Survey: Users Want More Entertaining, Content-Specific Commercials as Ad-Supported Streaming Proliferates

Commercials stink, don’t they? When you’re streaming your favorite movie or TV series, the last thing you want is an annoying ad break with repetitive commercials that seem to go on longer than the show itself. Fortunately, many streaming services that offer ad-supported video-on-demand (AVOD) offer lower ad loads and less repetitive commercials, but that doesn’t mean there’s no room for improvement.

A new survey from MAGNA Media Trials and Roku highlights just where those improvements should be focused. The survey found that 94% of users would avoid commercials less often if changes were made in the type or frequency of TV ads.

Roku and MAGNA tested three new types of ads on survey respondents to see what type of experience they enjoyed most.

The three new ad formats tested were:

• “Thematic Tagged Vignette”: A 30-second animated ad where a brand celebrates streaming.
• “Roku Original Vignette”: A 30-second ad where a brand references the Roku Original show being streamed.
• “Watch Alongs”: Ad breaks where a brand sponsors discussion about the show or movie being streamed.

According to the survey, these ads were much more popular than traditional TV ads and more effective. All three of the new ad types posted stronger results than traditional commercials for top-of-mind brand recall (+57% new vs. +43% traditional), brand favorability (+8% vs. +3%), and intent to search (+16% vs.+ 9%).

The most important factor to users was that their ads be entertaining. Respondents answered at a rate of 60% that they would avoid ads less often if the ads themselves were more entertaining. Fifty-three percent said they would watch more ads if doing so offered value in return, and 48% said they’d watch ads more if they offered new information about a product or brand.

“In the current advertising environment, it is important to recognize that viewers can easily skip over advertising, but our study found they are less likely to do so if the ads are as entertaining as the programming and present a more enjoyable experience,” MAGNA EVP Kara Manatt said. “One of the most memorable formats for viewers is Watch Alongs, likely because the advertiser is offering the viewer added value to the show they are watching.”

The survey offers good insights for advertisers and streaming services alike. Nearly every major streaming service now offers an ad-supported tier, and streamers would do well to partner further with advertising agencies to tailor ads that users are most likely to watch. While those customized ads would obviously be more expensive to produce, they also seem to have a better return on investment, based on the Roku and MAGNA study.

The alternative is one that some streamers are already dealing with. Netflix has reportedly had to refund some advertiser money because it could not lure enough users to the ad-supported plan it launched in November. Better ads won’t help bring in more users by themselves, but they could boost the number of customers that engage with ads and buy products, which might ease the need for such refunds on the part of streamers.

“The takeaway for marketers is clear,” Roku executive Asaf Davidov said. “The key to winning the entire streamers’ journey is surprising and delighting beyond the traditional TV spot.”