What is Ad-Supported Streaming? Is It the Future?
Not long ago, people were eager to dismiss ad-supported streaming. The prevailing wisdom was that people would always prefer paying premium prescriptions over watching free content loaded with ads.
While this is true for many people, today’s user data makes it clear that ad-supported streaming shouldn’t have been written off. It’s now emerging as a viable option for streaming services and viewers.
What is Ad-Supported Streaming?
Ad-supported streaming refers to any content streaming service that relies at least partially on revenue from advertising. This allows viewers to watch content in exchange for watching commercials, rather than paying a monthly fee for subscription-based streaming.
Types of Ad-Supported Streaming Services
Ad-supported streaming falls into two categories. Some streaming services are entirely funded by ad revenue, where viewers pay no subscription costs. However, they must watch the ads the streaming platform serves them.
Other streaming platforms are partially funded by ads. They may show limited ads but also rely on subscriptions to cover costs and generate a profit. There are a few different ways to accomplish this. For example, 100% free ad-supported streaming TV shows ads to all consumers, whereas other platforms may offer subscription tiers, allowing users to pay to limit ads or avoid them entirely.
What’s the Appeal of Ad-Supported Streaming?
While many consumers will continue to pay for the convenience of skipping advertisements, ad-supported streaming is still appealing to viewers, streaming providers, and advertisers.
Ad-Supported Streaming and Viewers
Viewers have made it clear that they are willing to watch ads if they receive valuable content in return. Therefore, ad-supported streaming is a valued option for customers who find that paying for multiple subscriptions is outside of their budgets.
Additionally, some consumers may be interested in experiencing new content platforms but are hesitant to pay full subscription rates, especially if they’re already paying for other options. However, they are more likely to test-drive new services if they can do so for free or at a discounted rate.
Ad-Supported Streaming and Providers
Competition is fierce among the contenders of the streaming wars. Viewers have more choices than ever before, and providers are working hard to acquire and retain customers. Because of this, many have begun to revisit their revenue-generation strategies. This includes offering ad-supported options to customers who may not be in a position to pay for subscriptions.
It’s important to note that ad-supported streaming isn’t just for second-tier platforms, either. For example, Disney+, Netflix, and NBC each have a streaming option with ads or will be debuting one soon.
Ad-Supported Streaming and Advertisers
Brands also have something to gain from ad-supported streaming. Until now, they had no way of reaching viewers on some of the most popular streaming platforms. But now that many of these providers have embraced advertising, this has opened up new opportunities.
However, brands that wish to successfully leverage this opportunity must keep these tips in mind.
Relevant Short and Timely
Thanks to TV viewership statistics, we now know that viewers don’t mind some advertising. However, they do dislike ads that are intrusive, too long, and irrelevant to them. When the right ad is placed in front of the right viewer at the right time, it can lead to great results for the advertiser. But when any of those elements are out of place, ads only generate frustration.
Create Ads with a Native Feel
Advertisers must consider the platform and placement of their ads. The best-performing advertisements make sense. They fit in with the content that consumers are there to view, rather than being disruptive to the user experience.
Make Brand Stewardship a Top Priority
As ad-supported streaming grows, it’s tempting for brands to extend their reach as far as possible. Unfortunately, without proper diligence, there’s a risk of your ads showing up in content that isn’t aligned with your company values. As such, advertisers must exert control over where their ads are placed.
Write Clear Calls to Action
Viewers watch streaming content across a variety of devices, and they won’t always have the option to tap or click through to a website or landing page. Therefore, it’s important to provide clear instructions that lead viewers to your company website or other desired destination.
Is Ad-Supported Streaming the Future?
You could certainly make the argument that ad-supported streaming is the future; it’s one of the fastest-growing categories among all streaming services.
And while inflation may have driven budget-conscious customers to embrace advertising in exchange for free viewing, there’s no guarantee that they will ever resume their prior spending habits. Instead, brands and media companies should embrace the fact that ad-supported streaming is here to stay.