As technology evolves and content becomes easier to consume, the industry has seen audience habits shift away from traditional media channels such as TV and radio and toward more on-demand media platforms. One of the most dynamic and evolving of these new mediums is streaming. Streaming has changed how audiences consume longer-form content with the ability to pick and choose what to watch and when to watch it. Though Netflix has dominated the streaming space, they don’t call it “the streaming wars” for nothing. In this month’s blog, we’re diving into the latest move by WarnerMedia and HBO that is shaking up the streaming space, connected TV advertising, and what this means for the future of this evolving advertising channel.

HBO Max with Ads

Over the past few years, we have seen many streaming services emerge to seek a piece of the pie. Whether it be short-lived services like Quibi or established media players like Disney, consumers’ choices have never been more plentiful. Despite the range of streaming services, paying for each individual subscription has viewers needing to calculate what services offer the most value. While there still remain some services like Netflix and Disney+ that have remained ad-free, others platforms like Hulu and Paramount Plus are testing more discounted tiers that are offset by an ad-supported model.

This week, WarnerMedia launched HBO’s newest offering to the streaming space. Though historically known for its ad-free content, HBO has recently introduced a new offering that brings its content at a more affordable price. Properly named “HBO Max with Ads,” this new streaming plan allows consumers the ability to watch HBO’s library at a reduced price of $9.99 per month. In exchange for this reduced price, subscribers will be presented with limited advertising on the platform.

Compared to its other ad-supported competitors, HBO Max with Ads touts the lightest ad load in the market averaging less than 4 minutes per hour. While this is an exciting and new offering for consumers, historically ad-free platforms like HBO venturing into ad-supported streaming is a promising move for advertisers looking to break into the connected TV space and reach audiences initially thought to be unreachable.

Connected TV (CTV) – What is it?

For those unaware, Connected TV (also known as a smart TV) is any device that supports video-content streaming. Common CTVs include Amazon Fire TV, Apple TV, and gaming consoles such as the PlayStation and Xbox. These devices are able to stream Over the Top (OTT) content, media content that is provided over the internet. Netflix, HBO Max, and Hulu are some of the biggest examples of the recent expansion of OTT content.

While traditional advertising channels like TV and radio sell their ad space in segmented ad spots, CTV advertising works similarly to digital advertising where placements are dynamic and vary based on your desired audience and campaign.

CTV is a notable advertising platform as it has hybrid benefits similar to both TV and digital. Like digital advertising, CTV is able to reach more targeted audiences. Additionally, like TV advertising, CTV ads capture audiences in more engaging spaces as viewers are consuming longer-form media as opposed to shorter digital content. In short, using CTV in one’s media mix allows brands a better opportunity to position themselves in front of more targeted and engaged audiences.

In addition to those CTV factors, other benefits include:

  • Budget-friendly flexibility
  • Wider variety of ad formats
  • Premium inventory and publishers
  • Faster real-time metrics

According to Todd Spangler’s Variety article, WarnerMedia said that subscribers to HBO’s new tier “can expect to see greater personalization in the ads they do see,” and that the “Ads on HBO Max are designed to complement and enhance the overall viewing experience and will be thoughtfully surfaced across HBO Max’s content catalog in a way that maintains the integrity of the programming.”

From a big-picture standpoint, not only does this move make HBO the newest space for businesses to advertise on, but it is also a key indicator in a shift in the streaming landscape. This is extremely notable as Apple’s privacy changes have made ad targeting across the digital landscape harder to accomplish. As we see how consumers react to this new service offering, now more than ever is an exciting time for advertisers to explore the benefits of CTV as an addition to their media mix.

If you are curious about how your business can benefit from adding CTV to your media mix, contact the River Direct team today to learn more! For additional insights on the latest moves and events shaking the advertising industry, be sure to subscribe to our newsletter and follow us on Facebook, LinkedIn, and Instagram.

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