One of the ripple effects of the Great Lockdown was that people everywhere hunkered down and… watched subscription streaming services.
In fact, we all watched a lot of movies and binged on series and added more paid services as we searched for fresh content. Streaming viewership rose by almost 75% in 2020 and growth continued in 2021, according to PwC. This continued even as the initial pandemic restrictions eased.
“We’re Spending How Much on TV?!?
When streaming services began to raise their prices and people began to realize how much they were spending on television. There are reasons, after all, why more and more financial management apps contain a subscription-management function.
Viewers began to re-discover that there is a video world beyond pricey paid channels and home viewing of in-theater movies, and have been signing up for those services in droves. This is the realm of “AVOD” and “FAST.”
AVOD stands for “advertising video on demand” — channels with content on tap so long as you are willing to accept the ads that come with the programs that typically can’t be skipped. Some experts include in this channels like YouTube and Twitch (owned by Google and Amazon, respectively) that rely heavily of consumer-generated content, some exclude them.
FAST is AVOD’s cousin. Standing for “free ad-supported streaming TV,” it is similar to traditional “linear” TV — shows that begin and end in real time, like old-fashioned broadcast television.
Both of these media forms, as well as the paid video (SVOD or subscription video on demand) are venues that financial marketers can tap in multiple ways. But AVOD is especially worth investigating when what you want is numbers.
Turns Out, People Don’t Actually Completely Hate Ads
“AVOD is increasing quite rapidly,” Paul Verna, Principal Analyst at eMarketer, said during a podcast. The Netflixes and Amazon Primes have been joined by a growing list of subscription services, he said, and prices have risen. “The surge in AVOD usage is partly a backlash to the subscription creep we are seeing. There’s always been a pendulum swing between ad supported media and directly monetized media.”
One of the early appeals of paid channels was their commercial-free content, but the dizzying choice now available seems to have viewers performing entertainment cost-benefit analysis.
“People don’t mind seeing ads with their TV if it means the cost can came down,” said podcast host Marcus Johnson.
As a result of these trends, almost half (46%) of American viewers watch some kind of AVOD at least monthly, according to Horowitz Research. (That drops to 28% if YouTube is excluded.) The firm’s research indicates that this is second only to paid video (SVOD) at 74%. Leading platforms among the AVOD options are The Roku Channel, Amazon’s IMDb TV, Crackle and Vudu.
According to Verna a growing trend is for formerly paid-only services to add hybrid models where both ads and fees are part of the mix. All of these variations are subsets of OTT — over the top TV, media delivered directly to viewers via the internet.
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Why Streaming Should be on Financial Marketers’ Radar
The apparently insatiable demand for more to watch, and fresh material, has driven some AVOD services to commission new shows — much like the old days of “free” TV. Horowitz and other research indicates that 18-34 year olds lean towards streamed services overall now, but also that older consumers, 50-64, lean towards free, ad-supported services.
“Make It Worth My While”:
PwC research indicates that two out of three consumers surveyed would tolerate more ads on hybrid services if that would lower their subscription costs.
“Consumer’s love for entertainment content — and their desire to get as much of that content as they can for as little as they can — hasn’t changed,” said Adriana Waterston, SVP of Insights and Strategy for Horowitz in a company blog. “What has changed are the expectations consumers have about how, where and when they can consume the content they love, and the technology that exists to deliver those experiences.”
PwC research suggests that future growth of streaming ads will hinge on how much data consumers willingly (or passively) give up in order to give advertisers the ability to target eyeballs more and more precisely. Advertising spending on OTT services and connected TV (TV delivered by devices like Apple TV and Amazon Fire TV Stick) rose $8 billion in 2020 and was expected to grow by another $11 billion in 2021, according to PwC.
This targetability will make streaming a more viable option for more advertisers, and especially for smaller ones.
“The end result of this advertising approach is that your local business can utilize TV ads more than ever before, and at a much more affordable price,” according to a Cox Media blog. “At the same time, the targeting offered through these digital platforms can help you connect with a niche audience that traditional TV and radio can’t support in a cost-effective way.” Both programmatic and direct buys are possible, with arguments made for one or the other or a blend.
Standards for industrywide metrics for AVOD streaming are still coming together. Reports says that Nielsen Company will have its approach ready in 2024.
How Would Financial Institutions Use Streaming Ads?
A theme seen in articles about these new options is that traditional 30-second spots made for “regular TV” aren’t necessarily the way to go for streaming. It isn’t just a matter of “trimming,” but “reconceiving.”
A roundup of the Forbes Agency Council about marketing on streaming services argues for memorable ads running between five and ten seconds and with “out of the box” approaches. The blog also suggests defining up front what content your messages will appear with, to avoid embarrassment.
Smaller brands that are new to streaming need to establish recognition. A Hulu advertising blog suggests extensive use of your logo — which may require some work to make your bank or credit union logo video friendly.
Consider Your Frequency:
Controlling how often streaming audiences see your same ad is still a developing technique, but it’s something to be aware of. Devoted watchers of old 60s spy and detective shows on IMDb, for example, likely can recite some spots from memory.
The Hulu blog suggests smaller brands going short on ad length go with humor, but for financial brands that requires careful treading. “Funny” can be in the eye of the beholder and while some banks and credit unions have had success with funny ads, they can also backfire.
On the flip side, your brand doesn’t want to be the advertiser running the streaming ads that people do laugh at, when they weren’t meant to be funny.
Another gambit, where possible, is to reconsider what “watching TV” means. While streaming has made TV something that can be snacked on in bites or gorged on on weekends, it also makes new viewing patterns possible on cooperative services. For example, The Roku Channel makes it possible to sponsor a movie for a night, with exclusivity. That gives financial brands the opportunity to promote a “night at the movies” in other advertising.
Think Beyond the Screen: Streaming Only Looks Like Traditional TV
Marketers will increasingly have to recognize that “TV” to younger generations will have no connection to classic television anymore. (Ask a Gen Zer what an “antenna” is and they may refer to insects.)
“Streaming today is what The Howdy Doody Show was to Boomers, what John Hughes films are to Gen Xers, and what cellphones are to Millennials,” says an ad guide from the Tubi streaming service. “Streamers didn’t grow up with TV — to them, streaming is TV.”
In that context, marketers can consider different ways to capitalize on streaming. Old-style commercials make it hard to connect consumer and advertiser. The Roku Channel, in its media kit, suggests interactive supplements as opposed to merely inserting commercials. These include polls and connections to offers.