Streaming is booming. From the powerhouse Netflix, to more niche apps like horror channel Shudder, Connected TV (CTV), and Over the Top (OTT) usage has become a part of everyday life. There are now well over 200 streaming services available today with 85% of U.S. households having at least one video streaming service subscription. That makes things more interesting, and possibly more complicated, for those who work in PR for ad tech and entertainment brands.
With advertisers taking notice of the growth, there’s been an uptick in brands adding streaming to their media ad spend strategy, resulting in more streaming-specific PR goals for adtech providers. In fact, it was reported that CTV ad spending is expected to increase to 40% by the end of this year, totaling over $14.4B, with it being forecasted to reach $29.5B by 2024.
Even with the increase in spending, the advertising environment for streaming is still working out issues related to measurement and fragmentation of platforms. Effective navigation of the space is critical for the key players who want to establish a leadership position in the category and get ahead of the competition.
Here are three key trends PR professionals in media and ad tech need to be aware of while developing strategy.
AVOD channels increasing their reach
Subscriber fatigue is real and has been seen firsthand with Netflix losing a whopping 1 million users in Q2 2022. Deloitte Global even predicted that at least 150 million paid subscriptions for subscription-based video-on-demand (SVOD) channels will be canceled by the year’s end. We are seeing an increase of advertising-based video-on-demand (AVOD) channels, such as HappyKids, and Fawesome, popularity leading to adjustments ad strategies. A channel that had a small audience number last year, may have had an explosion in growth this year. By staying aware of where the viewers are, brands are able to adjust campaign strategies to meet the market.
With many turning to AVOD channels to meet their entertainment needs, brands are fighting it out to capture these highly competitive ad spots. Large SVOD channels have since begun to pivot their strategy, turning to a hybrid business model. This, in turn, is leading to an even greater pool of streaming ad inventory.
The rise of subscription tiers
Early this year, we saw Netflix and Disney+ announce plans to offer subscription tiers. By dipping their toes into the AVOD market, these previously SVOD-only services are hoping these new pricing options attract subscribers while adding advertising to their revenue stream. While the new ad options provide a lower price tag for viewers whose wallets are tightening, some view it as a step back into the dark days of cable.
Another risk of rising inventory is ad saturation. Ad-supported CTV/OTT need to stay vigilant to prevent the streaming ad space from bursting, sending viewers in the opposite direction. Equally important, PR people who position executives for speaking and content opportunities must ensure they approach the space with up-to-the-minute knowledge.
Growth of CTV/OTT ad tech
CTV/OTT ad budgets have been rising to keep up with the increase in media consumption. We see this in the current political season in which CTV spend is predicted to reach $1.4B. The increase has in turn sparked new innovations in the technology. We’ve also seen an increase in solution and agency partners as well. Buying CTV is quite different from linear as it’s much more granular and requires deep audience knowledge. This is why having the right partner will ensure ad dollars are being effectively spent.
These three top trends are shaping the streaming landscape and, thus, its communications. But it’s a fast-moving space, so stay tuned for future developments!