We all understand that the genesis of streaming services has significantly changed consumer behavior; the way people watch video content is much different now than it was even a decade ago. But what is the precise nature of these changes?
How Do People Stream Their Video Content?
A recent report from eMarketer provides a compelling premise. According to the article, mobile ad spending continues to rise, but the majority of video content is streamed on TV sets. Specifically, the article states that long-form content, like movies and TV shows, is more frequently viewed on TVs, not on mobile devices.
The article shares a number of statistics that seem to posit TV as the streaming winner, besting mobile device use. For example, there’s a recent study that finds about two thirds of all respondents saying they prefer streaming content on their TV rather than their tablet or phone. A separate study reports that only about a quarter of all video streaming is done on mobile devices.
Beware of Faulty Conclusions
At a glance this report would seem to suggest that advertisers are better off dialing back on their mobile ad spending, and instead putting more of their ad dollars into connected TV. But this is a classic example of why it’s so important to read the fine print; we’d encourage advertisers to view articles like this one very carefully, lest they arrive at some fraudulent conclusions.
The eMarketer article, in particular, makes one major error: In its discussion of streaming video content, it nonchalantly excludes YouTube from the conversation. Remember, in last month’s blog post, we showed that 84.2 percent of all U.S. video viewers watch content on YouTube and 70 percent of those watching YouTube were on a mobile device! It stands to reason that when you take YouTube out of the equation, watching streaming videos on TV is going to dominate.
Another important caveat to this data is that it does not break out viewing that has ads vs. does not have ads. Again, it’s important to read the fine print. If you look closely at the data, you’ll notice that it mostly accounts for streaming services like Netflix, Disney, HBO, etc., where ads are non-existent. This information may be interesting, but it really doesn’t offer much value to marketers who are looking for a place to spend their ad dollars!
Drawing the Right Conclusions About Streaming Video
There may be some sense in which it’s reasonable to say that TV dominates mobile devices within the streaming ecosystem, but that’s not necessarily a meaningful conclusion for advertisers. When you look at the full picture of where people watch mobile video (YouTube!) and where advertisers can spend their money (YouTube!), you arrive at a very different conclusion than the one the eMarketer piece espouses.
That’s why we are currently convinced mobile video ads are going to deliver our advertiser’s message to a much more engaged audience. As such, the enCOMPASS team is limiting our ad spend on OTT (TV) platforms, and instead focusing in on where we’ve been able to provide strong results on behalf of our clients.
It’s also worth noting that Internet users can watch streaming TV using the YouTube TV app on a TV… so, spending ad dollars on YouTube may be a good way to reach users who watch on their mobile devices and on their TV sets.
Change is Coming
We expect that as streaming services grow there will be more opportunities for advertisers. Will Netflix eventually have paid ads? Will Hulu’s ads become easier for SMBs to buy? Will other Streaming TV services also soon look to monetize? Will Amazon do something similar and look to improve advertising for their users?
We don’t know exactly what changes the streaming economy will bring, but we do know that change is coming… and when it gets here, we’ll be ready. The enCOMPASS team is committed to monitoring streaming video and advertising trends so that we can keep our clients in the loop and guide them in making informed decisions about how to reach their target audiences.
If you have any questions about the current streaming landscape, or how you might best spend your streaming ad budget, we welcome you to contact us.
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