The recent slew of mergers and acquisitions in the entertainment world have made plenty of headlines in 2019.
Most are focused on how the content lineup will change, what these freshly ramped up media companies can offer consumers, and which player is likely to take the biggest piece of the pie.
But the real driving force behind the streaming wars is the ability for media and tech companies to reach audiences. It’s proving to be a winning combination. Tech companies are entering the media world (here’s to you, Amazon) and media companies are entering the tech — or, at least, streaming — world (we see you, NBCU).
With advertising as the driving force, the streaming wars have had another welcome effect for both ad sales and creatives: changing up the way advertisers can reach their audience.
Two recent developments have drawn our attention to the new ad formats that are promising to change up both streaming and traditional TV advertising.
For Hulu, it means offering ways to appeal to viewers finally catching up on the second season of The Handmaid’s Tale on a Sunday morning. In the case of NBCU, it’s a mashup of Out-of-Home and digital advertising strategies — and we’re here for it.
After NewFronts, Hulu to Embrace the Binge
As a streaming native, Hulu has much less disruptive advertising than its traditional broadcasting counterparts. But as the Disney-controlled streaming giant tops 28 million US subscribers, it intends to cut down advertising load even further.
According to a report from AdAge, Hulu has plans for 50 percent of its ad revenue to come from non-intrusive formats by 2021.
To kick off these efforts, Hulu announced a brand new binge-watch ad format at this year’s NewFronts. ““We’re trying to recognize that the viewer experience in on-demand viewing is different from traditional TV, and we should and must evolve the ad experience,” Peter Naylor, Hulu’s SVP of Ad Sales Peter, told AdWeek in an interview.
Advertisers can take two approaches with this offering. They can either offer a longer ad to watch the third or fourth episode in a binge completely ad free. Or they can hit a binging viewer with a relevant creative — like offering food delivery.
The streaming service dubbed this new ad format ‘television’s first binge advertising experience.’
NBCU Bridges Traditional TV With Digital Advertising
As it keeps focused on digital streaming and advertising, NBCU has announced its intention to cut down its ad load by 20 percent by the end of 2019. Part of the plan was to include prime pod ads (60 second spots in the first or last break of each program) and more targeted ads in its offerings.
More recently, NBCU introduced a Shoppable TV ad unit. The ad format “shows a QR code that viewers can scan with their mobile cameras,” writes Andrew Blustein at The Drum. “Viewers can then interact with and potentially buy from a given advertiser on their phones.”
The QR codes will remain on screen for 30 seconds, meaning the shoppable ads will most likely be combined with NBCU’s previously announced prime pod ad formats.
NBCU’s head of marketing Josh Feldman made the broadcaster’s intention clear in a press statement: “By pairing brands with our premium content, storming the purchase funnel, and removing the barriers consumers traditionally encounter between seeing a product and making a purchase, we’re giving marketers a direct sales channel to millions of viewers across the country.”
For those dubious of the clunky foray into digital, Feldman had an answer: the first test of the shoppable format resulted in 50,000 QR scans in five minutes.
The Upshot: TV Advertising is Evolving, Not Dying
Hulu’s NewFronts announcement is a streaming native expanding its offerings for media buyers, while the NBCU ad format is a traditional broadcaster getting up to speed with digital. Both show how TV advertising is evolving in the midst of the streaming wars.
A report from CMO late last year found that “marketers still rank TV higher than most digital formats — including audio, display, native, out-of-home, search, and social — in the ability to build an emotional connection with a brand.”
The NBCU experiment shows that ad tech is not a matter of digital advertising replacing TV ads — it’s a matter of TV advertising starting to incorporate digital formats and data. “Innovations are making TV advertising more compelling,” the CMO article concludes.
At the same time, the new binge-worthy ad format from Hulu shows that online advertising — even in over-the-top television — will only continue to get more targeted for customers and customizable for media buyers.
Now it’s just a matter of bringing the two together. Just 28 percent of brands have integrated digital data into their TV ads. Incorporating digital into TV advertising, like NBCU has done with its QR code, is a start. But TV advertisers will increasingly want ways to target more effectively while taking advantage of the emotional connection TV advertising offers. And media companies will have to be ready.