i3 - September/October 2017 - 51

Business

By Steve Koenig

M A R K E T B E AT

Develop an Advertising
Strategy for Streaming Video

C

ontent is king, but for ad-supported streaming
video services the right advertising strategy can be
the prince of profitability. Content attracts audiences
and audiences attract advertisers, but the ad-supported
streaming video business model is much more complex.
Setting aside the calculus of content creation and curation,
streaming services must be strategic in their approach to
ad-supported video by understanding viewers' tolerance and
preferences for advertising. New research from CTA explores
these qualities in detail in order to understand the optimal
ad-supported video approach from the viewer's perspective.
It's a study any business engaged in ad-supported streaming
video won't want to skip.
To drill into the effectiveness and engage- the entire ad without being required
ment of ads tied to streaming video, CTA
to do so with the same frequency.
market research employed the cuttingOnly 15 percent of viewers claim they
edge quantitative research technique of
never watch an ad tied to streaming
choice-based conjoint (CBC) analysis in
video without being required. Can the
its Exploring Preferences for Personalized
stickiness of ads be improved?
Content Consumption Experiences study
(August 2017). Mirroring the marketWhat Makes a Compelling Ad?
place, conjoint research requires survey
Understanding the characteristics
respondents to make trade-offs in choosthat influence ad tolerance is the first
ing their preferred experience.
step. CTA's analysis found the type of
Despite viewers' predilection to skip
ad is the biggest factor in fostering tolerads altogether, the study reveals ads tied
ance. Naturally, viewers are more likely
to streaming video are remarkably effecto watch an ad for something they are
tive-for both new shows and products
interested in versus something they're
and services. Some 71 pernot. Next, the length of
cent of U.S. online adults
the ad comes into play.
Ads tied to
who watch ad-supported
Viewers tend to expect
streaming video the length of an ad
streaming video report
investigating a different
are remarkably to generally conform to
show at some point after
the length of the content
effective.
watching an ad for it. And
they're watching. For
69 percent of online adult
example, shorter spots
viewers said the same
for short-form video
about a product or service.
and longer ads with long-form content.
Two-thirds (66 percent) of viewers
To a lesser extent, the number and placewatch ads up to the point where they
ment of ads tied to streaming video
can skip the ad "most of the time" or
also influence ad tolerance.
"all of the time." But interestingly, nearly
Formulating the optimal ad experifour-in-ten (38 percent) viewers watch
ence for streaming video involved the
C TA . t e c h / i 3

choice-based conjoint analysis, where
respondents picked their preferred adsupported streaming video experience
from multiple "real world" scenarios.
Based on the choices and trade-offs
made in the conjoint exercise, the analysis clearly shows a preference for ads
that can be skipped or played prior to
the content. It also shows the ads should
be no more than 15 seconds in length,
but viewers will tolerate up to two ads
tied to a piece of video content. While
this ad strategy is ideal, the research
offers suggestions for advertising models
that operate outside the ideal scenario.
For example, for ads that cannot
be skipped, the length should be very
brief; no more than eight seconds and
they should play before the content
begins. In business models where ads
are 30 seconds or longer, a skip feature
is paramount to boost viewer engagement. For more analysis and perspective
on ad effectiveness for streaming video,
download the full report on the CTA
member site.

The Most Important
Factors Influencing Consumers'
Ad Preferences

14

When Ad
Appears

16

30%
Ad Type

Number
of Ads

19

21

Ad Length

Length of Video
Content Being
Watched
Source:
CTA Market
Research

SEPTEMBER/OCTOBER 2017

51
http://www.CTA.tech/research http://www.CTA.tech/research http://www.cta.tech.com
i3 - September/October 2017

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