The Impact of Streaming Services on TV Advertising: What It Means for Marketers

Over the past decade, we’ve seen a significant shift in how people consume TV content. Gone are the days of gathering around a single TV to watch a show at a specific time. Now, viewers can watch TV shows and movies at their convenience, thanks to streaming services like Netflix, Hulu, and Amazon Prime Video.

These services have become incredibly popular, with millions of subscribers tuning in daily to watch their favorite shows. In fact, according to reports, the number of people in the United States who use a streaming service at least once a month has surpassed the number of traditional TV viewers.

Here’s the million-dollar question: does this annihilate TV advertising, or is there a way for marketers to take advantage of the situation?

The Impact of Streaming Services on TV Advertising

With the rise of streaming services, traditional TV advertising has taken a hit. In the past, TV advertising was the most effective way to reach a large audience. But now, viewers can skip commercials or even pay extra to avoid them altogether. This has resulted in a decline in TV advertising revenue, with some estimates suggesting a decrease of up to 17% by 2023.

This shift has also affected the types of ads that are being produced. With viewers skipping commercials, advertisers need to create more engaging content to capture their attention. This has led to an increase in branded content, which blends advertising and entertainment to create a seamless viewing experience.

In essence, marketers should up their game to stay relevant in the world of TV advertising.

Advantages of streaming advertising

Precision Targeting

One of the most significant advantages of streaming advertising is the ability to target specific audiences precisely. With traditional TV advertising, marketers would place ads during specific time slots or shows to reach their target audience. However, this method was not always effective, as not all viewers were interested in the products or services being advertised.

On the other hand, streaming advertising allows marketers to use data-driven targeting to reach specific demographics based on their interests, behaviors, and viewing history. For instance, a marketer promoting a new fitness product can target viewers who have watched fitness-related shows or movies on the streaming platform. This way, they can ensure that their ads are shown to the right people who are more likely to take action and purchase.

Accurate Ad Performance Measurement

Another advantage of streaming advertising is the ability to measure ad performance accurately. Traditional TV advertising relies on metrics like viewership and ad placement to determine the effectiveness of an ad. This method is not always accurate, as it does not provide insights into how viewers interacted with the ad or whether they took any action after seeing the ad.

On the other hand, Streaming advertising offers more advanced metrics like completion rates, click-through rates, and conversion rates, which provide more detailed insights into how viewers interacted with the ad. This information can help marketers optimize their ad campaigns and make data-driven decisions to improve their ROI.

Connected TV (CTV) Advertising

With the rise of Connected TV (CTV) advertising, marketers can now take advantage of the benefits of streaming advertising on a larger screen. CTVs are devices connected to the internet, such as smart TVs, streaming sticks, and gaming consoles.

These devices allow viewers to access streaming services directly on their TV and offer a new way for marketers to reach their target audience. Integrating CTV advertising in marketing offers several advantages over traditional TV advertising. For one, viewers cannot skip ads like they can with streaming services. This means that marketers have a captive audience, which can increase the effectiveness of their ads.

Additionally, CTV advertising is highly targeted, allowing advertisers to reach their ideal customers precisely.

Other Forms of Streaming Advertising

In addition to CTV advertising, marketers can leverage other forms of streaming advertising, like in-app advertising, over-the-top (OTT) advertising, and programmatic advertising. These methods allow marketers to reach their target audience through various channels and devices, increasing the likelihood of conversion and ROI.

The Future of TV Advertising

So, what does the future of TV advertising look like? It’s clear that streaming services will continue to dominate the TV landscape, and traditional TV advertising will continue to decline. But as CTV advertising grows, we can expect to see more creative and engaging ads tailored to the viewer’s interests.

In addition, we can expect to see more branded content that seamlessly integrates advertising into the viewing experience. This trend has already begun, with many streaming services producing original content that features product placements and sponsorships.

The Bottom Line

Overall, the rise of streaming services has disrupted the traditional TV advertising model, and marketers need to adapt to this new landscape. By embracing CTV advertising and creating more engaging and targeted ads, marketers can continue to reach their target audience and drive business results.