Findings
Preference for Ads Over Extra Costs:
66% of U.S. TV viewers prefer watching ads to save $4-$5 per month (June 2024), up from 61% in 2023.
Consumers are increasingly comfortable with ad-supported streaming options, with disapproval of ads falling from 36% (2022) to 13% (2023).
Ad-Supported Video Usage Rising:
By 2025, 74.8% of U.S. over-the-top (OTT) video users will watch ad-supported video-on-demand (AVOD), a sharp increase from 47.3% in 2020.
Platforms like Netflix, Hulu, and Amazon Prime Video have embraced ad-supported tiers, making them the new norm.
Decline of Ad-Free Services:
Ad-free TV services saw a drop in usage from 84% in June 2023 to 58% in June 2024, largely driven by Amazon Prime Video’s shift to default ad-supported tiers.
Key Takeaway
Consumers are embracing ads as a trade-off for lower subscription costs, shifting the streaming landscape toward ad-supported models and providing an opportunity for advertisers to meet cost-conscious viewers with relevant messaging.
Trends
Consumer Trend:
Cost-conscious behavior drives acceptance of ad-supported content.
Sub-Trend:
AVOD and free ad-supported TV (FAST) services gain popularity.
Big Social Trend:
Financial pragmatism influences media consumption habits.
Global Trend:
Streaming platforms worldwide adopt ad-supported tiers as a default or primary option.
Implications for Marketers
Meet Consumers on AVOD/FAST Platforms:
Advertise on platforms with growing AVOD viewership, leveraging their increasing adoption.
Emphasize Deals and Discounts:
Focus messaging on cost-saving benefits, resonating with price-sensitive consumers.
Targeting Opportunities:
Collaborate with streaming platforms to improve ad targeting, ensuring offers reach the right audience.
Implications for Brands
Content Sponsorship:
Partner with platforms to sponsor content or offer branded entertainment tailored to the audience.
Engage with Cost-Conscious Consumers:
Highlight savings through exclusive promotions or discounts tied to AVOD platforms.
Implications for Consumers
Benefit from Free or Low-Cost Entertainment:
Consumers save money while maintaining access to quality content.
Increased Exposure to Relevant Ads:
Improved ad targeting ensures consumers see deals and offers aligned with their interests.
Implications for Society
Normalization of Ad-Supported Content:
The widespread adoption of ads reshapes consumer expectations about "free" and "premium" services.
Cost-Saving Trends Across Industries:
Media consumption mirrors broader financial mindfulness, influencing other sectors to adopt similar models.
What Companies Should Do in 2025
Adopt an AVOD-First Strategy:
Tailor content and monetization strategies around ad-supported models.
Refine Targeting Capabilities:
Invest in data analytics to optimize ad placement for maximum relevance.
Leverage Cross-Promotion:
Use AVOD platforms as a channel for exclusive promotions to drive consumer engagement.
Strategy Recommendations for Marketers
Double Down on AVOD Advertising:
Prioritize budget allocation to AVOD platforms with the largest growth and audience.
Deliver Value-Driven Ads:
Ensure ads emphasize discounts, free trials, or limited-time deals that align with cost-conscious behavior.
Innovate with Engagement:
Explore interactive ad formats that encourage direct consumer action, such as in-app purchases or coupon downloads.
Final Sentence: Main Trend
The shift to ad-supported streaming highlights a consumer preference for cost savings, offering marketers an opportunity to deliver value-driven messaging in a growing AVOD ecosystem.
What Marketers Should Do in 2025
Focus on delivering value:
How: Develop data-driven ad campaigns that prioritize consumer savings and exclusive offers on AVOD platforms.
Outcome: Build trust, engagement, and loyalty with cost-conscious audiences.
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