According to Bridget Greaney, Consultant at Comcast FreeWheel, the basis of the analysis was derived from the rich anonymized first party data set culled from the FreeWheel platform on premium video for 1Q23, compared to 1Q22. This yielded key takeaways for the industry. According to Greaney, “We're seeing a shift toward more ad supported tiers with the convergence of publishers and consumers. The publishers are looking for a more financially sustainable approach to streaming often with subscription streaming sites.”
From the consumer side of the business, she indicated that, “Consumers are looking for a more a way to manage their costs as it was with original traditional television. We now see more ad supported premium video content which has resulted in overall ad view growth at 9% across the U.S and EU compared to the same time last year.”
Unsurprisingly, viewer experience is becoming an important factor in ad optimization. “There is the increasing importance of the viewer experience because there is so much more premium video relying on supported content that optimizing the viewer experience becomes vital,” she asserted. “It's always been important,” she averred, “but it's becoming even more so. We think of three different buckets of quantity, quality and relevancy of the ads for the audience and have found that audiences do not mind watching advertisements as long as it doesn't disrupt their overall content viewing experience.” In addition to ad relevancy, viewer experience is impacted by other factors such as device type and screen size. “How does that factor into what publishers may consider when it comes to the viewer experience?” she queried.
Comparing global to U.S. data, she explained that, “one very interesting point is how the distribution platform breaks down. TV everywhere is most prominent in both the U.S. and the EU. But that's where the similarities for distribution platform end. There's a significantly larger use of operator authentication platforms in the EU than in the U.S. and a lot more OTT in the U.S. and that's in part because Europe has a much stronger use of set top boxes whereas in the U.S., FAST channels that are direct to consumer through OTT platforms are more prominent. It is interesting to see that while the majority platform still is the same in both worlds once you start digging in, different regions function a bit differently.” She saw from the data that, “Content curation opportunities vary by platform. Longer form content may be accessed on a larger screen, for example and you can do longer and more mid-roles which enable greater ad loads.” But according to Greaney , oftentimes the threshold for those number of commercials can become disruptive for a viewer. “They have a low threshold. So you have to be more particular.”
In terms of trends, Programmatic is one area which has experienced dramatic growth over the years. “We saw 21% growth in the U.S. in programmatic distribution. It is current 35% of the ad views in the U.S. and 19% in the EU in the first half of this year. It is a growing area of the industry,” she noted.
Finally, when you compare audience targeting to behavioral targeting, the U.S. is more committed to audience targeting while the EU relies more heavily towards behavioral targeting.
Looking ahead, Greaney believes that, “The video marketplace will have more content being ad supported and premium video,” within a hybrid model of video on demand subscription services and FAST channel growth. “This is becoming more of a trend,” she explained, “Evolution has always been the nature of the industry. Think about traditional television and commercial breaks. We're just seeing more and more of that happen across the board. The other piece of this is the importance of viewer experience, especially as the market becomes more saturated for consumers.”
This article first appeared in www.MediaVillage.com
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