MEDIA ADVERTISING IS about to get a whole lot more interesting as Disney+ and Netflix are introducing ad-supported subscription options in late 2022. As two of the most dominant streaming services, the question is how many traditional cable ad dollars will move over to Disney+ and Netflix, along with other OTT (over-the-top) services?
Users typically subscribe to multiple streaming services, which can add up to a nice chunk of change. So, it shouldn’t come as a surprise that 57 percent of people, surveyed by Hub Entertainment Research, said they could tolerate some ads. Disney+ and Netflix already have the highest retention rates among streaming services, so there is some consistency in terms of viewership; that’s important for ad dollar consideration. In addition, offering a lower-priced option may not only increase retention, but will most likely lead to new subscribers.
And we all know subscriber growth is a KPI for streaming services. Those new subscribers will also, more than likely, consist of 35-year-olds and younger (which would boost bridal age subscribers). Compared to traditional media, Disney+ and Netflix would rely much less on ad revenue. In fact, it may lead to a revolution in how ad networks function. One obvious example, which is already true for video ads that run on social channels, is ad length. If you’ve ever sat through a commercial break with six-plus sets of ads with an average of four minutes per break, you’ll understand the pain. So, shorter ad breaks would be a welcome addition. Since ads would likely be non-skippable, limiting ad break times could actually benefit ad recall and overall effectiveness, since 60-90 seconds isn’t long enough for viewers to get up and make a snack.
Reinventing ad delivery could also be revolutionary. Since users maintain an account, the platforms would have access to different types of data, like what type of shows you watch. This could lead to a more personalized and relevant ad experience, especially if the user could select what types of ads they wish to see.
Take Amazon Prime, for example. Since Prime is connected to a user’s Amazon account, how simple would it be to show advertising based on products they use? With a click of a button, that ad could turn into an e-commerce conversion and add the product to the user’s cart.
Changing advertising so that it allows more personable levels of engagement and/or introducing new products based on interests could usher in a whole new world of relevant and, dare I say, desired advertising.