39% of Former Netflix Password Sharers Plan To Opt for the Ad-Supported Tier
by Frankie Karrer
2 Min Read
Golden Globe nominations and new ad tiers predict big things for the small screen
4 Min Read
Despite the frenzy of the holidays, advertisers and publishers may have spotted an unexpected lull in activity last week when Google Ad Manager went dark. Perhaps the most popular ad exchange, many advertisers saw the impact of over-relying on just one performance channel, especially during this essential time.
While Google rushed to sort out their tech difficulties, a new source for impressions debuted as Disney+ officially unveiled their ad-supported tier. Connected TV continues to expand its ad offerings as premium channels, Netflix and Disney+ included, create ad inventory within their top-rated and award-nominated shows. For those that have yet to explore the largest screen in the house, now may be the time to shift some budget and take advantage of CTV’s continual growth.
Last week, Google Ad Manager experienced a three-hour outage. Impressions and revenue ground to a halt as advertisers and publishers watched their numbers dwindle to zero. Paul Bannister, chief strategy officer at CMI Marketing Inc.’s Cafemedia said, “We and all the publishers we work with are getting no ad revenue. Literally every company we know has been affected.” According to his interview in the Wall Street Journal, “he called the outage unprecedented in its scope and duration.”
While perhaps unprecedented, the ripple effects of this type of outage show the overreliance on a single performance platform. Advertisers take a large risk putting all of their eggs (read: ad budget) in one basket which could make or break their strategy, especially during the pivotal holiday season. This strategy is especially called into question as the rise and impact of Connected TV has continued to make headlines and can step in as another performance channel.
One streaming channel making headlines this week was Disney+. The ad-supported tier that they announced back in August of this year finally became available. This addition to the CTV space only extends the reach of this channel and creates valuable inventory for advertisers to take advantage of.
Due to the recency of the release, it’s still unknown how many current and new subscribers will make the jump to the lower-priced, ad-supported tier. Kantar Entertainment on Demand released the results of their Q3 survey, asking those that were subscribed to other channels that introduced an AVOD channel, including Hulu and HBO Max if they had switched to the ad-supported option. The results showed that almost 1 in 4 subscribers (23%) made the switch. Disney+ and Netflix, whose ad-supported tier launched last month, could see the same directional shift. This also doesn’t account for new subscribers. How many potential subscribers were held back by a high price tag and now finally have an option built for them? DTVR projects that by 2028, ad-supported plans could account for 88% of total global subscriptions for Disney+.
Netflix and Disney+’s impact on the Connected TV space can’t be understated. GroupM has projected that the entrance of these two channels into the ad space will bring in an additional $1.2B on CTV ad spending in 2023. The overall projected ad growth for Connected TV will be up by 29% while search and social media dwindle behind with just 10% and 7% growth projected respectively. As growth continues to slow down and potential blackouts cause dramatic results for businesses, Connected TV seems to be the natural place for advertisers to explore and diversify their ad channel mix.
Streaming content has been quickly carving out a place for itself in the mainstream media. Viewership hours passed an important threshold earlier this year, but another reminder of the impact of Connected TV is the recent announcement of the Golden Globe nominees. Both HBO/ HBO Max and Netflix tied for the number one spot in TV nominations with 14 nominations a piece. Netflix received another 9 nominations for its original films. The Golden Globes are the first indicator of the award season to come and streaming companies can expect to see their name on nomination lists across the various ceremonies.
By adding in Connected TV advertising, advertisers can now find themselves in front of award-winning, highly visual content, perhaps a stark contrast to the varying quality of placement across the internet. Connected TV is a valuable addition to an advertiser’s ad mix, not only providing the diversification needed to ensure any always-on presence, but also premium placement among top-streaming content.