Ad-based Video On Demand (AVOD) is rapidly gaining popularity around the world. Nearly two-thirds of consumers will use at least one AVOD service monthly and spend nearly US$9.5 billion on paid subscription services in 2023, Yahoo and Publicis Media revealed in their latest “CTV Ad Attention & Receptiveness” report.
With these viewers in their sights, all the major streaming platforms are joining the market with an expanding mix of offerings for consumers to enjoy and advertisers to leverage. Studies predict that, by the end of 2023, all major subscription video-on-demand (SVOD) services will have launched an ad-funded tier to complement ad-free options. By the end of 2024, half of these providers will also have launched a free ad-supported streaming TV (FAST) service, and by 2030, most online video service subscriptions will be partially or wholly ad-funded.
Advertisers are noticing and flocking to the new channels. CTV ad spending as a whole is expected to exceed US$26 billion in 2023. However, even as ad spending grows, buyers are struggling with how best to leverage this rapidly evolving medium. “To stand out, advertisers must understand the key variables that impact consumer attention and receptiveness to ads on CTV,” the report says.
Overall, the study found that consumers recognize the role of advertising in reducing the cost of their access to AVOD channels and generally welcome ads in CTV environments. In fact, 46% of respondents said they would rather pay less and receive some ads when adding a new streaming service. Additionally, 82% of CTV viewers expect ads on free streaming services, and 7 out of 10 AVOD users report being at least somewhat satisfied with their CTV ad experience. Moreover, a majority of respondents found ads to be helpful, with 56% agreeing that ads and commercials provide them with useful information.
At the same time, the study notes that CTV is a multimedia experience, as it encompasses both sight and sound: 53% of consumers reported frequently having CTV on in the background while they do other things, noting that they still heard the audio even if their eyes were not on the screen. This helps explain why the study showed only a third of CTV ads receive two or more seconds of active consumer attention (aka eyes-on-the-screen).
Yahoo and Publicis Media remarked that CTV consumption is not the same as linear TV consumption. Previous studies have found that half of the time spent consuming linear TV happens between 6-10pm. Yahoo and Publicis Media found that, while CTV ad attention is highest during prime time, peaks of attention occur during the early and late morning periods, making these potential opportunities for advertisers to focus on since they are typically cheaper.
At the same time, ad attention is higher for more "intentional" paid subscription services. Viewers tend to pay more attention to ads on applications that are paid or subscription-based - particularly vMVPDs like YouTube, FuboTV, and Sling, as well as hybrid services like Hulu, HBO Max, and Paramount+ - where there is more intent behind programming choice.
● HOW TO GET THE ATTENTION
Demographics play an important role in CTV tuning and attention, as certain age groups are more likely to engage with specific applications. Understanding where these age groups spend their time and how they engage is crucial for advertisers for targeting a specific group. Yahoo and Publicis Media’s study found that younger viewers (under 40) are almost 60% more likely to spend time with hybrid applications than their older counterparts (40+).
In addition, attention varies by pod position. If an ad airs in the first in-pod position, it captures at least 2 seconds of attention 38% of the time and viewers pay an average of 11 seconds of attention. Meanwhile, pods of <90 seconds up to 1-5 minutes enjoy relatively steady attention – between 38% and 36%, respectively. Only when pods exceed 5 minutes there is a significant dropoff in attention to 27%.
The study found that genres with higher engagement during viewing also had a higher share of ad attention. Crime dramas had the highest attention percentage at 46%, followed by political commentary/coverage at 39%, and game show competition at 38%. On the other hand, awards programming had the lowest attention percentage at 14%, followed by sci-fi at 16%, and action/adventure at 20%.
Contextually relevant ads have been found to capture greater attention than the average ad in the respective genre, making it an important way to engage the consumer further. For instance, 64% of CTV viewers agree that ad experiences are better or ideal when ads feature people or elements from the program they are watching. Additionally, viewers pay 77% more attention to food and beverage ads aired during cooking shows compared to the average ad.
The report also notes that repetition can be a major annoyance and negatively impact brand sentiment. Over two-thirds (67%) of viewers are annoyed by seeing the same ad more than once within the same ad pod. Ultimately, Yahoo and Publicis Media found that attention drops when viewers are exposed to the same ad within two minutes, and attention remains lowered for ads aired less than 5 minutes apart. The research revealed consumers have an “attention sweet spot” of 6-10 exposures along with the optimal timing gap to avoid brand burnout of 12-24 hours between exposures.