Most of us remember the words to a famous jingle from our childhood or a particularly clever commercial that stood out. Today, however, with streaming services more popular than ever, fewer people are consuming commercials on network TV and radio. This begs the question: Are streaming services killing the ad industry? No doubt these services are making a dent, but it’s premature to give Madison Avenue its last rites. After all, capitalism is alive and well, and the ad industry is adapting to the new ways that people consume entertainment.

Quartz Media recently reported: “Spending on TV ads fell for the first time in 2017, and will slip another 0.5% this year to $69.87 billion.” The outlet cited competition from online platforms and an overall reduction in standard TV package subscriptions as the chief culprits. However, Quartz went on to say, “TV ad spending would likely rise again in 2020, when the next US presidential race and Summer Olympics take place.”

Similarly, ID disclosed that in 2016 23% of all households in the United States did not subscribe to pay TV (cable, satellite, telco TV) and anticipates this figure will increase to 29% by 2020. If this occurs, how will brands utilize this more narrow exposure and abbreviated opportunity to reach consumers? Here are a few ways advertisers are finding to circumvent the decrease in exposure via traditional channels.

Addressable TV, VOD and Dynamic Ad Insertion

The IAB (Interactive Advertising Bureau) published a series of findings on this topic. As defined by them,

“Under the umbrella term “Advanced TV” exists the digital off-springs of the broadcast era: Interactive TV (which may appear as digital overlays on top of linear TV commercials), Connected TV (CTV) / Over-the-Top (OTT) and Smart TVs, Linear Addressable TV—where ads targeted to specific households are inserted into live programming (i.e., DirecTV, Dish, Cablevision)—and Video-on-Demand Addressable—where dynamic ads are inserted into cable programs through the cable provider’s set-top box (ex: Comcast’s VOD).”

With Advanced TV comes a new set of challenges and opportunities. Brands can tap into an abundance of data, such as when and how long a viewer watched an ad, which was previously unavailable from traditional Linear TV data models. Advertisers now have, at their fingertips, household data as opposed to the individual data traditionally available in only digital. Once collected, advertisers can use this data for everything from optimizing ad length to displaying ads that align with the viewers favorite shows or political leanings. These new data-enriched homes pose unique advertising opportunities for brands, and agencies can use the data to design cross-device campaigns, interactive campaigns and relevant social contests. 

Product Placement

Streaming giants such as Netflix and Amazon already have lured huge audiences away from network TV. And that’s to say nothing of subscription TV channels such as HBO and Showtime their respective OTT apps, and Hulu, which still shows commercials unless you pay for a premium subscription. To combat this problem, advertisers are having to get more creative with incorporating brands into content by utilizing product placement. Although product placement has been around since the invention of network TV, we’re about to see a lot more of it. 

Variety noted the prevalence of Eggo waffles in the popular Netflix showStranger Things. Although Kellogg allowed the brand name to be used in the show at no fee, its presence sparked a meaningful conversation about the brand. The outlet quotes a statement by Trinh Le, marketing director for Eggo: “Eggo had more social mentions than over half of the Super Bowl advertisers.” 

Variety pointed out that advertisers see a similar opportunities with streaming services. After all, these services appeal to brands’ most coveted consumer segment: young people willing to try a new brand. Seamlessly integrating a product into a piece of content is a win-win. If the producer of a show gets to use a major prop, such as a car, for free, this cuts production costs while helping brands gain a foothold. 

Podcasts and Audio Technology

TV is not the only medium whose advertising has been affected by streaming services. So has radio, which could be described rightly as a dying medium. Because subscription-based services bring in a lot more money for recording companies than advertising does, these companies are gravitating more and more toward using only that model. Streaming podcasts, however, represent a huge opportunity for advertisers. Fast Company reported that advertising revenue through podcasts jumped 85 percent between 2016 and 2017. Seventy-five percent of listeners took action on a sponsored ad, 90 percent listened to the entire podcast, and relatively few skipped through the ads. Furthermore, branded podcasts are a new way that advertisers are connecting meaningfully with consumers.

With the introduction of audio home devices such as Google home, Apple HomePod and Alexa, audio ads are going to become more and more prevalent. As of May this year, Google announced it would be offering programmatic audio ads as part of its DoubleClick Bid Manager, (though the platform won’t have access to YouTube or YouTube Music). Google stated that the introduction of audio ads to programmatic is still early, though definitely growing. Recently, global ad delivery and asset management tech firm Adstream wrote about its collaboration with P&G on delivering the first audio-described ads to broadcasters in the U.K. The commercials broke new ground for video to audio delivery in the world of accessible advertising. This type of audio ad has opened the door for those with vision impairments to have the same experience as their sighted peers. This audio innovation from P&G and Adstream is expected to roll out to other markets in the near future.  

2018 has shown us that the traditional ad models are still the most trusted. Clutch.co reports in a survey of 1,030 people that consumers trust TV the most (61%), followed by print (58%), radio/podcast (45%)  out-of-home (42%) Online (41%) and Social Media (38%). In short, as we have witnessed in the past, the advertising industry isn’t going away anytime soon. It’s just assuming a different form. As advertisers and brands consider the new trends in streaming services, they must stay nimble and agile while relying on integrated forms of ad delivery and distribution.