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Report: Majority Have Cut the Cord, Will Lost Linear Advertising Take Over Streaming?

David Satin

The cord-cutting revolution has become more of an evolution this year. There are fewer and fewer adults subscribing to expensive pay-TV packages and media companies are re-calculating the best ways to further monetize streaming.

According to a report from Samba TV, just 48% of U.S. adults now have a traditional TV subscription, either via cable or satellite. Linear TV is one of the most conventional ways to reach customers with ads, so advertisers have had to start thinking outside the box if they want to get people back in stores this holiday season. With the exodus from cable continuing, it’s no wonder that companies like Netflix can reportedly ask advertisers for exorbitant rates to show ads on its planned ad-supported tier.

“Half of U.S. adults report that they no longer have access to a linear television subscription,” Samba co-founder and CEO Ashwin Navin said. “These shoppers are poised to spend hundreds of billions of dollars on holiday gifts and yet will be completely unreachable by any traditional TV campaign but can be highly engaged through other means. The shift to streaming has become ubiquitous across every age group with new technologies such as voice assistants and direct from TV purchasing emerging as trends to watch this year and into the future.”

There are some hints in Samba’s data as to how advertisers can proceed. Millenials — only 33% of whom have linear TV subscriptions — are finding other ways to spend money simultaneously with streaming. Twenty-one percent of millennials reported making purchases directly through their TV and more than one in three (34%) have clicked a QR code from a TV commercial while streaming a program to make a purchase.

That trend is not unique to millennials either. Thirty-eight percent of U.S. adults surveyed by Samba reported shopping online while watching streaming content. This highlights the need for advertisers to develop smarter ads and cross-screen connected campaigns that can reach consumers whether they’re using smart TVs, tablets, or mobile phones to stream content.

Samba’s numbers are especially pertinent with the arrival of fall which signals the traditional start of the TV season. Fall also means the start of the holiday shopping season, so advertisers are getting their best campaigns ready for the fall shows. How will they be able to reach the maximum number of streaming customers?

Companies like Amazon may provide a glimpse of the future when it comes to streaming advertising. Earlier this year the e-commerce giant began testing virtual product placement (VPP) technology. That allows producers and editors to insert products into shows digitally after production is complete. Amazon claims that brands are finding value in VPP. The company says that an unnamed consumer products goods business saw a 14.7% increase in purchase intent for their campaign, and a 6.9% increase in brand favorability.

There’s also a good chance that the proliferation of free, ad-supported streaming will continue. FAST platforms become profitable very quickly, so expect more companies to embrace FAST options as customers continue to leave linear TV.

Digital product placement into streaming shows can be downright obnoxious when it’s heavy-handed, but with fewer and fewer customers viewing ads via linear TV, streaming companies may feel they have no choice but to saturate their shows with products to keep revenues up.

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