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Data Also Indicates Stay-at-Home Directives Can Be Accelerating Cord-Cutting
18-to-34-Year-Olds Prefer Ad-Supported Streaming Over Subscription Streaming
The percentage of
The 18-34 age group has long been coveted by advertisers because of their disproportionally high disposable income, because they are at a stage in life where they are starting to build long-term brand loyalties, and because they are trendsetters for all age groups. That they are aggressively moving toward a new model of TV consumption means TV broadcasters and advertisers will have to develop new strategies for reaching them.
While the majority of American households currently subscribe to cable, the research indicates that cord-cutting will accelerate in the future. The urgency of these shifts is only becoming more apparent as almost all
These trends are expected to accelerate the longer that live sports programming remains suspended in the
“With only a quarter of young adults having any long-term interest in traditional cable TV, in a few years we won’t be talking about linear or cable TV at all. It will all be online and streaming,” said
The survey indicates that American TV consumers favor ad-supported streaming over subscription-based streaming as more and more Americans watch TV content via connected devices such as smart TVs – and 18-to-34-year-olds are once again leading that trend. Overall, 35 percent of these consumers would rather watch a free streaming service with advertising or some ads for a cheaper subscription, versus 31 percent who would prefer to pay for a subscription with no ads.
The preference for ad-supported services increases when the viewer receives value in return. For example, 66 percent of 18-to-34-year-olds would prefer to watch a streaming service with ads every other episode in order to lower their monthly streaming costs. That number drops to 55 percent for the 35-54 age group and 47 percent for the 55+ age group.
Younger age groups also have a larger appetite for ads that are relevant to their interests. By a ratio of 3-2, the 18-34 age group prefers tailored ads, the highest ratio of any age group. This suggests that younger viewers have the greatest awareness and appreciation for the value exchange between relevant advertising and access to free premium content.
The research also shows that the leading cause of frustration with streaming advertising among American subscribers is having to watch the same ad repeated multiple times (cited by 48 percent of subscribers). The second leading cause of frustration is having to watch too many ads overall (cited by 45 percent), followed by the number of ad breaks (cited by 37 percent).
“As more consumers shift to connected TV, broadcasters and advertisers can more easily address issues of ad frequency and ad volume, in ways that are not possible in a traditional TV environment,” said Stempeck. “With CTV, the advertiser can work with an ad tech partner to understand who was exposed to an ad, even across devices, and can reduce ad frequency as a result. In addition, with CTV, advertisers can apply more data science to their advertising, making it more relevant to the consumer without compromising their privacy. This increases the value of the ads, which means lower ad volume, over time.”
This survey for
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