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Do advertisers fully understand the impact of streaming video?

May 1, 2023 | By Marie-Lou Penin, Head of Marketing – DanAds @danadsselfserve

Streaming video has seen explosive growth and isn’t yet showing any signs of slowing down. As audience habits change and evolve, are advertisers and media platforms prepared to take full advantage of the new paradigm? Whether it’s the shift from third to first-party data or ad formats designed uniquely for the streaming experience, there are plenty of cutting-edge trends and technologies that advertisers would do well to understand – and embrace.

Streaming audiences are booming

One of the biggest trends in streaming video is the rise of streaming-first networks. These networks, such as Netflix, Hulu, and Amazon Prime, often produce their own content and offer it exclusively on their streaming platforms. This model has proven to be successful, with many streaming-first networks producing critically acclaimed shows and movies that have gained a loyal following.

According to recent data, at least 85% of US households are subscribed to at least one video streaming service. The popularity of streaming-first networks has disrupted the traditional TV model, which relies on ad-supported cable and satellite networks. As more people switch to streaming platforms, advertisers are having to adapt to the new landscape and find ways to reach their audiences through these platforms.

Netflix, the world’s leading streaming service, for a long time publicly opposed advertising and relied on a subscription-only model. However, in 2022, CEO Reed Hastings announced that the company was opening the door to advertising, signaling a sea change. Hastings cited the success of Hulu and others in monetizing their streaming platforms through advertising. And, to back this up, a survey by MAGNA found that in 2021, U.S, linear TV ad spend is projected to decrease by 7.5%, while connected TV ad spend is projected to increase by 36.5%.

Self-serve advertising: targeted and brand-safe

Many streaming platforms, including Roku and Hulu, offer self-serve advertising options that allow brands to create and target their own ad campaigns. This gives advertisers more control over their campaigns and allows them to reach specific audiences in a brand-safe way. Self-serve is considered an effective compromise between the requirements of brand safety and scale; a system that is both automated and tightly controlled by the publisher.

Through self-serve advertising, brands can choose the ad format, ad placement, and target audience based on first-party data. Advertisers can also set their own budget and optimize their campaigns based on real-time performance data. Self-serve advertising platforms are built on the availability of first-party audience data.

First-party data: the key to targeting and personalization

Another trend in streaming video is the use of first-party data. Streaming platforms collect data on their users – including what they watch, when they watch it, and on what device. This data can be used to create more targeted and personalized ad campaigns. For example, if a streaming platform knows that a particular user is a fan of action movies, it can serve them ads for action movies or related products.

First-party data can also help advertisers understand their target audience better. By analyzing user behavior and preferences, advertisers can gain insights into what types of ads are most effective and adjust their campaigns accordingly. For example, if data shows that users are more likely to engage with ads that feature humor, advertisers can create ads that use humor to capture the viewer’s attention.

Trust builds strong relationships

In addition to self-serve advertising and first-party data, it’s important for advertisers to consider the relationship between viewers, streaming brands, and trusted advertisers. As streaming platforms have become more popular, they have also become an important source of trust for many viewers. This means that advertisers who partner with trusted streaming brands and create ads that align with their values and aesthetics are more likely to be successful.

Brands that are perceived as intrusive or irrelevant can quickly lose viewers’ trust and negatively impact the reputation of the streaming platform. To build and maintain trust with viewers, advertisers must focus on creating compelling, authentic, and relevant ad content that resonates with their audience.

One way to achieve this is through sponsored content. Streaming platforms increasingly offer sponsored content as a way for brands to reach audiences in a non-intrusive way. Sponsored content can take the form of branded entertainment, product placement, or native advertising. By partnering with streaming platforms and creating sponsored content that aligns with the platform’s values and aesthetics, advertisers can reach audiences in a more organic and engaging way.

Another important factor in building trust is transparency. Advertisers must be transparent about how they collect and use data, as well as how they target and deliver ads. By being transparent, advertisers can build trust with viewers and create a more positive advertising experience.

Connecting the dots with CTV

In addition to these trends, another important factor for advertisers to consider is the growing importance of connected TV (CTV). CTV refers to televisions that are connected to the internet, allowing viewers to access streaming content directly on their TVs. Already, a full 80% of U.S. households have access to a connected TV. With CTV viewership on the rise, advertisers have the opportunity to reach audiences on a larger screen and create more immersive and engaging ad experiences. Advertisers can also use CTV to target specific households and individuals, based on first-party data and other targeting methods.

As the streaming video and CTV landscape continues to evolve, advertisers must navigate new challenges, such as ad fraud. Ad fraud refers to the practice of generating false ad impressions or clicks to defraud advertisers. Advertisers can work with media platforms and ad tech partners to implement fraud prevention measures and ensure their ad spend is used effectively.

Closing thoughts

One simple saying appropriately describes the advertising impact of streaming video: the medium is the message. Streaming video isn’t just linear in a new, on-demand format. It’s a fundamental shift in the way that viewers experience media, create relationships with brands, and ultimately make decisions as consumers. There are a host of new challenges and opportunities, all of which will impact advertisers now and in the future.

The best way for advertisers and publishers to adapt to streaming video is to embrace it. And it will help to seek out expert partners to help navigate these new waters. In many ways, we will need to forget what we think we know about video media and open our minds to a new and exciting reality that is more audience-focused, personalized, and fast-changing than ever before.

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