With Netflix's recent decision to enter the ad-supported arena, the last bastion of subscription-based, ad-free streaming is collapsing—a move that ushers in the next phase of connected TV.
As more premium video options are available than ever before, consumers are increasingly preferring more cost-effective, ad-supported video on demand options (i.e. AVODs) over more expensive, ad-free offerings. While AVOD services are a more economical way for consumers to enjoy their favorite content, they also offer critical benefits to streaming publishers and advertisers alike. For publishers, AVODs provide additional revenue to help support growth, while advertisers are investing in them more and more to reach and engage with audiences they’d never be able to find through traditional mediums like linear TV alone.
Netflix's willingness to incorporate ad-supported tiers moving forward, just a little over a month after Disney made a similar announcement, further shows why the most exciting time for TV advertising is right now. In addition to advertisers now having more opportunities to establish a presence across streaming platforms and connect with new audiences, airing on CTV also allows for greater experimentation with more interactive ad formats that encourage greater engagement with the ads themselves. Perhaps most significantly, the tech now exists for advertisers to consistently measure and optimize AVOD campaigns right alongside linear campaigns, providing them with a full view of their total audience via cross-platform TV investments
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