The world of streaming entertainment is changing. With concerns over slowing subscriber growth and the rise of free and/or ad-supported services, today’s streaming landscape is far different than the one from five years ago. Nothing is more emblematic of these changing streaming seas than Netflix’s about-face on advertising.
Long has the company resisted calls to incorporate an ad-supported tier on its service, almost looking down on even the idea of entertaining such an option. Yet, ever since the world’s largest streamer reported a 200,000 subscriber decline during the first quarter of 2022, Netflix has decided to embrace advertising as quickly as possible.
Of course, Netflix is not alone as Disney+ is also planning to introduce an ad-supported tier this year, joining Hulu, HBO Max, Paramount+, and nearly every other streamer in doing so.
And while having lower-priced options to stream will be good for consumers attempting to save on their monthly bills, it also comes with increasing concerns over privacy and data safety. At this point, we have all lived long enough in the digital world to understand how much information existing online provides to platforms and advertisers, but according to reporting from Fast Company, connected TV advertising are an especially aggressive source of data mining.
With Apple and other mobile providers moving quickly to provide customers clearer, more straightforward options to opt out of sharing data with apps, advertisers are increasingly looking for new avenues to get information from consumers, and as streaming enters its next phase, streaming services and operating systems are becoming their perfect partners.
While Smart TVs and streaming devices do have options in their settings to restrict data sharing, they are usually buried in different menus, and users are never prompted to opt into sharing, meaning that all of an individual’s viewing habits are easily collected and shared with advertisers. Additionally, even if a customer is able to figure out how to limit what information is shared via their connected TV, that decision does not apply to the individual services used on the TV.
So, even if you find the proper settings on your Roku TV and opt out of data sharing, that doesn’t mean that Disney+ will be unable to share the information that it collects.
And what makes streaming data so valuable for advertisers, especially the info that comes directly from the services, is that it is direct information about customers, because it is tied to their name, email address, and other details that are identifiable across platforms.
Therefore, advertisers are able to use technology companies like Trade Desk to aggregate information about consumers from multiple sources in order to piece together a complete picture of their viewing and spending habits. So given the specificity of streaming data, an advertiser is often able to see if a customer eventually purchased a product after being served an ad during a commercial break.
Then, they are able to continually serve similar ads to the customer on streaming, social media, and websites through highly targeted programmatic campaigns.
“We find the same user, and if the advertiser can match that from a different channel, we would be able to use that for CTV targeting,” Trade Desk’s general manager for TV Ash Gangwar told Jared Newman at Fast Company. “The data does not necessarily have to come from the CTV environment itself.”
While the most generous reading of the situation allows that advertisers hope to provide consumers with the most appropriate ad experience — both by highlighting products that they are interested in and avoiding those that they aren’t — this rapid expansion of personal data through streaming services comes with significant privacy concerns.
“They have deliberately ported over the surveillance advertising complex into the streaming video OTT [over-the-top] system,” the executive director of the Center for Digital Democracy Jeffrey Chester said. “And the technology, marketing, and ad practices — the expansion of monitoring viewers and families — is a four-alarm privacy and online consumer protection fire.”
The amount of information that streaming services have on their customers — especially long-established platforms like Netflix — is extensive. And as Apple makes tracking users more difficult for advertisers and websites continue to make tracking cookies less abundant, customers are likely to see streaming data become more and more the backbone of their digital profile.