Hulu. Netflix. Amazon Prime. Apple TV. Disney+. The list goes on.
This is no longer a "streaming war" -- we’re living in a full-blown attention massacre as more brands than ever fight for that piece of our brain used to unwind after a long day at work.
But if you, the consumer, thought it was hard enough to navigate this ever-growing landscape, pour one out for the advertisers and media partners currently scratching their head over how to draw a definitive roadmap.
Florian Adamski, CEO of OMD Worldwide, said media owners are faced with the challenge of creating a balance to not completely undermine their legacy business while following consumers to new platforms. Meanwhile, he believes agencies should be doubling-down on understanding consumer behavior so they can best advise on how to scale and/or reallocate reach and frequency across linear and streaming. In other words; it’s data or nothing.
The industry expert shared his insights from all angles: consumer, agency, media owner and marketer.
How would you describe the impact that streaming is having on the media landscape from every perspective?
In general, consumers are excited about the opportunities. This is especially true for younger audience segments. That said, an increasing number of people are frustrated by the growing number of subscriptions and services they need to piece together. The risk being they will give up on the search for content if they can’t find what they want to watch within a few minutes.
For less tech savvy segments this "analysis paralysis" can mean a pivot back to linear TV to avoid making a decision. AI-powered recommendation engines, or portals will emerge to bring sanity to the streaming eco-system and help minimise viewer’s confusion.
The financial burden is another challenge. Most people won’t be willing to pay for more than two to three services, especially in addition to their cable/ satellite bundles. This will further drive cord cutting at scale. We will also see a rise in hybrid subscription models with low subscription cost, coupled with advertising. The "content for advertising" value exchange is far from dead.
Churn will be an issue as consumers will subscribe/unsubscribe to services to test new ones and save money. Cost-conscious consumers will also push streaming services to offer tiered service bundles ("pay per episode/show/season"), and cable and satellite operators will increasingly look to bundle these services with linear channel packages.
Generally speaking, the "streaming war" will represent an opportunity to extend the reach of campaigns, by using ad-supported streaming platforms as "reach extenders" to linear activity. This will allow better engagement with harder to reach audiences, such as Gen Z and millennials.
That said, many streaming services do not have advertising opportunities, creating a bottleneck. Those that do, marketers are leaning into to further understand consumer behavior and test new ad formats knowing that 16 to 18 minutes of advertising in linear broadcast and cable is too much. Innovative formats such as CGI product placement, and branded content development will be on the rise.
Will need to create a balance to not completely undermine their legacy business while following consumers to new platforms and figuring out how much of this new audience is additive.
As they create new and shorter ad breaks on their streaming channels, how do they get consumers to ever return to traditional channels? As for the streaming platforms themselves, we expect more key players to adopt advertising as a means of funding quality original content. In terms of ad sales, the industry needs to finally overcome the remaining limitations with addressable TV: fragmentation of inventory and lack of scale.
There is a huge opportunity to create a liquid and scalable marketplace. The go-to market strategy has to fully shift towards impression/audience-based selling. Many long-tail content providers will increasingly be incentivised to sell aggregate audiences across platforms (broadcast, linear, OTT and on-demand).
With traditional TV ratings declining, we need to build a cohesive understanding of consumer behavior and who the streamers are to ensure they are additive to their linear channels so we can control reach/frequency and re-aggregate scale that we are currently losing. This will also help us build look alike models for those streamers who do not have advertising opportunities.
Creating and testing innovative communication formats will be key, but in order to make those scale the complexities of transaction and measurability for addressable TV will need to be eliminated. Agencies and advertisers will need to join forces in clearly conveying the basic need for content owners to better collaborate to simplify the media buy and to agree on more consistent measurement metrics, allowing for audience comparability across linear and digital inventory.
If managed strategically, we will see the transformation of TV into a "Full Funnel" media. A champion not only of long-term, brand-building, delivering high reach at low cost, but a powerful tool in the performance space as well.
Do you think that streaming options will continue to expand at a similar rate in the coming year, or will consumers reach a saturation point?
I believe we will see more streaming options but consumers will probably only stick to a limited number and pushing for bundling options. There will be tremendous churn. Long term this model without advertising is unsustainable.
From an international perspective, US streaming services will continue to expand, driven by the desire to reach viewers globally. Current overseas content distribution rights will limit the impact some US streaming services will have outside of North America for the next two to three years, but they will slowly but surely increase their penetration.