What a difference two years make. 

In January 2020, during Netflix’s full-year 2019 earning call, CEO Reed Hastings said the following about advertising: “We want to be the safe respite where you can explore, you can get stimulated, have fun and enjoy – and have none of the controversy around exploiting users with advertising”.

In late 2022, Netflix rolled out a lower-priced offering with advertising followed by Disney. Now, they join the Free Ad-Supported Streaming TV services (FAST – Pluto TV, The Roku Channel, Tubi, Amazon’s Freevee, and the free version of Peacock), and the lower-cost Subscription Video On Demand (SVOD) streaming service with ads including Hulu, Discovery+, Paramount+, Peacock and HBO Max offering marketers advertising opportunities on streaming TV.

A recent survey of consumers conducted by Hub Entertainment research shows that most users are open to advertising as part of their streaming experience. Fifty-five percent of surveyed consumers use at least one FAST service while 56% prefer to pay $4-5 dollars less per month for a service with ads. And the leading FAST services were rated an “excellent” or “good” value by 78-84%, depending on the FAST service.

In all honesty, I don’t expect that there will be many performance marketing opportunities on Netflix, HBO Max, or some of the other premium streamers in the near future because of the high prices and demand. It’s mainly for awareness, branding and top funnel advertising objectives. But their entry into the market increases the supply and acceptability of ads on streaming, which will create opportunities for performance marketers.

For select and targeted products and services, there will be premium streaming opportunities because the relevancy of the product to the streaming content will make the conversions worth the cost. For example, I believe that ITA, the state-owned airline of Italy which replaced Alitalia, could generate enough awareness and sales by advertising on HBO’s season two of The White Lotus because the Sicilian landscape is highlighted in almost every frame of the show. The fact that the entire show is an ad for Sicily should make the cost worthwhile for such a relevant advertiser.

While this example might be the exception, there are other opportunities, like advertising food ingredients on the Food Network or home improvement products on the Magnolia Network or other DIY channels. The right performance marketer with a relevant call-to-action can take advantage of the larger screens to achieve their Key Performance Indicators (KPIs).

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Here’s why I’m bullish about the performance marketing opportunities in streaming: 

1. Size matters:

After years of being confined to small-ish desktop ad units and even smaller mobile ad units, performance marketers can now benefit from exposure on any screen on streaming platforms. According to real-time streaming analytics platform Conviva, 77% of users viewed streaming via a smart TV or a connected TV device in 2022. This means that most users watching an ad while streaming are probably doing so on a large screen, enabling performance marketers to create richer ad experiences that will move users to action, whether it means scanning a QR code or downloading an application on any wireless device. And with Samsung reporting that only 3% of smart TV owners watch only linear TV, now is the time to bring performance marketing to the large screen. This will enable performance marketers to take advantage of the ‘lean back media experience’ of a TV vs. the more ‘on the go’ experience of mobile phones and even desktops.

2. TV + truer segmentation:

For years, digital marketing offered the promise of reaching the right users. Though it’s not perfect, it’s more targeted than linear TV. Currently, streamers enable better and more relevant targeting, including the ability to target audiences according to keywords, Designated Marketing Areas (DMAs), zip codes, and interests. Marketers can also apply audience-first targeting based on lifestyles and other attributes which align with the brand, such as user behaviors.

Before Apple terminated IDFA, the leading platforms offered marketers the best targeting at scale. But post-IDFA, with marketers lacking the ability to effectively target on platforms like Facebook, streaming platforms are an increasingly attractive ad vehicle for performance marketers.

3. The sports streaming opportunity:

With sports broadcasts the only video programming that can deliver masses of viewers in real-time, there will be battles for sports broadcast rights traditionally held by network TV or national TV. After Amazon Prime secured exclusive streaming rights for Thursday night National Football league games in 2022, and with Apple streaming Major League Baseball (MLB) Friday Night Baseball, expect more and more sports broadcasts to be streamed. Comcast-owned streamer Peacock is also broadcasting MLB baseball. Even Netflix has a bid on tennis rights in Europe and has considered cycling and surfing programming.

I don’t believe that premium sports or sports teams will be priced for performance marketers. But there will be opportunities in less popular sports to reach sports enthusiasts with the right creative and call-to-action that will enable performance marketers to achieve their KPIs.

In recent years, ad-supported streaming has increased exponentially based on new players, new business models and user growth. While some of the more premium streamers will be priced beyond performance marketers budgets, I do believe that now is the time for performance marketers to explore all of these new opportunities to bring performance marketing to the big screen via streaming.

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