Consumers show high online TV ad acceptance | Media Analysis | Business
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When it comes to online video, ad acceptance is higher among consumers than one might think; so high, in fact, that most TV viewers would rather watch ad-supported online TV than pay for a subscription service like Netflix.

hubThis is the key finding of a survey from Hub Entertainment Research that found the online TV market appears to be settling on monthly or yearly subscriptions as its pay model of choice. One example is Hulu’s recent decision to discontinue its ‘free-with-ads’ service and focus solely on its paid subscription tiers.

But Hub’s research shows that a majority of TV consumers (53%) say they actually prefer free TV, where they ‘pay’ by viewing commercials.

That’s not to say that ad-skipping options go awry. In fact, the majority of TV viewers say they skip ads whenever they have the chance. More than eight in ten (83%) of DVR users skip ads at least ‘most of the time’. That includes 60% who say they skip every ad.

Two-thirds (68%) of DVR users say they will at least sometimes pause their DVR at the beginning of a live broadcast, so they can fast forward through ads. One-quarter (26%) say they do this every time.

Majorities (52% to 56%) skip ads ‘most or every time’ on video-on-demand (VOD) and online platforms, when fast forward is available. What’s more, when fast forward has been disabled on a TV platform, many TV viewers see that as more than just a minor annoyance, with nearly half (45%) saying that fast forward disabling is a major frustration.

What consumers seem to be saying is that ad supported TV is still an appealing pay model, but the way ads are incorporated into online TV disrupts the experience and makes alternative platforms more appealing.

“Conventional wisdom says that consumers simply don’t like ads on TV. But what our study suggests is that they don’t like the way ads are delivered on TV,” said Peter Fondulas, principal at Hub. “Consumers say they’d welcome having ads more targeted to their interests and product needs. And what’s especially interesting is that better targeting of ads based on past purchases doesn’t appear to raise major privacy concerns.”

The survey tested a number of ideas for making ads in TV content more engaging. Consumers had the most positive reaction to three strategies: lighter ad loads, targeting and gamifying.

One ad per ad pod (rated as a 9.3 in terms of likelihood to pay attention to ads) was the highest rated idea tested. Ads more relevant to interests fared well too (8.1), as did fewer ads but more targeted to the user personally (7.1), and ads shown based on product categories chosen in advance (5.9); all of these scored higher than average.

Gamifying the ad experience is positive too. Models like earning points for watching ads (8.2), earning promo codes for watching ads (7.3), and including a countdown clock for when the show will resume (5.9) all received strongly positive scores.

“Some networks have already started down the path of reducing ad loads on TV, but making the ads themselves more relevant to the individual viewer is a tool that will make ad-supported TV more effective for advertisers, and more enjoyable for consumers,” said Jon Giegengack, principal at Hub.
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