Enhancing Digital Experiences Requires NSPs to Seamlessly Manage Mix of Subscription and Advertising Delivery Models
Indeed, there is ample evidence that most consumers, through the pandemic, have simultaneously accessed ad-supported offerings. According to the consumer research firm Piplsay, 82% of U.S. consumers in 2021 watched content on streaming platforms, with 31% accessing a mix of paid and free services, 18% consuming paid ad-supported services and 14% enjoying entirely free ad-supported offerings.
More interesting, however, is the fact that 60% of consumers surveyed said that they had switched away from ad-free options. U.S. households are increasing their viewing of advertisement-
"This shift presents a major opportunity for network service providers (NSPs) around the world," says Ong. "As interest and engagement with ad-supported content rise, NSP broadband subscribers represent a new frontier for advertisers. It is an especially exciting opportunity as smart-connected-
Adding to a growing sense of urgency for advertisers to embrace this emerging audience engagement platform is the looming end of second and third-party "cookies" which will alter the nature of advertising on digital platforms.
"It is creating a compelling imperative to access first-party data, prompting NSPs to revisit and revamp their connection with subscribers while establishing new partnerships with the advertising community," says Ong.
According to Donath, success for NSPs will hinge on the ability of consumers to have a seamless, intuitive and secure navigation experience.
"Consumers are making interesting—
Properly designed and carefully implemented programmatic advertising around the content navigation environment offers an opportunity for NSPs to monetize "in-between"
"These insights are critical as new programmatic advertising business models are considered by NSPs," notes Ong. "Research has consistently shown that consumer sentiment is significantly more positive—making them more likely to engage—when relevant and interesting content and ads are presented to them. This creates the potential to deliver the sector's next multi-million dollar opportunity."
Managing Content Volume and Complexity
It is in this context that the industry is witnessing strong growth of free ad-supported streaming (FAST) channels like Pluto, Tubi, Peacock, notes Donath.
As customer attitudes about paid subscriptions continue to evolve, data collection will open the door for these FAST channel providers. It creates new integration opportunities that lead to new service offerings that will allow these channels to obtain market share. This, however, introduces complexity for consumers looking across many different content providers for their next entertainment experience.
"NSPs and pay-TV operators can offer a solution to an industry-wide problem by going to market with holistic content discovery and unified billing," adds Donath. "With screen time at an all-time high—providing an endless supply of insight into customer preferences and behaviors—these sectors are sitting on a goldmine of first-party data that has yet to be tapped."
Pay-TV providers and NSPs alike will have to be extremely agile as they adjust their business models to address today's dynamic market.
"It will be important for companies that hope to succeed in this environment to communicate options to consumers—especially younger audiences—clearly, consistently, and impactfully,"
It opens the door for many brand managers and advertisers to connect with hyper-targeted markets through highly personalized campaigns. It creates accuracy and transparency that has not typically been associated with television advertising.
"Programmatic advertising that leverages new content navigation user interfaces can contribute to high-quality experiences by eliminating irrelevant advertising while better curating the content users want to access," says Ong.
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