With the popularity of Connected TV and Over-The-Top (OTT) services at an all-time high, new research by global technology company Criteo reveals 56% of Aussies are happy to watch ads on video streaming services if it means they save money.
A quarter of Australians (24%) said they are open to watching ads if they didn’t have to pay the subscription fee for video streaming services.
This statistic increases among older generations, Gen X (28%) and baby boomers (37%), it is a “no-go” for younger generations, with only one-in-five millennials (20%) and only 14% of Gen Z willing to watch ad-supported video streaming services.
The research also cited that “one-in-five Australians (20%) are willing to share their data with advertisers to receive more relevant and personalised video ads,” with the Australia’s top five favourite streaming services in Australia being Netflix (74%), YouTube (53%), 7Plus (44%), ABC iView (36%) and Disney+ (33%).
Colin Barnard, managing director, Criteo ANZ, said: “Given millennials grew up during a time of technological disruption and Gen Z have never lived in a non-digital world, it’s no surprise younger generations are more desensitised to advertising than older generations.”
Criteo’s study also found a third of Australians (33%) said its important video ads show them products and services they’re interested in, which increases to 42% among Gen Z.
One-in-five Australians (22%) said they’d be willing to pay a basic video streaming subscription to watch content with ads alongside an option to buy or rent premium content without ads.
According to PwC’s latest Australian Entertainment and Media Outlook, growth in ad spend across Broadcast Video on Demand (BVOD) went some way to offsetting the 9.8% decline of the Free-To-Air advertising market in 2020. Broadcast Video On Demand (BVOD) experienced a 38.8% growth in revenue in Australia, hitting $229 million.
BVOD, as well as subscription video services, grew audience, subscribers and revenue (either from advertising or subscriptions) in the the past year. Average total monthly hours consumed on BVOD increased 39.9% year-on-year for the period July to December 2020.
Barnard said marketers can use video to drive business results on streaming platforms: “Marketers must create a commerce media strategy, build their audience first, be channel, device and format agnostic, scale video creative and measure online video campaigns holistically. Video ads predominately drive awareness, so it’s important to combine clips of your video with display ad elements to drive lower-funnel objectives like consideration, conversion, and repeat purchases.”
Streaming platform Netflix revealed in a recent subscriber and financial update it added 10.1 million subscribers globally in the second quarter of 2020. Looking ahead to the next quarter, Netflix predicted it will add 3.5 million subscribers through to September.
The APAC region represented about two-thirds of Netflix’s global paid net additions in the quarter. In a letter to shareholders, the platform said it is “incredibly proud of our growing slates of local-language films and series in Asia Pacific”.
The APAC region has 27.88 million subscribers as of Q2 and brought in revenue of US$799 million in the quarter. This represents a 9% growth year-on-year for the quarter.
Barnard said the future of video streaming services and video advertising, and whether we can expect the likes of Netflix to go down the advertising path is not looking hopeful.
“Despite ongoing speculation and investor pressure, the likes of Netflix still say no to adopting an ad-based business model, however I don’t see why we can’t have a combination of free, lower-price and full-price models with the level of advertising determined by the price you pay. We just have to look at the success of Spotify and YouTube who offer both free and paid services, so why wouldn’t this extend to SVOD providers.”