Opinions on CTV Ads in an Increasingly Ad-Supported World
by Frankie Karrer5 min read
- Only 14% of consumers say they are willing to pay for ad-free CTV content.
- Almost 40% of consumers would be willing to watch 3-4 ads per program that are personally targeted to them.
- 93% of consumers feel the same or more favorable towards brands that utilize enhanced ads.
- 94% of consumers are more likely to buy from a brand the next time they are in-market for the product advertised after seeing an enhanced ad.
Streaming platforms have spent the last year working to include ad-supported tiers on their platforms. But how do consumers feel about the ad experience on Connected TV?
CTV Platforms Are Still Figuring Things Out
Over the last year, rising interest rates and a tumultuous economy had led streamers to demonstrate their interest in more ad-supported content on Connected TV to offset household expenses. And streaming platforms have delivered—HBO Max, Disney+, and even Netflix all added ad-supported tiers to their lineup.
It hasn’t been completely smooth sailing for these streaming platforms. Events such as Netflix’s efforts to crackdown on password sharing have made headlines, despite the retraction of the policy in the U.S. after some fallout. Ultimately, it looks like this move from the streaming giant might not help them attain their goal: more subscribers. One survey from research organization Time2Play found that around 80% of Americans who are currently password sharing on Netflix wouldn’t get their own account if they couldn’t share. And even Hollywood disagrees with this policy—YouGov and Variety found that 38% of entertainment industry insiders strongly disagreed with Netflix’s move to cut down on password sharing, and only 8% strongly agreed with the move.
For the rest of the streaming world, additional reports of ad fraud and repetitive ad loads have made it clear that there are still kinks to work out in the world of ad-supported Connected TV. But for consumers, it looks like they are willing to overlook these issues to save a dollar or five.
How Consumers Feel About Connected TV Ads
According to a survey from AppsFlyer, most consumers feel fairly positive about the prospect of more ad-supported content in exchange for lower prices on their subscriptions. Only 14% of consumers say they are willing to pay for ad-free CTV content, no matter the amount of ads or the cost. Of those willing to see ads on CTV, 30% say ads just don’t bother them, and 41% say that cost would be a factor in their opinion of whether the ads were worth it.
However, when it comes to what might lead consumers to cancel a subscription on CTV, ad frequency is one of the biggest drivers. Appsflyer found that 39% of consumers say they might stop engaging with CTV if there are too many ads shown to them. As seen in the chart below, when it comes to general ads, almost half of consumers are willing to watch one or two ads during a program. But that inclination improves when it comes to ads that are relevant for the viewer—almost 40% of consumers would be willing to watch 3-4 ads that are personally targeted to them.
But What About Emerging CTV Ad Formats?
Another way that brands can improve the ad environment for streaming viewers is through new and emerging ad formats. One example of this is enhanced ads, which can include features such as dynamic QR codes, change their messaging based on time of day, or are location specific. A study from LG Ad Solutions revealed that 93% of consumers feel the same or more favorable towards brands that utilize enhanced ads, and 94% are more likely to buy/use these brands the next time they are in-market for the product advertised.
There are many enhanced ad formats available to brands looking to appeal to consumers on CTV. One of the most well known is QR codes—You may recall the infamous Coinbase ad from 2022’s biggest football game of the year, which featured only a QR code floating around the screen. According to LG Ad Solutions, 1 in 2 consumers say they are more likely to engage with these kinds of ads, and 94% feel the same or more favorable towards brands that leverage QR codes.
Other enhanced ad options include location-based formats, which utilize audience location data to personalize their ad experience. For example, brands can serve users ads that inform them of the closest store location to them. The survey found that 4 in 5 viewers enjoy the experience of watching these types of ads. Brands can also capitalize on this kind of advanced ad format to serve ads relevant to the weather in a user’s area—an ad experience that 72% of those surveyed liked.
There are of course some naysayers to ad features such as QR codes. After all, it’s just as easy for consumers to look up a brand through a search engine on their mobile devices as it is to scan a QR code (maybe even easier, considering they can do so even after the ad ends). And the tracking capabilities of QR codes become obsolete when brands are working with a CTV ads platform with comprehensive cross-device tracking and CTV measurement capabilities. But it seems that for consumers it’s less of a matter of convenience, and more a matter of novelty. LG Ad Solutions found that preferences towards enhanced ads is increasing, with 82% of consumers stating they like enhanced ads overall, and 49% stating they are more likely to engage with enhanced ads.
As more and more focus is placed on ad-supported Connected TV content, it’s clear streaming platforms still have some work to do. But luckily, it looks like consumers are overall fairly satisfied with the experience of watching ads while streaming. Ultimately, in order to make an impact in this new world of CTV, brands should be implementing emerging ad formats in order to stand out from the crowd and continue to appeal to consumers.
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1 Consumers and Ad-Supported Streaming: Looking Forward to 2023 (MNTN Research)
2 Netflix Crossed a Line (The Atlantic)
6 Enhanced Ads Study (LG Ad Solutions)