Report: 70% of Streaming Viewers Who Clicked an Ad Bought Product as Ad-Supported Streaming Continues to Grow
The relationship between advertisers and subscription video-on-demand (SVOD) providers has transitioned from adversarial to downright cozy. When SVOD services first began to proliferate, one the main draw to these platforms was that unlike traditional TV providers, they were offering ad-free video at a fraction of the cost of a cable or satellite subscription.
Nowadays, streamers are pivoting toward making their businesses profitable, not just big, so that means incorporating ads in some form. Most major streaming services that launched offering just a premium, ad-free experience now offer an ad-supported plan at a lower price. The spread of ad-supported streaming is having a big effect on retailers, according to a study from media research firm Aluma Insights.
Aluma’s data indicates that half of online adults recall seeing shoppable ads on television. Of these consumers, 39% have engaged this type of ad, and 70% of them report purchasing a featured product, either directly through the ad or sometime thereafter.
The survey found that users of social media videos engage with shoppable ads at an even higher rate of 61%. However, only 60% of those who report engaging with social media video ads bought a featured product. This suggests that streaming TV audiences — who are likely to be older than social media audiences — are more likely to purchase a product via video ads, either because they have more disposable income, or because there are fewer distractions around TV ads than via social media.
The effectiveness of clickable ads on streaming services highlights what a valuable resource streaming platforms have become for ad agencies. They offer a way to engage with ads, either via streaming on mobile devices or connected and smart TV, that traditional TV simply cannot match. Customers who can use their remotes to be taken directly to a product page are much more likely to buy something, as Aluma’s data indicates.
Will that lead to ad agencies having to pay streamers more for the right to advertise on their platforms? It’s possible, especially if streamers can point to data stating that shoppable ads are leading to higher revenues. It was reported in September that Netflix was asking for much higher-than-normal rates for ads on its ad-supported tier, which launched in November. Netflix pushed back on that reporting, but recently the company has had to refund some advertisers because it could not meet contractual impression totals.
The success of shoppable ads on streaming services will certainly contribute to helping ad-supported streaming spread further. As long as streaming platforms can find the right balance in not peppering customers with too many ads while still satisfying contractual obligations to ad agencies, the relationship between streamers and advertisers should continue to blossom.