DALLAS—New research from Parks Associates documents the effectiveness of ads in ad-supported streaming services with a survey that finds nearly one in four users (23%) of ad-supported OTT services said they often click on ads that they watch. The same percentage (23%) also reported that they “often” buy things they see advertised.
The research report Ad-Based OTT: Growth in FAST and AVOD Services explores factors driving the growth of ad-based online video, profiles and compares market leaders, and assesses consumer preferences in watching ad-based content.
“Now, 37 million US internet households use at least one advertising-based OTT streaming service,” said Alan Bullock, senior contributing analyst, Parks Associates. “Hybrid models, especially when AVOD or FAST are included, enable quick customer acquisition and a ‘try before you buy’ experience with the content offering. Advertisers can reach many people, and consumers can get a lot of free content.”
Ad-based services are benefiting from the current uncertain economic climate. Inflation and fears of recession are causing consumers to evaluate discretionary spending, and switching from legacy pay-TV or subscription-based streaming services is a means of cutting costs, the researchers said.
“As consumers continue to move away from traditional pay-TV services, they will first seek out ways to watch the content they want in ways they are accustomed to—a relaxed, lean-back experience,” Bullock said. “Even so, ad-supported streaming services should strive to be more than simply traditional TV on the internet. This is a time for thoughtful data-justified innovation, building a better experience than the living room TV of the past could ever offer.”
