Here are the three major digital streaming trends marketers should keep an eye on:
- Digital video is attracting more ad spend
- Marketers are shifting ad dollars to connected TV
- Mobile continues to be the preferred channel for video delivery
Based on how digital ad trends influence content consumption among consumers, marketers must carefully evaluate and tailor their digital, mobile, and connected TV advertising efforts. One great suggestion to help you stay informed about digital ad trends is to sign up for newsletters from publishers like Ad Age, Digiday, and MediaPost.
2020 was an important year for online streaming. As per a survey by McKinsey on Consumer Sentiment During the Coronavirus Crisis, 40% of respondents said they have been streaming videos online with a much greater frequency than they used to before the pandemic began. With 2021 wrapping up, consumers have proven that they rely on streaming services for information, entertainment, and connectivity.
With the pandemic accelerating the trend of more and more consumers opting for at-home entertainment services, marketers are forced to consider the mix of digital streaming in their advertising efforts for the remainder of 2021, and beyond. Let’s review some of the most important digital streaming trends and what they mean for advertising.
TREND 1: DIGITAL VIDEO ATTRACTING MORE AD SPEND
According to predictions from eMarketer, it was expected that US adults would be spending 2 hours and 29 minutes viewing digital videos every day in 2021 – and the real trends show those calculations were conservative. According to Comscore, YouTube, including YouTube TV, ranks as the number one platform in attracting viewers, with over 100 million people watching every month. Netflix, Amazon Prime, and Hulu follow, all with significant audiences and YOY growth rates.
Advertisers are spending more but have more distribution options
This shift in consumer behavior is leading to a boom in digital video ad spend. Accordingly, eMarketer projected Connected TV (CTV) digital video ad spending would increase by an overwhelming 50% in 2021 and reach $4.51 billion, not including inventory from traditional linear TV and addressable TV advertising.
Streaming services like Netflix are creating a shift in consumer behavior that has changed the video commercial advertising landscape forever. Thankfully, advertisers have a lot more options for digital video commercial distribution: they can choose platforms with large, quantifiable audiences or addressable delivery at the household and individual level.
Advertisers need more precise objectives and measures to keep up
“Today, planning and buying digital video ad placements gives advertisers choices to target every level of the brand funnel, from awareness and consideration to Intent and Purchase,” says Tom Adams, Director of SQAD MediaCosts: Digital. “Getting the most out of these expanding options requires well-defined campaign objectives along with precise measurement standards that will clearly define the Return on Ad Investment (ROAI). It also requires skillful application of a budget, based on actual market data and cost intelligence.”
“Getting the most out of these expanding options requires well-defined campaign objectives along with precise measurement standards that will clearly define the Return on Ad Investment (ROAI).”Tom Adams, Director of SQAD MediaCosts: Digital.
It’s clear that digital video is attracting an increasing number of viewers and offers advertisers more flexibility in how they advertise. To be competitive in the coming year, marketers must leverage this trend to increase their visibility across digital video streaming platforms to aid their brand-building efforts and maximize their targeting ad budgets.
TREND 2: MARKETERS SHIFTING AD DOLLARS TO CONNECTED TV
According to a report by CNBC, the pandemic has accelerated the adoption of Connected TV by 5 to 7 years. Previously, the concept of launching a movie on a streaming platform bordered on blasphemous, but we’re seeing it happen now. This was bound to happen, given that 82% of US households now have at least one internet-connected TV device.
Moreover, according to projections from Insider Intelligence, Connected TV was on trend to attract $13.41 billion in ad spend in 2021. That’s a massive increase in spend coming from the 60% of US marketers who indicated they would increase their reach by shifting ad dollars from linear TV to Connected TV and OTT platforms.
Linear TV ad costs are decreasing
We might be seeing the linear TV ad spend change illustrated in the National Football League (NFL) broadcasts: According to Dan Klar, Vice President of Product Development, SQAD MediaCosts: National, “There was a 4% drop in average unit costs for ads aired during NFL games on linear TV from 2019 to 2020. This could be attributed to advertisers shifting some of their ad dollars from linear options to streaming ones amidst the pandemic.”
