• world's
  • most
  • advanced
  • streaming
  • paas
Please, Wait
29th March 2023
Why Brands are Shifting their Ad Spends to Streaming
By Anas Abbasi
Broadcasting technology is outdated, and cannot meet the demands of modern audiences cutting the cord and brands diverting ad spends from traditional TV.

Brands have shifted a growing share of their advertising to digital in the last ten years.

In 2019, digital ad spends surpassed traditional media ad spends, according to an eMarketer report.

And this gap is continuing to widen.

Digital ad spends are expected to reach 67.2% of total global ad expenditure, while traditional ad spends are expected to drop to 32.8% by 2025.

The last few years have seen a similar exciting trend — the tectonic shift of ad spends towards streaming services (and away from traditional TV).

Connected TV ad spends in the US grew by 27% in 2020 while traditional TV declined by 17%, according to the Interactive Advertising Bureau.

COVID-19 accelerated this shift but the trend has become permanent.

Connected TV ad spends increased by 31% in 2021 and 27% in 2022. While that of traditional TV declined by 7% in 2021 and 8% in 2022.

That's huge!

Why the shift, though?

There are many reasons for this dramatic shift, but two stand out.

Changing Viewer Habits

There's an exponential increase in the adoption of streaming services by viewers who are rapidly moving away from traditional TV and towards on-demand, personalised content.

Between 2016 and 2021, traditional TV lost more than 50 million viewers, according to a report by eMarketer.

Traditional TV viewership peaked in 2013, and since then, consumers have flocked to connected TVs and streaming services.

As a result, brands are finding it increasingly difficult to reach their target audiences through traditional TV advertising. This is because viewers are skipping ads, using DVRs to fast-forward through commercials, or simply not watching live TV at all.

In contrast, streaming services provide brands with a much more targeted and engaged audience since they have access to detailed data on viewer demographics, viewing habits, and preferences. This allows brands to take data-led decisions such as targeting their ads to specific audiences or personalising their messaging based on viewer preferences etc.

Greater Cost Effectiveness

Brands can achieve a far superior ROI with ad spends on streaming services, simply because of the targeting & measurement capabilities and engaging ad formats available on them.

Thus brands can track, analyse, edit or pause their campaigns in real-time, which allows them to make data-led decisions and optimise their campaigns for better ROI.

A study by Roku and Magna Global found that ads on streaming services had a 67% higher ad recall than traditional TV ads.

Additionally, the study found that streaming services had a 42% lower cost per thousand impressions (CPM) than traditional TV.

This level of precision and accountability is not possible with traditional TV advertising, which often relies on estimates and projections rather than actual data.

Of course, that's not to say that traditional TV advertising is dead. Far from it, in fact. Ad spends on traditional TV are still huge numbers. But they're going south. And fast.

What does this mean for media companies?

Broadcasting technology is outdated, and cannot meet the demands of modern audiences cutting the cord and brands diverting ad spends from traditional TV.

Streaming services on the other hand need to get their tech act in order to take advantage of this shift.

That is why we exist.

Media companies have to worry only and only about creating content and delighting audiences. And we take care of everything else.

From state-of-the-art technology infrastructure to seamless content delivery, from painless licensing management to always available technical support, from ever-expanding distribution (30+ apps and 180 countries) to effortless tax management — we literally take care of everything.

And, that too in a matter of weeks.

Check out how we delivered a streaming service to India's largest media conglomerate The Times Network within two week!

Keep Reading
The Streaming Media Business Funnel is now clear