As streamers race to roll out FAST channels and ad supported services, a new survey from Yahoo and Publicis Media suggests that consumers are paying the most attention to ads that are placed in subscription services and that brands need to develop more finely honed CTV ad strategies.
The results in a joint research study titled “CTV Ad Attention & Receptiveness” are important for an industry that has tried to right its finances by offering more ad-supported services. While the shift towards advertising has created new revenue streams, it also raises serious questions about the value of those ads and their effectiveness in engaging consumers, many of whom originally switched to streaming services as a way of avoiding heavy ad loads on cable and broadcast TV.
The study noted that AVOD is rapidly gaining traction and is projected to reach 50% of the U.S. population, offering brands a significant opportunity to connect with consumers. Emarketer reports that ad spending on paid subscription services is expected to increase by 51% to $9.48 billion in 2023, while CTV ad spending as a whole will exceed $26 billion in the same year.
That means that brands must optimize their CTV strategy to capture attention and positive brand sentiment in an increasingly competitive market, the researchers said, adding that to stand out, advertisers must understand the key variables that impact consumer attention and receptiveness to ads on CTV and develop effective strategies to optimize campaigns.
To answer some of those questions, the study investigated four ad-supported streaming app types: paid-subscription-based services that were either Hybrid (Hulu, HBO Max, Paramount+, Peacock, Discovery+, Disney+, Netflix, Amazon Prime Video) or vMVPD (FuboTV, YouTubeTV, Sling, Philo, DirecTV Stream), and non-subscription-based streaming apps that were either FAST (Tubi, Pluto, Roku, Crackle, Vudu, Xumo) or Smart TV FAST Channels (Amazon Freevee, Vizio’s WatchFree, Samsung TV Plus, LG Channels).
Overall the study found that ad attention is higher for more "intentional" paid subscription services. Viewers tend to pay more attention to ads on applications that are paid or subscription-based, particularly vMVPDs like YouTube TV, FuboTV, and Sling, as well as hybrid services like Hulu, HBOMax, and Paramount+ where there is “more intent” behind programming choice, the report found.
The research indicates that while viewers tend to pay more attention to ads in subscription-based applications, ad attention still varies across all app types. Some apps, such as Xumo and the Roku Channel, outperform the FAST benchmark in terms of attention. Therefore, even in a FAST environment, it is important to be selective with the applications chosen for airing ads, the research found.
Overall, the study found that consumers recognize the role of advertising in making less expensive programming possible and generally welcome ads in CTV environments. Nearly half (46%) of respondents said they would rather pay less and receive some ads when adding a new streaming service. Additionally, 82% of CTV viewers expect ads on free streaming services, and 7 out of 10 AVOD users report being at least somewhat satisfied with their CTV ad experience. Moreover, a significant percentage of respondents found ads to be useful, with 56% agreeing that ads and commercials provide them with useful information.
The study found that genres with higher engagement during viewing also had a higher share of ad attention. Crime dramas had the highest attention percentage at 46%, followed by political commentary/coverage at 39%, and game show competition at 38%. On the other hand, awards programming had the lowest attention percentage at 14%, followed by sci-fi at 16%, and action/adventure at 20%.
As expected, the study found that repetition can be a major annoyance and negatively impact brand sentiment. Over two-thirds (67%) of viewers are annoyed by seeing the same ad more than once within the same ad pod. Ultimately, Yahoo and Publicis Media found that attention drops when viewers are exposed to the same ad within two minutes, and remains lowered for ads aired less than 5 minutes apart. The study suggests an attention “sweet spot” of 6-10 exposures, while maintaining an optimal gap of 12 - 24 hours between exposures to avoid brand burnout.
Placement within ad pods was also important. On average, ads aired in the first in-pod position capture 6% more attention than ads aired in the mid or last pod position. If an ad airs in the first in-pod position, it captures at least 2 seconds of attention 38% of the time. In terms of attention time, ads aired in the first in-pod position capture 1 second more attention than ads aired in the mid or last pod position. On average, if an ad airs in the first in-pod position, viewers pay 11 seconds of attention. Meanwhile, shorter pod durations also matter, and get more attention and co-viewing, with consumers more receptive to them.
The timing of ad breaks has a significant impact on the receptiveness of viewers, the study found. Unnatural breaks, such as those that cut off a show mid-sentence, are considered "the worst," and many prefer the more natural breaks seen on cable. In fact, two-thirds (66%) of respondents said that ads that cut a show off at an unnatural place are the worst ad experiences, while 61% said the same for ads that cut a show off at a cliffhanger, and 47% for ad breaks that aren't evenly spaced out throughout a show. Many viewers want the streaming ad experience to be more comparable to the "natural" cable ad experience, with 55% saying that cable delivers more predictable ads and 51% indicating that they would like streaming ad experiences to reflect the cable ad experience. Most respondents also said vMVPD and Hybrid services deliver the most “natural” ad breaks.
The research was based on a dual-methodology approach, using both Big Data research and a Consumer Research approach. The Big Data research involved facial recognition and ACR data to capture attention metrics, analyzing 66,000 ads across four CTV ad environments, 1.3 million impressions, 5,000 households, and 15,000 individuals in 25 DMAs. This data was supplied by TVision. Additionally, the Consumer Research Approach included qualitative interviews and feedback, as well as a quantitative survey of 1,000 adult CTV consumers, which was executed by Open Mind Strategy.
