6 critical ideas shaping the future of streaming

This week, Ad Age brought together leaders from some of the industry’s most buzzed-about streaming services, as well as early-adopter brands and agencies, to discuss what the future holds for OTT, CTV and more. With several major media players entering the “streaming wars” this year—and many more expected on the scene in 2021—a range of industry pros offered up valuable insight into how streaming could transform the $70 billion TV advertising market.
The full day’s sessions, which touch on a variety of topics key to the future of streaming and advertising, are available for viewing here.
Below, we look at six key ideas.
People like ads … if they’re done well
In the world of streaming, consumers generally have two options: pay for a premium subscription to watch their favorite content sans commercials, or put up with ad breaks in return for a free service. Increasingly, brand and media leaders have been emphasizing the latter, testing the waters and focusing on the types of ads shown to work for viewers. “Consumers are saying they will watch and engage and enjoy advertising when you do it right,” says Laura Molen, president of advertising sales and partnerships at NBCUniversal, which launched its own OTT service Peacock this summer. In particular, pause ads and voice-activated command ads have received notably positive consumer feedback, she notes—along with Peacock’s countdown feature that shows viewers how much time is left in an ad break. “We’re seeing a pristine ad environment works.”
It’s imperative to know the nuances of your audience
The value of being in tune with your viewers, especially when it comes to multicultural marketing, cannot be understated. “There’s a big difference between hitting someone’s heart [and] hitting someone’s device,” says René Santaella, executive VP of digital and streaming media at Spanish-language entertainment company Estella Media. Top-of-funnel emotional connections go a long way, he says, especially among Hispanic communities in the United States, which is a broad demographic that’s increasingly driving media growth and is being valued by many in the advertising world more than ever before. “Marketers and brands need to realize it’s still really valuable to have contextual targeting. Don’t go all-in on addressable, trying to reach [consumers] that way through technology,” he says of those “tried and true” marketing principles.
Don’t discount the appeal of streaming ‘live linear’
While OTT, CTV and other on-demand video services are well known for vast catalogues of television shows and movies, an emerging trend has seen those same streaming platforms increasingly offer live programs that have traditionally been linear-only, such as news and sports. “News is a brand-safe environment,” says Christy Tanner, executive VP and general manager of CBS News Digital, who notes that this year’s U.S. election cycle demonstrated that the demand for “live linear” streaming exists. For example, Tanner says, more than 20 million people tuned in to watch CBS’s exclusive Democratic presidential candidates’ debate in February, pre-pandemic. But then, roughly that same number also joined the network for its election night coverage last week—a non-exclusive event that was “streaming everywhere,” and carried by almost every major network in the country.
FAST is moving quickly
Otherwise known as free ad-supported streaming television, this OTT format has been gaining attention recently among newer entrants into the streaming space, with platforms including ViacomCBS’s Pluto TV, Comcast’s Xumo and NBCUniversal’s Peacock dabbling in the model. “I think we’ll see the growth of AVOD. It’s simple: we’re, as a consumer, for the most part, kind of conditioned to deal with ads. And the way that ads are kind of shown today, you’re not always stuck watching an ad in its entirety,” says Quincy Newell, the founder and CEO of TwentyOne14 Media. He adds that the adoption of free ad-supported platforms is an “economic question” for some consumers who don’t want to, or can’t, pay for multiple streaming subscriptions; they’re willing to pay the price of their time to watch an ad in exchange for free content access. “If I wanted to cobble together my best shows I’d like to watch, I might have to have five subscriptions.”
Marketers are wary of high-risk, no-guarantee bets
With the public shifting en masse to embrace OTT, and media giants clamoring to get in on the action, it’s important for those in adland to not get swept up in the hysteria of the “streaming wars.” Fresh in the back of many marketers’ minds is the cautionary tale of Quibi, the short-form, mobile-first streaming service that secured $150 million in pre-launch ad commitments—on top of nearly $2 billion to populate its content library—only to shut down less than six months after its debut. For Jeff Hagen, group director of connections planning and investment at the Coca-Cola Co., getting in on the ground floor of a new streaming service isn’t worth rolling the dice for an unproven and potentially costly model. “There’s a lot of risk with little guarantees,” he says, adding that with plenty of existing streaming platforms to approach, “the gambles aren’t worth it.”
Ad dollars are shifting, along with eyeballs
The ongoing coronavirus pandemic has accelerated natural shifts in many sectors, and in the TV marketplace, that means more consumers than ever—both cord-cutters and cord-nevers—are embracing streaming as opposed to linear television. “I think the impact of COVID really validated our reasoning behind that shift,” from robust linear spending to OTT, says Sara Johnson, VP and group director of video investments at Carat. She says that with a fragmented market and a decline in linear ratings, that shift will be evident in future Upfront conversations, too. In addition, when moving ad dollars from linear to streaming, marketers and media pros should be mindful of how basic advertising elements such as frequency can be perceived differently in an OTT environment. NBCUniversal’s Laura Molen sums it up succinctly: “We’d rather have consumers have less ads than be annoyed by ads.”