2025 Predictions for Ad-Supported Streaming
The beginning of the new year is nothing without it Everyone makes predictionsHere are some that apply to the advertising industry. Broadcast advertising It works very well when compared to the following ad dollars left linearly.
Lean-Back is back
Consumers have discovered that part of what we find fun after a day full of emails and meetings is not making a lot of choices. Not making too many choices means settling for an ad-supported offer. This means more speed. The biggest competitor here is The Roku Channel, which reported 83.4 million viewers in the US in 2024, according to data from Statista. Tubi had 74.6 million, followed by Pluto TV with 61.7 million, Amazon Freevee with 57.1 million, Crackle with 36.8 million, and Samsung TV Plus with 23 million.
2,024 fast viewers in the US by platform served by Statista.com
With every major streaming service starting an ad-supported subscription in the past few years. MNTN Research It shows Peacock expects 84% of its viewers in 2025 to watch through an ad-supported subscription, followed by Hulu at 65%, Paramount+ at 58%, Disney+ at 36%, Max at 28%, and Netflix at 15%.
Almost all of these services offer self-buying for small and medium advertisers. Streaming services are choosing the approach of not leaving advertisers behind and making sure they don’t leave any money on the table.
So, if you’re a local car dealer or a restaurant chain, you have two options. First, you can use these self-service tools yourself. Your ad buyers need to decide things like who you want to reach, the CPM, how long the campaign should last, or if you have any customer data or guidance on similar demographics.
Then, even if you can actually buy that ad yourself and take care of all the targeting — since these self-service platforms have made that easy enough — you need an ad campaign that can include multiple ads. Depending on the size of your company, there are AI tools that can create an ad for you, unless you want something a bit more complex, which means you need an agency to create an ad. Hold that thought for a moment.
Follow the money
Social media was not previously suitable for live streaming with how easy it was to buy ads. In a research study he conducted PremionCTV/OTT was ranked as the most important place to advertise at 69%. Surprisingly, social media came in second place at 43%, followed by linear television at 35%. This study reached advertisers whose average annual ad spend was $118 million. The top two categories here were advertisers spending between $5-50 million (39%) and > $50 million (41%). This includes all those big brands that are household names.
Three out of five CTV/OTT advertisers plan to increase their spending this year with an average increase of 21%. Nearly three-quarters are moving their budgets from existing budgets and another quarter will use new budgets. The biggest shift is that 45% of ad dollars will move from linear TV to CTV/OTT.
Another retrospective statistic confirms this in a report published in April 2024, looking at 2023 numbers: IAB PwC report He says video, including CTV, now represents 23.2% of total ad revenue, reaching $52.1 billion in 2023, with 10.6% year-over-year growth.
Make a big leap
What this tells us is that streaming has truly won the linear streaming war (the insider streaming war is another topic for another day). In order to keep this momentum going, there’s one thing we need to improve on: reach and frequency. While this seems like the same old story, companies say they are slowly getting better at this. Look to generative AI and big tech in the coming year to help us properly solve this persistent problem.
This has been a problem searching for a solution for years. All that time, I’ve been listening to people complain about three things:
- This will only change very slowly because there is no incentive.
- The Interactive Advertising Bureau (IAB) can help in this area.
- Brands will lead the change.
What strikes me about this phone tag logic is that we’re missing the real story. Do you know who will lead the change? It’s the same retail giant that disrupted the publishing industry and many other sectors after that.
As one analyst told me a while ago, the $5 and $10 subscription price increases that streaming services implement on a semi-regular basis won’t do enough for them (particularly because they can’t count on maintaining their subscription numbers as prices rise along the way). For Amazon with Prime). They have to do their best in advertising.
What we need now is some really smart technology to come along and solve this problem. If I were running ads for any media company, I would start selling my inventory through Amazon and let them figure out how to address this issue. This superior metric has already hit the market this year and has created a lot of buzz, resulting in lower CPMs. It’s time to do better than keep building more demand-side platforms (More than 80 at last count).
Amazon has the money, technical expertise, data management, and extensive know-how to do what it has done for everything else. Then, finally, we can move on to another topic of conversation other than reach and frequency, and media companies may find a way to make more money than they have for years as they take their baby steps.
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