A 4% drop in average unit costs for ads aired during NFL games on linear TV… could be attributed to advertisers shifting some of their ad dollars from linear options to streaming ones.”Dan Klar, Vice President of Product Development, SQAD MediaCosts: National
TREND 3: MOBILE CONTINUES TO BE THE PREFERRED CHANNEL FOR VIDEO DELIVERY
In 2019, the average US adult was spending 3 hours 43 minutes on their mobile devices; now mobile is the preferred platform for consuming video content compared to linear TV. This change is likely thanks to bigger mobile screens, high-speed mobile networks, and unlimited data plans. The result is: US consumers spend more time-consuming content on their mobile devices than they do on TV.
Advertisers are catching onto mobile advertising
Mobile advertising grew to $69.9 billion in 2018 and made up 65% of total digital ad revenue in the US. Research shows that mobile video ads have proven to be a key driver of digital advertising. Digital video ads generated an additional $10.2 billion in revenue, so marketers can expect this medium to continue gaining more prevalence with the introduction of increased bandwidth and faster 5G mobile networks in the next few years.
“There is no indication that digital will do anything but grow,” says Mark D’Andrea, Chief Revenue Officer at SQAD, “especially on mobile. As a result, advertisers are setting their sights on a strong digital expansion, and they need reliable market data to inform their strategies along the way.”
“Advertisers are setting their sites on a strong digital expansion, and they need reliable market data to inform their strategies along the way.”Mark D’Andrea, Chief Revenue Officer, SQAD
WRAP UP: MAKING THE MOST OF DIGITAL STREAMING PLATFORMS
Marketers must carefully evaluate the growing popularity of digital streaming across mobile devices, Connected TV, and other digital mediums and how it influences content consumption. They must pinpoint which platforms are being used by their target audience and tailor their marketing efforts accordingly.
“There is no doubt that digital consumption has become a key part of any advertising campaign,” says John Yang, Product Manager of SQAD MediaLogic, which deals primarily with audience viewership data. “Digital usage will likely continue to grow and chip away at traditional sources of media. Looking at the levels of Homes and People Using Television (HUT/PUTs) in the broadcast world, we see a decline each year as audiences shift away from their televisions.”
“Looking at the levels of Homes and People Using Television (HUT/PUTs) in the broadcast world, we see a decline each year as audiences shift away from their televisions.”John Yang, Product Manager of SQAD MediaLogic
Marketers should focus on staying up-to-date on these ad trends as digital video continues to move deeper into the mainstream. You want to ensure brand visibility across OTT platforms and streaming services as well as traditional linear channels. There are lots of great resources to help you stay informed, so consider signing up for newsletters from publishers like Ad Age, Digiday, and MediaPost – providing regular insight and analysis on key trends.
When you’re ready to add market data and cost intelligence to your digital advertising strategy, you can check out SQAD’s MediaCosts: Digital cost research platform. You can learn more about it at www.sqad.com/mediacosts/digital
- ‘Average US Time Spent with Mobile in 2019 Has Increased,’ Insider Intelligence, Amy He, 2019
- ‘CTV and digital advertising: How Connected TV is one of the fastest growing channels in 2021,’ Insider Intelligence, 2021
- ‘How a stay-at-home year accelerated three trends in the advertising industry,’ CNBC, Megan Graham, 2021
- ‘IAB: Digital ad revenues pass $100B on mobile, video growth,’ Marketing Dive, Chris Kelly, 2019
- ‘OTT Streaming on Connected TVs and Boxes/Sticks Increases during Coronavirus Pandemic,’ Comscore, Autum Molay & Ryan Williams, 2020
- ‘Q2 2021 Digital Video Trends,’ eMarketer, Ross Benes, 2021
- ‘US connected TV device rate hits 82%,’ Broadband TV News, Chris Dziadul, 2021
- ‘US consumer sentiment during the coronavirus crisis,’ McKinsey, 2021