Volume 9 No. 4: Advertising’s role in the viewership battle
The world embraced streaming during the pandemic, but as life starts returning to normal, subscription growth rates are slowing.
However, predictions for double-digit growth continue into the near future. eMarketer expects streaming ad spending to reach $10 billion by the end of 2023.
Advertising's role in the streaming battle for viewers.
Each week, we break down another marketing trend so you can skip having a breakdown.
The challenge for many streaming companies has been staying competitive as more media companies launch their own streaming platforms.
The streaming wars gained intensity in 2019 when Disney+ entered the playing field. Netflix, Amazon Prime and HBO Max were already fiercely competing for consumer attention.
Netflix, once the clear ruler of this category, saw a huge loss of 970,000 subscribers during Q2 last year. This resulted in Disney+ catching up in subscribers due to a bundle with ESPN+ and Hulu, and reaching 205.6 million in Q2. Although Netflix saw a rebound in subscribers in Q3, the company was already looking for new ways to improve profitability.
The solution for platforms like Netflix and Disney+ in staying ahead seems to be adding advertising to their platforms.
- Streaming TV advertising is still growing. Advertisers are investing more in streaming as nearly 30% of TV viewing time takes place on streaming platforms.
- Advertising remains a key part of TV. Platforms like Netflix originally relied on subscription fees to generate revenue. Since the number of subscriptions dropped, they launched a lower-priced ad-supported plan, including 15- and 30-second commercials and a lower subscription cost.
Key Takeaway: As subscription growth declines, streaming platforms are launching ad-supported tiers to increase profitability. The result? TV advertisers will gain more options for connecting with consumers.
The Growth Lab
Question: How do you push ideas from good to great?
We ask an experienced group of business leaders, marketers and statisticians about strategies for success.
Answer: "Start by working with people who are vested in the outcome and can torture, morph, laugh at and sleep on ideas while they evolve. Great ideas create both near and long-term advantages. Don’t settle for short-term gains alone. Find ideas that are financially sound, authentic, compelling and bring an operationally elegant experience."
— Dan Cleveland, VP Strategy
Dan’s known for finding unconventional ways to improve clients’ campaign performance. He’s been finding smarter ways to achieve success since doing exactly that on the soccer field as a kid.
Watch: The Art of Innovation
Here we celebrate books, podcasts, videos, and influencers that are actively pushing marketing into the future.
Great innovation occurs when you “jump to the next curve.” To allow room for products or services that set new standards and industry norms, companies should define benefits rather than what they specifically do. That is the third step in the art of innovation, according to venture capitalist and former Apple chief evangelist Guy Kawasaki. Kawasaki speaks at TEDxBerkeley about his ten steps to create solutions that power innovation.
Our favorite insight? Innovators often have an idea of their audience and the intended purpose of their product, but people will always use products in unpredictable ways.
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