Analysis: Consumers Are Shifting Toward Ad-Based Streaming As They Reevaluate The Cost of Ad-Free

Ad-Supported Tiers, Streaming Bundles and Innovative Ad Formats Examined In New VAB Report on Connected TV Consumer Behaviors— 

The Video Advertising Bureau (VAB) released its latest report, Staying Current on Streaming: The Latest on Connected TV Consumer Behaviors. An analysis of how ad-supported tiers, free ad-supported streaming television (FAST) channels, streaming bundles and innovative ad formats are reshaping Connected TV (CTV) consumer behavior across audiences, the report delivers timely insights for marketers and media platforms.

“As audiences re-evaluate the cost of ad-free subscription streaming, consumers of all income levels and age brackets are finding value in ad-supported tiers and services,” said Jason Wiese, Executive Vice President, Strategic Insights & Measurement, VAB. “Viewers are balancing their spending in streaming by shifting towards advertising-based streaming services, watching more content through FAST channels and unlocking greater cost efficiencies through streaming bundles.”

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The report outlines and elaborates on the following consumer behaviors:

• A shift towards ad-based services is occurring as consumers re-evaluate the cost of ad-free streaming. Twenty-six percent of consumers have added a free streaming service in the past 12 months, while 24% plan to add a free streaming service over the next 12 months (Source: LG Ad Solutions data). Further, 62% of CTV viewers say that recurring streaming subscription costs concern them (Source: VAB analysis of LG Ad Solutions data), as the total monthly cost of the cheapest ad-free plan across seven major streaming services has increased more than 50% over the last five years (Source: VAB analysis of EMARKETER data).
  
  
• Consumers of all income levels and age brackets are gravitating towards ad-supported streaming. Two-thirds of adults prefer ad-supported streaming services and tiers over ad-free subscription services (Source: VAB analysis of MRI-Simmons data).
  
  
• FAST continues to grow as viewers tune into content they crave. FAST is used by one-third of the U.S. population, highlighting an opportunity to reach over 100 million viewers (Source: EMARKETER).
  
  
• Consumers are turning to streaming bundles to access more content while keeping costs down. Adoption of bundled streaming services is growing, with nearly half of households subscribing, or planning to subscribe, soon (Source: CTAM).
  
  
• CTV can engage viewers with tailored, less disruptive ads, helping marketers connect in more meaningful, results-driven ways. Consumers spend an average of an additional 71 seconds engaging with interactive CTV ads vs. standard pre-roll (Source: Innovid).

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“Marketers can leverage tailored, interactive ads on CTV to drive increased engagement and time spent with advertising which leads to greater outcomes for brands,” added Wiese.