Streaming has fundamentally changed the way in which many people consume movies and TV at home, and as part of that change companies have had to rethink the way in which ads are delivered to ensure the same level of revenue is generated from ads while taking account of the advancement in the ways in which ads can now be omitted from the viewing cycle. In other words, ads are also changing and according to a new report out of Variety, the new ad format is the pause button.
The report picks up on comments provided by various industry people who are banking on the success of utilizing the more natural breaks people take. This is particularly in reference to binge sessions where consumers engage in prolonged levels of viewing, with those in the advertising circles now of the understanding there are these moments that naturally occur when viewers self-pause content to do something - replenish those snacks or head to the bathroom. It is in these moments that advertisers are now seeing the value of placing an ad in replace of just a still shot of whatever’s paused. What’s more, these same companies and advertisers see that value only increasing as more people turn to streaming and by association, binge more in the future
Hulu and AT&T to launch ‘pause ads’ next year
According to the report, one of the first companies who will formally introduce the new ad method is Hulu with the suggestion the streaming service will launch “pause ads” at some point in 2019, although no further details on this were provided. Therefore it remains to be seen whether this will just replace the current ‘with ads’ option provided by Hulu or whether it will alter price plans to some degree. Especially considering another report from October highlighted how Hulu was looking at adjusting its live TV options in general to focus on offering consumers more of an a la carte approach to channel bundling. While there’s no specific suggestion the two are related, the timing suggests in general there could be some big changes coming to the way Hulu operates and generates revenue next year.
Along with Hulu, the report also mentions how AT&T is also looking at implementing a near-identical advertising solution next year. Again, the details on what AT&T is planning are just as light but the report has a member of AT&T’s advertising division on record stating the company intends to show a full-motion video when the viewer pauses content. Interestingly, the AT&T exec provided a more revealing aspect by pointing out that in the moment of pausing and un-pausing the viewer’s attention will inevitably be entirely focused on the ad - “100% viewability” from the ad's perspective. Like Hulu, 2019 is shaping up to be a bit of a defining year for AT&T's video ambitions considering it plans to launch a new hardware solution powered by DIRECTV NOW in the first half of the year, and a new streaming service driven by content acquired through its Time Warner purchase in the second half. So it stands to reason, one or both of these new models might adopt the new pause ads method, if not all of the company’s respective services.
The start of things to come?
With Hulu and AT&T both seemingly intent on launching pause ads next year it seems highly likely they are not going to be the only ones, and so it should be expected more services will also look to offer a similar method of ad delivery. On the one side, this type of ad is beneficial in the sense that is does not create any unnecessary or unnatural interruptions in the viewing experience as it is simply taking advantage of the interruptions that are already in place and most importantly, initiated by the user. However, that’s not to say all consumers will view this type of ad in the same way, as this could also be seen as more of an intrusive element considering it’s a very aware way to deliver ads. Instead of ads being delivered at preset intervals, this type of mechanism relies entirely on monitoring the user’s viewing and noting exactly when something is paused, triggering the launch of the ad.
Pause ads alone are not enough
Data collection is likely to be another big player in the world of streaming going forward as while companies are now looking at aspects like pause ads as a means to help with generating revenue, they alone or not going to be enough. Certainly not enough to recoup the level of investment a company would expect from ads that are delivered through more linear means. As in addition to the less frequent and unpredictable element of when an ad is shown, companies will not be able to offer any firm guarantees on how many eyes will see these ads in the first place. Therefore, other elements will naturally come into play and data collection looks likely to be one of them.
Many advertising companies have already been somewhat candid about the fact that data collection is going to play a more leading role in the future as they are keen to confirm to advertisers and brands that the new video consumption methods open the door for better targeted ads - the other element that's likely to have a big impact. As compared to before when national, or at least regional ads were displayed indiscriminately to everyone, video streamed will likely include ads that are far more tailored to the user. Although good in the sense that it means the ads a user is exposed to will likely be more applicable to them, it also means the race will be on to ensure data is not only collected, but collated to provide the most informed picture of the user it can. For example, it might not just be based on your viewing habits, but also age, occupation, income, and interests, as well as the more obvious data elements, like location.
Of course, this also means that if advertisers and the rest of the industry has its way, then these different ad options will likely roll up and be packaged into one super streaming ad. One that not only shows up each time you pause the latest episode of The Walking Dead or Westworld, but one’s that are highly tuned to you while you’re tuned to the TV.