October 24, 2022 | Authored By
Last week I read a Wall Street Journal article on streaming ad innovation. In it, I was glad to see experts and partners like Kelly Metz and Adam Gerber outlining the specific challenges faced by some streamers, especially those new to advertising—transparency, measurement, consumer experience, frequency capping. But the article’s first sentence—implying that all of ad supported streaming “remains rife with challenges” couldn’t be further from the truth.
Rather than paint all streamers with a broad brush, or make assumptions, it’s time to face facts.
Based on what we are seeing and the countless conversations our teams are having with marketers, the gloom and doom about AVOD is overhyped. Of course, that doesn’t make for an eye-catching headline. But when we talk about streaming, a fixation with the problems is obscuring the actual advances that have been made. And, frankly, there’s a lot more than people realize. So, let’s stop admiring the problem and start celebrating the progress—and embracing the real solutions that exist today.
To really understand the progress we’ve made, we must remember the magnitude of this transformation. Compare it to the last major shift in our industry: Cable. Back then, consumers got more choices, marketers got more contextual relevance, eyeballs and behaviors shifted. Yet, the industry kept using the same measurement system, trading methods and business models. Effectively, it was an expansion of the TV universe, rather than a transformation. And we know what happened: Ad inventory went up—chipping away at the consumer experience—and innovation stalled.
But not today—for two reasons.
First, this time we’re facing a fundamental transformation head on —and rethinking our entire approach. Digital platforms changed the dynamic, and the technology innovations of the last decade have given us permission to ditch old strategies and approaches. Those of us doing business in today’s modern, digital marketplace, are embracing modern, digital tools.
Second, no industry leading marketer wants to repeat the sins of the past: adding ads indiscriminately, forsaking the consumer experience, deploying outdated measurement, resisting transparency in digital. Compared to the Cable shift, this moment is incredibly liberating.
For the first time in decades, an industry steeped in legacy has the opportunity—and the tools—to completely rebuild. And that’s the story we need to tell.
As video consumption continues to grow, already 50% is via streaming and projected to be 70 percent in 5 years. And within streaming, the majority of viewing is already ad supported, which is also expected to grow as demonstrated by the recent shift of SVOD-only players into advertising.
This shift to digital and streaming has introduced new technologies, new data, and new capabilities that offer fixes for old problems and the creation of new experiences and capabilities. For example, did you know that one of the biggest drivers for low audience engagement—repetitive, high frequency ads—has a solution? Frequency management tools coupled with Ad IDs, which allow marketers and programmers to track and manage which ads deliver how often across different platforms, and prevent wasted exposures, are ready to use today. And as targeting has gotten more sophisticated, audience attributes have rendered traditional age and gender proxies less relevant, making the advertising viewers see in streaming only more relevant.
Progress is readily apparent, with significant benefits for both viewers and advertisers. Consider how, when it comes to the consumer experience, the average 17 minutes per hour of ad-time we experience in linear TV has been cut by two thirds in streaming to as low as four to five minutes. Or how, thanks to self-serve technologies and trading platforms, tens of thousands of direct-to-consumer brands, e-commerce marketers, small and local businesses that were once locked out, can now take advantage of the power of streaming to connect with their customers.
Nowhere does progress feel more apparent—and ignored—than in measurement. Today, we’re no longer dependent on a monolithic measurement solution. Instead, when we issued a specific call to action last year, we discovered more than 150 innovative measurement companies, that more accurately reflect today’s consumer behavior and can help marketers measure impact. So, when the current currency disappears in 2024, there are plenty of alternatives.
From the consumer experience to measurement, and everywhere in between, the real AVOD story isn’t debating whether solutions exist (they do); it’s whether programmers, agencies and marketers are ready and willing to adopt them (and some of us are.)
When progress is obscured, it can be hard to tell which companies are already adapting. Fortunately, across every corner of this industry, we are working with partners committed to accelerating our industry’s transformation—and we’ve already shifted in four specific ways:
- We’ve created a superior content experience for viewers and advertisers by sitting marketers next to engineers. By working with partners to build proprietary technologies and new ad innovations, we’re delighting consumers and clients, testing experiences that go far beyond 15s and 30s. (And if you want a seat on the Peacock Council, just give us a call.)
- We’ve built interoperable systems that work seamlessly for advertisers—and have seen how integrating technology across buyers and sellers will help accelerate the industry’s transformation to a modern =model.
- We’ve invested in data and identity. As the industry hurtles toward a cookie-less future and one that is less reliant on panels and proxies, marketers need media partners that can dimensionalize audiences and deliver consumer insights. That includes those willing to invest in new models, and build unified platforms based on first-party data. Identity is the new currency.
- We’re accelerating new measurement. Rather than lean on outdated (and inaccurate) metrics, the new era will rely on multiple measurement models. And this future of measurement already exists: Second-by-second accuracy, cross platform reach and frequency, mid-funnel attribution, ROI, attention, and emotional measurement and so much more.
And this is just the beginning. To realize the full potential of this transformation, we must recognize and adopt the innovation that already exists and seek out more partners building for the future. When we do, we will accelerate the progress we’ve already made —but we must all see it, own it, and push it forward, together.