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Streaming services are still fighting to have ultra-light ad loads

But they’re also coming up with sneaky ways to add inventory.
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Francis Scialabba

· 5 min read

The flashiest awards in streaming are the Emmys and the Oscars, but entertainment companies are fighting for another type of bragging rights: the least-disruptive advertising experience in the industry.

“Other platforms offer a formula for frustration,” Peter Blacker, EVP of global ad sales and partnerships at NBCUniversal, said during Peacock’s NewFronts presentation last week, in a dig at competitors. “Below-average content plus above-average glitching [and] sky-high ad loads equals rock-bottom consumer engagement.” The alternative? Peacock is focused on having “one of the lowest [ad] loads in streaming,” Blacker said.

Promising to be light on ads is an increasingly common refrain in media. When HBO Max debuted a year ago, then-ad sales chief JP Colaco promised a “best-in-class” ad load of no more than four minutes per hour, while Discovery+ has championed its own “ad-light” product that has around four minutes per hour. Peacock promised no more than five ads per hour. And the forthcoming ad-supported tier of Disney+, which is expected to debut later this year, will be “very thoughtful and mindful” about the number of ads, Disney CFO Christine McCarthy said earlier this year.

That means that light ad loads are the new normal for ad-supported subscription streaming services, where frustrating viewers with too many ads may translate to subscriber or viewership woes. 

“It’s obviously a balancing act between having ad yield as well as a growing subscriber base,” Kevin Weigand, director of US national video innovation at Dentsu, told Marketing Brew.

Drop it low

Most ad-supported tiers of the major streaming services on the market, including Discovery, HBO Max, Hulu, and Peacock, are sticking to their promises of keeping ads limited, according to 2022 data from MediaRadar shared with Marketing Brew. Seeing between four and seven advertisements aired per show, and between seven and 11 ads aired per hour, is pretty typical for those services, according to an analysis MediaRadar conducted between January and March of this year.

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The only exception: Paramount+, which had the highest ad load among the five streaming services measured, with an average of 18.6 ads aired per show and 26.8 ads per hour.

graph from MediaRadar

MediaRadar

Linear television, meanwhile, averaged just over 13 minutes per hour across daytime viewing in the second quarter of 2021 (or, roughly speaking, about 26 30-second ads), according to data from research firm MoffettNathanson.

Keeping ad loads low is partially a byproduct of the streaming environment, where consumers have been primed to watch shows on services like Netflix and Amazon Prime Video ad-free. Simply put, cramming in ads risks alienating users. Forty-four percent of US adults already said that there are too many ads on streaming services, according to a 2021 poll conducted by Morning Consult.

Making moolah

For streamers, limited ad inventory hasn’t yet posed an immediate problem. David Zaslav, the chief executive officer of Warner Bros. Discovery, has told investors that Discovery+, which has around four minutes of advertising per hour, generates more revenue per user than the service’s ad-free tier.

Low ad loads are just one of many considerations that media buyers may evaluate when making investment decisions, Weigand said, especially when fewer ads may translate to a better consumer experience. But lighter ad loads can also pose challenges, especially when it comes to managing ad frequency.

“Obviously, a decreased ad load inherently decreases the opportunity to reach your end consumer,” Weigand said. “That’s definitely something you need to weigh against the total scale of the product, and specifically the ad-supported product.”

To compensate, streaming services are coming up with more ways to monetize their platforms without directly interrupting shows. Take Amazon, which took the wraps off its virtual product-placement tool that inserts products directly into shows, or Peacock, which debuted similar in-scene ad placement, as well as a “frame ad” that surrounds still-playing programming with a brand message.

Add those to other non-interruptive ad formats like pause ads, which appear when viewers pause their programming, or binge ads, when a sponsor offers up ad-free viewing after that viewer has binge-watched multiple episodes at a time, and it’s easy to see just how long the list of ways to monetize viewers without interrupting their viewing has become.

Expect that to continue, especially as advertisers continue to turn their attention toward streaming as a place to spend their marketing budgets.

“A lot of the dust still has to settle, but I think with some of the larger media group’s streaming platforms developing, we’ll see different ad loads against different types of inventory, and their ad suites mature,” Weigand said.

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