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The Evolution of Ad Buying for Streaming Platforms: Out With The Old, In With The New

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The digital TV and streaming services we know today have made major strides since their inception in the 2010s. Rapid adoption by audiences has made the shift toward direct-to-consumer streaming portals one of the most talked-about trends in the industry for marketers and media companies alike.

As a result, the market for subscription services from the likes of Netflix, Hulu, and Disney+ is becoming more saturated. This development is leaving advertisers excited for the opportunities ad-supported streaming services present — both in terms of reaching the audiences of emerging services like Free Ad-Supported TV (FAST) and the technology being developed to simplify and integrate the ad-buying experience for streaming platforms as they evolve.  

In terms of an immediate outlook, advertisers should pay close attention to subjects like the enhancement of advanced TV types, such as addressable advertising, and the urgency surrounding digital-linear convergence. 

Addressable Advertising 

Technological advancements combined with shifting audience viewing patterns have led to growing opportunities for addressable advertising, allowing for household-level, or even device-level targeting. This means households can be served different advertisements while watching the same program. Even individuals watching on different devices within the same household can be served different ads. This allows for a more precise, more personal TV and video experience. The adoption of new platforms like FAST and the shift to a NextGen TV environment have helped move addressable advertising forward.

Free Ad-Supported TV (FAST)

Free Ad-Supported TV (FAST) platforms, which allow users to stream ad-supported content for free, are a major trend that allows for more precise audience targeting. As households continue to eliminate cable TV and the subscription market becomes saturated, FAST platforms present growing ad-buying opportunities. FAST platforms like Peacock and Tubi provide consumers with an alternate content delivery channel, one that offers the addressable advertising capability long sought by broadcasters and advertisers alike.

As a result, ad tech companies have made strategic partnerships with cloud-based tech companies, such as WideOrbit and Amagi, to allow broadcasters to insert ads into live streams using existing workflows and infrastructure

NextGen TV (ATSC 3.0)

Many advertisers are focused on the launch of NextGen TV, which, in basic terms, is  IP-based over-the-air broadcast TV. Aside from the cost of compatible hardware, it’s also free. Also known as ATSC 3.0, NextGen TV has been rolling out in markets across the country for over a year, currently lives in almost 30 major US markets, with more stations going live every day.

Because NextGen TV is IP-based, it allows for addressable advertising in much the same way that Google, Facebook, and their ilk do. This allows advertisers more precise targeting while also allowing pay-for-performance billing based on impressions delivered.

The Convergence of Digital and Linear

The media industry has been discussing the concept of digital and linear convergence for years, but the recent growth in digital has added a new sense of urgency to the conversation. This is in part due to the huge revenue opportunity digital represents, as over-the-air revenues have remained flat while digital continues to grow exponentially. Not to mention, the OTT market is growing at an astounding CAGR of 29.4%, according to Allied Market Research.

Digital-linear convergence means broadcasters can manage both inventory types together, within the same systems and using the same workflows, which also makes it easier to offer advertisers traditional deals and automated ad buys for both media types. In short, convergence streamlines the process for advertisers to buy the inventory types they need, whether that’s linear, digital, or both.

Moving Forward

The trends described above are just a few ways that ad buying for streaming platforms is shifting to better meet the needs of marketers. Ad tech and software companies are continuing to build out the technical infrastructure required to keep these transformations moving forward so advertisers can easily reach consumers no matter how or where they’re viewing content.

[Editor's note: This is a contributed article from WideOrbit. Streaming Media accepts vendor bylines based solely on their value to our readers.]

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