3 Reasons Why Advertising on Streaming Platforms is Crushing Traditional Television

ads on streaming video

With unlimited streaming choices available in today’s TV watching space, it is no surprise that viewers are choosing to cut cords and moving for more flexible streaming platforms. That is exactly why advertising companies are steering their clients to spend more advertising bucks on streaming platforms and invest little on traditional TV broadcasting. The spending on TV ads is already falling since 2017 and is likely to rise again slightly in 2020 due to the US presidential election and Summer Olympics, according to emarketer.

Traditional TV, or linear TV as it is popularly called, was the only option for advertisers to deliver visual messages to millions of viewers. But while picking a slot, a show, or a zone, they were taking a guess on viewership as the opportunities to track user preferences were very little to none. However, advertising on streaming platforms is a lot more successful as effective methods exist that help advertisers know what is relevant to the target audience. There are already several niche services competing for advertising money, and there will be more networks coming up as technology grows.

Advertising opportunities on streaming platforms

Perhaps one of the primary reasons why Netflix is famous is its lack of advertisements on the platform. Of course, not all streaming services operate on this business model. But in a scenario where online viewers aren’t fond of advertisements and are willing to upgrade to premium plans just to avoid them completely, how can advertisers thrive? There are exclusive advertisement video on demand services that work entirely based on ads. Advertising video demand works much like TV advertising but is delivered through streaming media and comes with a few other differences. The growth and potential of OTT or video streaming advertising were highlighted first when the reports of Hulu’s ad revenue crossed $1 billion were released. If you want to create a video streaming website, this is the right time to launch your business as the market is thriving with lucrative opportunities.

hulu ad revenue
Source: Hulu ad revenue – https://www.emarketer.com/chart/217679/us-hulu-ad-revenues-2016-2020-millions-change

One major advantage of streaming advertising is that advertisers can make the most out of their advertising budget by creating ad campaigns on multiple OTT platforms. This is another benefit streaming TV services offer as there seems to be an endless number of services out there. What’s best about this is advertisers have the flexibility to pick the streaming platform that fits their product or service the best. For example, if you are a brand selling sports products, you can advertise on a sports streaming platform that focuses on sports streaming alone. Altogether, it’s a win-win situation for all.

How ads are delivered in streaming platforms

To deliver ads on streaming platforms, it is important to consider how the streaming platform communicates with the viewer’s device and how the ads are inserted. A typical ad delivery process on streaming platforms is as follows.

Creating an audience base

A streaming audience base is created according to the subscription data of the streaming platform. It can also be enhanced with additional information like the user’s preference of shows etc.

The campaign is pushed

Once the audience base is created, the process of user matching begins. The streaming platform will match users to the specific TV subscribers list. Later, the ad campaigns are pushed, downloaded, and buffered by the devices.

Advertisements are displayed

Based on the templates, the streaming platform communicates with the device and ads are displayed on the OTT platform.

Remarketing

Remarketing is yet another overlooked strategy where the ads are displayed again to the specific client groups who viewed the ads without taking any actions. Remarketing helps in securing missed leads, improving the conversion rate and helps to add to your net revenue.

Analytics and reporting

Once the campaign is over, The OTT operators send back ad-campaign analytics and results to the advertisers.

Reasons for the rise of advertising on streaming platforms

Studies show that over 70% of U.S households have at least one streaming service subscription, and an average American subscriber watches 3 to 4 services and pays an average of $8.53 every month. It seems like streaming advertising may ultimately be the only way for TV advertisers to reach their viewers and recoup the lost revenue. While these figures clearly indicate the reasons for advertisers preferring streaming platforms over TV advertising, there are some other reasons as well. Here are 3 reasons for the rise of advertising on streaming platforms.

More specific demographic targeting

Video streaming platforms are a great way to reach active millennials and new generation users. Unlike traditional television advertising that limits geographic targeting, advertising on video streaming platforms allows advertisers to choose specific or pre-determined zones and select specific zip codes to target. Also, instead of making a wild guess and hoping to reach the right audience, streaming advertising allows advertisers to reach users directly where they are. Advertisers can target the right audience based on their age, gender behavior, viewing interests, location and more.

Ability to reach all types of screens

While TV was the only medium for advertisers to reach their target viewers, streaming platforms offer advertisers opportunities to reach their audience through different types of devices. These days advertisers have several choices to make their message reach viewers where there may be watching. From desktops, smartphones, tablets, connected TVs, there is no shortage of ways for advertisers to position their brand in front of potential customers. OTT VOD streaming advertising allows them to implement both short and long format ads optimized for all devices and platforms. This ensures that the brand messages reach their intended audience no matter what.

More flexibility

Perhaps the most appealing reason for TV advertisers to happily shift to streaming advertising is the flexibility it offers. For example, advertisers can reach their target viewers using short videos, longer-form video series, “always-on” channel and more. Due to the same reasons, targeting can be specified by different aspects like age, gender, interests, affinities, income, etc. Advertising-based video streaming platforms also offer a unique opportunity for advertisers to view and analyze the results of the ad campaigns. With real-time analysis and reporting, advertisers can analyze the data to make data-informed decisions for a better impact.

To wrap it up

TV advertising has been the ideal way for advertisers to reach a large number of viewers on time and still is a formidable medium. However, the growth in streaming services has expanded opportunities for advertisers outside of traditional cable television networks.  The opportunities streaming advertising offers are still relatively limited today but will certainly continue to expand, presenting advertisers with brand new ways to reach their audience. Considering technology’s increasing contribution to the advertising market in the coming years, streaming advertising will present the most lucrative opportunities for brands.

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