A Deep Dive Into Streaming Advertising: Types, Advantages, Challenges, and Best Practices

Programmatic advertising is on the rise, and there’s nothing to be surprised with. 2023’s global programmatic advertising spending reached nearly $558 billion and is expected to surge to the mouthwatering $700 billion in 2026. As businesses are looking to reinvent their customer engagement and retention strategies, thus following the footsteps of where their clients go, programmatic advertising companies automate the process of finding those places and reaching the audience with maximum-efficiency ads.

Nonetheless, ensuring the aforementioned efficiency is not as easy as it might sound. Therefore, the folks on both the demand and supply sides have never shied away from experimenting with mediums, formats, and platforms as the advertising business kept on evolving at an immense pace. With the rapid rise of streaming services, streaming advertising has emerged as a pivotal element of modern marketing strategies.

Nowadays, the numbers behind the streaming services market are simply astounding. Fortune Business Insights claims that the video streaming marketing is currently valued at nearly $670 billion. Furthermore, it is expected to continue growing to approximately $2.49 trillion by 2032, which is a CAGR of 17.8%.

Today, we are talking about streaming advertising, its best practices, advantages, and pitfalls, in order to let you in on the very workings behind reaching probably the most extensive and at the same time precise target audience in the history of advertising.

Understanding Streaming Advertising

Streaming advertising refers to the delivery of advertisements via streaming media platforms or connected TV (CTV) services. There is a variety of examples to choose from, including popular platforms like YouTube, Spotify, and emerging ad-supported tiers of major services like Netflix and Disney Plus. If someone’s still doubting the commercial power of streaming services and advertising on them, let’s put the stats mentioned above (about $2.49 trillion by 2032) into more applicable terms.

Just imagine, as per Forbes, in the United States, 99% of families have at least one streaming service subscription. Thus, it opens a whole new world of opportunities for advertisers. Unlike traditional media, streaming advertising targets users who are actively engaged in watching or listening to content, often creating a more immersive advertising experience.

So, with all the honors paid to the relevance of streaming services with today’s AdTech framework, let’s get into the types of streaming ads there are to choose from.

Key Types of Streaming Ads

There are six of them and it is up to you to decide which one will work best for achieving your business goals.

• Pre-Roll Ads: These short ads play before the main content begins. They can be skippable or unskippable, offering a brief window to capture viewers' attention before their content starts.
• Mid-Roll Ads: Positioned in the middle of the content, these ads are ideal for longer videos or audio segments. They often serve to break up content and can also be skippable or unskippable.
• Post-Roll Ads: These appear after the main content has finished. While they often see lower engagement rates, they still provide a chance to reach viewers who are completing their content experience.
• Bumper Ads: These are brief, non-skippable ads designed to deliver a quick, impactful message before, during, or after content. Overlay Ads: Displayed as banners during the streaming content, these ads do not interrupt the viewing experience but still offer a promotional message.
• Sponsored Content: This involves businesses paying to have their content featured or integrated within the streaming platform, providing a more seamless form of advertising.

Yet, besides the semantic break-down of streaming ads, there is also a technical difference between the very types of streaming services. Let’s have a closer look at them now.

OTT vs. CTV

Over-The-Top (OTT) and Connected TV (CTV) are terms often used interchangeably but have distinct differences: OTT refers to streaming services delivered directly over the internet, bypassing traditional cable or satellite methods. Examples include Paramount+ and Pluto TV. CTV describes streaming services accessed through a connected device, such as a smart TV or streaming box. These services often require a stable internet connection and include platforms like Roku and Amazon Fire TV.

AVOD vs. SVOD

Ad-Supported Video On Demand (AVOD) platforms, such as YouTube and Tubi, offer free access to content but include advertisements. In contrast, Subscription Video On Demand (SVOD) platforms, like Netflix and Hulu, require a subscription fee and do not display ads. Both models have their merits, depending on the advertising strategy and target audience.

Advantages of Streaming Advertising

When configured in the right manner, streaming ads are nothing else but a deadly weapon in the hands of a marketer. In particular, you can tap into these five advantages.

