• by Danyelle Horrillo , July 10, 2023

Streaming video has revolutionized the way consumers access content, with services offering on-demand viewing virtually anywhere -- and now introducing ad-supported tiers to their memberships. Platforms such as Netflix, Disney+, and HBO Max have embraced this trend, recognizing the demand.

So consumers can now access the premium content they crave without price creep -- and streaming services can diversify their revenue streams.  This trend is likely to continue as more companies enter the market and competition intensifies -- we’re looking at you Showtime and Paramount! Recently Amazon announced that it will add an ad-supported tier to its Prime Video streaming service.

Ad-supported and paid streaming services typically offer higher quality content as compared to free content streaming platforms. This content attracts a more engaged audience, which can increase the effectiveness of ad campaigns. Personalized recommendations and higher quality video and content create a better end-user experience, which can potentially lead to higher brand affinity.

It is not unheard of for a household to have three or more paid streaming service subscriptions, so offering an ad-supported tier at a lower cost of entry allows consumers to continue to enjoy all the content they desire.

But why is this beneficial to brands?

Ad-supported streaming services have a vast user base, and a previously untouchable addressable audience. Want to target consumers who binge-watch “Stranger Things”? That’s no longer a pipe dream! With the upcoming cookie-apocalypse, advertisers can tap into valuable first party and exact demographic user data unavailable anywhere else. While typically not scalable enough to fully encompass an entire targeting strategy, this data can beef up tactics and help round out a targeting approach.

The format of ads displayed are far vaster than traditional :15 or :30 spots, through creation of branded content in collaboration with brands that offer a more immersive streaming experience. Think miniseries, documentary, or short film formats designed to promote a product or brand.

Interactive ads are becoming more popular in this space as well, allowing viewers to engage with the brand by selecting different options, completing a quiz, or scanning a QR code on their mobile device. Shoppable ads allow viewers to make a purchase directly from the ad on screen.

Product placement within streaming content is also becoming more popular as publishers look for ways to seamlessly incorporate ads into programming allowing brands to promote their products without interrupting the viewing experience.

Streaming services can deliver ads that are contextually relevant to the content being watched. For example, an ad for a new sci-fi movie can be served to viewers watching similar content on their screens. That increased relevance can increase effectiveness of the ad and create a better user experience.

Ad-supported streaming video services provide advertisers and brands with a range of benefits, including wide audience reach, measurable metrics, ad format variety, contextual relevance, and cost-effectiveness, making them an attractive option for advertisers seeking to reach a large and engaged audience.