At long last, it seems there may be an end in sight for the Covid-19 pandemic in the United States. Leaders of states and municipalities that have had some of the strictest lockdown and quarantine measures are announcing their reopening dates. Vaccines aren’t just readily available, you can pretty much walk up and get one now. And, in a move that was a shock to some and a relief to others, the CDC has announced that with a few exceptions, vaccinated American adults can resume lifestyles that they’d think of as “normal.”
Getting back to life as usual means getting back to business as usual. But for those of us who work in the media industry, some things have changed permanently. We just don’t necessarily know what they are yet.
One of the biggest unknowns for our industry is streaming video, which experienced a massive boom as consumers found themselves encouraged to stay at home. That left them with new blocks of free time resulting from a lack of social gatherings, commutes, and leisure activities. But industry analysts predicted, too, that much of this would be temporary. Once lockdowns lifted, they cautioned from the start, trends would return to a baseline.
Now, with full reopenings unfolding in real time, here’s the question for marketers: How should we prepare for consumers’ post-Covid habits? The answer may be simpler than you think. Corporate mergers, tech and device launches, and subscription churn (often fueled by hit shows) will invariably have a collective impact that we can’t quite predict. What we can count on is that the real variable is attention.
In the ad industry, we know our business has always been all about attention (or at least we should). But right now, as we exit an unprecedented surplus of attention thanks to a year of quarantines, lockdowns, and stay-at-home orders, the streaming wars are getting more heated than ever and consumer viewership trends could go in any number of directions. There’s never been a more important time to invest in quality content and experiences.
Where to start? First, we really have to grasp just how massive streaming growth was last year. Subscriptions to streaming services, already on the rise, reached 1 billion worldwide; over 25% of consumers in the U.S. subscribed to at least one new service during the pandemic. With many live sports canceled, many consumers reevaluated why they were keeping a traditional cable subscription around. And quite a few of them decided it wasn’t worth it, as “cord-cutting” hit record highs. Sales of connected TV devices also shattered records, with a spike over the holiday season.
As for advertising? In spite of the fact that many of the biggest streaming services have no advertising, ad-supported services increased their share of the market during Covid, from 28% to 34%.
In other words, when COVID-19 hit, the streaming industry was gifted with unprecedented access to consumer attention — probably more of it than we deserved. Now, there’s renewed competition for that attention, with Americans eager to finally travel, socialize, and spend time with loved ones in person rather than over Zoom.
Whether they’ll ditch one streaming service for another (and if so, which ones) is a big question mark. But consumers will be more discerning with their time and attention, and more than ever, they’ll spend time where their attention is respected.
What does that mean, specifically?
First, attention is up for grabs.
When Covid hit, streaming was already experiencing both skyrocketing consumer growth and some seismic shifts on the business side that gave users even more options for where to spend their attention.
Devices like the PlayStation 5 debuted; services like HBO Max and NBC Universal’s Peacock launched. The announcement of WarnerMedia and Discovery’s $43 billion merger is a reminder that upheaval in the industry — and hence, the potential for changes and upgrades in consumer offerings — is far from over. High rates of subscriber churn mean that loyalty is still anyone’s game.
Second, the connected living room is here to stay.
Some of the most confident predictions about post-pandemic consumer habits have indicated that once people switch from linear TV to streaming, they are unlikely to switch back. Covid cord-cutters, for example, probably won’t resubscribe to their cable bundles (especially since live sports’ presence on streaming continues to grow). And while both linear and connected TV usage rose during the first few months of the pandemic, ComScore found that virtually every household streaming device continued to grow in data usage even after initial lockdowns began to lift. The biggest growth? Smart TVs, which many households had at home but weren’t even using for streaming before.
This is great news for marketers because, to put it simply, connected TV is great at getting consumers’ attention. Our research at true[X] has found that compared to desktop and mobile, an ad on CTV drives more brand lift at every stage of the purchase funnel. But there’s a catch…
Third, the winners will be the ones who respect that attention.
Streaming is the inevitable future of TV, but that doesn’t mean just being on CTV is enough. Subscription churn is still heavy and consumers have many options —including plenty with no ads at all. With time in front of the living room TV facing new competition for attention as the Covid crisis comes to a close, consumers will be more discerning about what they’re willing to put up with. They already didn’t want their attention to be exploited or wasted, and that will only be more pronounced now. That’s why streaming advertising needs to be better — more relevant, less intrusive, and with less volume — than linear TV and desktop and mobile video advertising. Just being on a bigger screen where people tend to sit down and commit to longer content isn’t enough.
If you work in digital media, whether on the advertiser or AVOD publisher side, and you want to keep capitalizing on the streaming boom, this should be what you care about. Are you confident that your ads work, so that you don’t have to rely on high frequency (and annoy viewers in the process)? Do consumers have an experience that they don’t hate? This is the time to answer those questions, and make it more likely that consumers will lend their newly scarce attention to you.