV often allows.

Myth #3: I don’t know where my ads will run, and I can’t control frequency.

According to the Tubi report, nearly two out of five advertisers say they’d invest more if it was easier to manage frequency. Over-serving viewers not only wastes precious ad spend, but it can also have a negative effect on viewers – damaging brand reputation and sentiment scores over time.

While a handful of forward-thinking platforms have managed to crack this code, many platforms do still struggle to meet advertiser expectations for frequency caps. The key to investing in streaming inventory with confidence is understanding and finding the AVOD platforms that have focused frequency management tools.

For example, Tubi’s Advanced Frequency Management (AFM) tool not only offers advertisers greater control over the frequency of direct buy ads, but it can also account for other ads that have been purchased programmatically. In the fragmented digital ecosystem, where buying and selling takes place both directly and through a network of DSPs, this helps ensure that ad spend is maximized across a full audience demographic.

“This kind of control creates a much cheaper experience for advertisers,” Staros said. “In many cases, frequency controls like AFM can help make it 20% cheaper per viewer – enabling your spend to go farther and do more. In an ROI-driven landscape, even small efficiency gains can make a big difference.”

(source)