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November 15, 2021

How Streaming Ads Stack Up Against TV

As we reported in the last issue of Media Matters, TiVo’s second quarter 2021 Video Trends Report included data on how its 4,500 U.S. and Canadian respondents feel about advertising on different types of services; more than half of OTT, AVOD and vMVPD users claimed that they don’t mind ads when watching “TV.” To recap, on the high end, 61% of its respondents claimed that they Don’t mind ads or commercials when watching TV,” while on the low end, only 38% of SVOD subscribers to services like Netflix and Amazon said the same. In fact, the degree of tolerance to TV ads was in direct relationship to whether or not the TV viewing was “free.” In other words, respondents were more likely to accept ads on a platform they don’t pay for (e.g. AVOD) versus one they do (e.g. cable video on demand).

Makes sense. But how does this compare to ads in other media? A September 2021 survey of 2,200 adults from Morning Consult looked at respondents’ opinions about streaming ads, particularly targeted ads, and found the following:

 


Here we see a sliding scale of consumer sentiment based on how targeted the ads are; social media and website ads were ranked the most invasive, while traditional media were viewed less negatively. Clearly, there’s a world of difference between an ad that pops up on a website or on social media based on your browsing history, and an ad about food that airs during a cooking show or in an epicurean magazine. It’s not about whether a platform is free, but rather about ads getting too personal.

In this survey, Morning Consult also focused on streaming services and reported that, “A plurality of U.S. adults (44 percent) said there are too many ads on streaming services, while 69 percent said they’re repetitive and…[r]oughly 4 in 5 consumers (79 percent) are bothered by the number of ads and how often they’re replayed on streaming platforms.” While streaming services fared better than social media and websites in terms of intrusiveness, they obviously face issues regarding their commercial loads and how often ads are repeated.

So, what’s the takeaway? TV ads—particularly on platforms that provide “free” programming—enjoy a degree of goodwill from viewers who feel that ads are a fair trade for accessing the shows they want to watch. But there are limits. Just because the content is free on social media, websites and some streaming services doesn’t mean that viewers want to sacrifice their privacy or be barraged by repetitive ads to access it. Advertisers must figure out how to operate within these parameters.

Reach Matters (Except When It Doesn’t)

As anyone who reads the trades is aware, reach is an ongoing hot topic. More specifically, coverage focuses on the battle for eyeballs between traditional TV and streaming platforms; typically, traditional TV is purportedly suffering—or even at death’s door—as digital formats make inroads and advertisers follow.

But how crucial is reach, really? The latest data from Nielsen’s Total Audience Report finds that live + time-shifted TV has an 80% weekly reach, while TV-connected devices have a 56% reach. For its part, video focused app/web usage on smartphones has a 72% reach. That’s certainly closing the gap and worth discussing, but in the meantime, nobody seems to care that radio beats both handily, with a weekly reach of 88%, edging out even “total use of television” by two percentage points (see below).



Some might say, “So what?” But that is exactly our point. Nobody cares that radio is tops in reach; the medium barely gets a mention in the trades. Reach is a nice talking point, and while it’s definitely a factor, it’s not necessarily how advertisers decide where their money goes. Star power, merchandising needs, editorial compatibility, promotional tie-ins and company image are all intangibles where TV—in all its forms—has more cache…and garners more headlines.




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