1. Targeted Reach

   Streaming platforms offer sophisticated targeting options that allow advertisers to reach specific demographics, including factors like age, gender, location, and viewing habits. This precision helps businesses connect with their ideal audience more effectively than traditional media.

2. Cost-Effectiveness

   Compared to traditional advertising methods such as television and print ads, streaming advertising often presents a more budget-friendly option. This is particularly advantageous for small businesses with limited marketing resources.

3. Real-Time Metrics

   One of the significant benefits of streaming advertising is the ability to track and measure ad performance in near real-time. Advertisers can monitor various metrics such as view counts, engagement rates, and conversions, allowing for immediate adjustments to optimize campaign performance.

4. Enhanced Engagement

   Interactive and dynamic ad formats on streaming platforms can increase viewer engagement. Features such as clickable elements and interactive storytelling can lead to higher conversion rates and improved brand recall.

5. Increased Brand Awareness

   With streaming platforms' vast audiences, advertisers can significantly boost brand visibility and awareness. This is especially useful for broadening market reach and establishing a presence in new demographics.

So how do you make sure you make the most of streaming advertising getting all the benefits possible for your business?

Best Practices for Streaming Advertising

Sure enough, your streamline advertising strategy should first be formed and shaped by your business objectives. Nonetheless, you might find some general recommendations useful when starting a brand-new or refining existing streaming advertising journey.

1. Choose the Right Platform

   Select a streaming platform that aligns with your target audience and the type of content they engage with. Consider factors like platform demographics, content relevancy, and ad format types.

2. Create Compelling Ads

   Develop ads that are relevant, engaging, and aligned with the content being consumed. High-quality visuals, strong calls-to-action, and interactive elements can enhance viewer engagement and effectiveness.

3. Utilize Advanced

   Targeting Leverage streaming platforms' targeting capabilities to reach specific audience segments based on demographics, interests, and behavior. This ensures that your ads are shown to those most likely to convert.

4. Monitor and Optimize

   Track ad performance through real-time analytics and make data-driven adjustments to optimize campaigns. Test various ad formats and targeting options to identify what works best for your business.

5. Adapt to Viewer

   Behavior Streaming viewers are often more engaged than traditional TV audiences, but they also expect ads that complement their viewing experience. Tailor your ads to be entertaining and visually appealing to minimize disruption and enhance engagement.

Even though some of the aforementioned tips are quite obvious, many streaming advertising campaigns fail due to overcomplication, while simple yet efficient methods are overlooked.

Challenges and Future Trends

Of course, streaming advertising has challenges – everything could not have been that perfect. Nonetheless, it should be acknowledged right from the onset: the challenges are way more minor than the benefits that streaming advertising offers.

The main challenge with streaming advertising is that it can start getting on the viewer’s nerves. If there are too many ads during, let’s say, one episode of a show, the viewer can consider changing the streaming platform, which might be quite dramatic in terms of the platform’s, and thus yours, well-being. 70% of internet users consider digital ads annoying, and while they can skip most of them, streaming ads can get explicitly annoying – especially the ones they cannot skip.

Hence, the future trends of streaming advertising stem from the advertiser’s ability to flee from the negative consequences of over-advertising. The number one trend is ensuring the viewer’s peace of mind so he or she won’t develop a negative connotation of your brand. That is, balancing ad content with viewer experience would be more than crucial. Additionally, the rise of advanced analytics and attribution tools will further enable advertisers to refine their strategies and maximize ROI.

Let’s Sum It Up

Streaming advertising has transformed how businesses engage with their audiences, providing targeted, efficient, and compelling advertising solutions. By mastering the essentials of streaming ads, applying best practices, and using sophisticated measurement tools, businesses can maximize the effectiveness of streaming platforms to elevate brand visibility and meet marketing objectives. Adopting these strategies ensures impactful and efficient streaming advertising campaigns, helping position your brand for success in a digital-first landscape. Interested in optimizing your streaming advertising efforts? I am here to help with a complimentary consultation. Please don't hesitate to contact me for any queries or further information.