The Ad-Supported Streaming Market Just Got Real

By the end of 2025, it will be practically mandatory for marketers to buy video advertising from Netflix, Amazon and Walmart.

You might be thinking, huh?

And with good reason. While each of these companies are behemoths in their own right, their video ad businesses have been afterthoughts at best.

And let’s be honest: the ad-supported streaming market itself had hardly been worth a second thought. Even as the hours that Americans spent watching streaming services surpassed the time they spent with linear TV last year, and the number of pay TV households in the U.S. fell below 50%, streaming ad inventory had been mostly relegated to B-tier services like Peacock and Paramount+ and obscure players like Pluto TV and Roku Channel.

That ended in January, when Amazon started running ads in its Prime Video streaming service, joining a race that Netflix and Disney+ had recently entered. With its 115 million pre-subscribed members, Amazon brings immediate scale and legitimacy to this market.



It also brings the kind of sophisticated targeting and sales data that should grab your attention.

Not only does Amazon have the strongest shopping signals in the world, it has signals on how consumers interact with Alexa, which it can use to retarget those behaviors on TV. Amazon also owns Fire TV, which gives it access to ad real estate, and viewing data for retargeting.

Amazon is still figuring out the inventory thing, but once it picks up more sports rights and worthwhile content, the sky will be the limit.

Walmart is on a similar path, except it just got even bigger. The retailer recently purchased Vizio for $2 billion, giving it access to unparalleled viewing data it can use for targeting, as well as a humming ad product. The ability to own the biggest screen in the house and capture more eyeballs to upsell Walmart products should appeal to anyone looking to close the loop between advertising exposure and action.

Then there is Netflix. Having introduced an ad-supported tier in 2022, the original streaming service is now dabbling in sports rights, acquiring “Raw” from the WWE and trying out various one-off sports events before making a bigger league commitment.

And not only does Netflix have the capital to plow money into original content, it is once again emerging as the home to every media company’s licensed hits (see:“Suits”). That inventory, paired with strong first-party data, will make Netflix a must-buy.

What should marketers be doing now?

First, get into these platforms today. Netflix and Amazon are currently hungry for early adopters to test out the kinks, and are willing to cut sweetheart deals to get them.

Second, trim your existing CTV mix. Ditch most of the services that you’ve been buying from. Instead, focus your investments on those players positioned for the long haul.

Finally, develop your own marketing and measurement methodology for a new CTV world. We are about to see the rise of even more black boxes in the streaming space, like we’ve seen in social from Meta and search from Google. It won’t be perfect, but it never is.

All in all, this is the dawn of a new era, one where sophisticated targeting can be leveraged in quality video inventory. It’s an exciting development that should be top of mind as you prepare for the upfronts this year -- and many years to come.

3 comments about "The Ad-Supported Streaming Market Just Got Real".
Check to receive email when comments are posted.
  1. Danny Weisman from Noble People, April 18, 2024 at 9:11 a.m.

    Really nice piece, Danny Weisman.

    Danny Weisman 

  2. Ed Papazian from Media Dynamics Inc, April 18, 2024 at 12:15 p.m.

    Danny, with all due respect, streaming has not exceeded "linear TV" in total time spent at any time and still has a long way to go before that happens. Also, a substantial amount of streaming usage is to content that does not carry ads. As a result of this, plus low ad clutter rates on CTV, about 80% of the available GRPs that national marketers can buy are still attainable via linear TV platforms. Yes, the corresponding figure for adults under the age of 50 are lower--- but far---very far---from zero.

    As for your contention  that Amazon, Netflix and Walmart should be must buys for advertisers that depends on a lot of factors, not the least of which is their coverage and the amount of TV viewing time they command. Amazon Prime's ad-supported platform accounts for only 2% of all viewing while Netflix falls way below that and Walmart is just getting started. Other factors are CPM pricing, "audience" measurement, how the commercials are placed, the nature of the content, demos and---where applicable---and it isn't always so---refined targeting capabilities.

    Don't get me wrong. If I were a major TV advertiser CMO and I was paying serious attention---as too few do---to how my ad dollars are being spent---I would be asking  questions about the values offered by Amazon, Netflix, Walmart and any other  major time seller and expecting sensible answers from my media people. I would also be challenging them about the usefulness of the rating data that they use to make such buys and, frankly, whether we are better off dumping our upfront buying entirely and going to a brand by brand buying system. But I would not prejudge any of this and I would consider all of the key trade-offs. In short, I wouldn't legislate any seller as a must buy.

  3. Danny Weisman from Noble People replied, April 18, 2024 at 5:36 p.m.

    Totally fair. My prediction is that by the end of 2025 these platforms will be must buys.

    I share the same thoughts around the current state of ad-supported streaming. It sucks.

    But the piece predicts that the tide is turning.

    PS, good shout on the streaming hours piece. I was referencing last August when TV viewership fell below 50% for the first time, per Nielsen. Streaming (both ad-supported and non-ad suppoted) has exceeded cable and broadcast invidiually for quite some time too. 

    Thanks for the comments! 

Next story loading loading..

Discover Our Publications