The High Cost of Ignoring Streaming Ad Quality

Advertisers must follow their audiences, and audiences are clearly making the great migration to streaming. Revenue for streaming TV advertising is growing rapidly, with global digital video ad revenues ontrack to exceed $35.6 billion in 2019 and $58.8 billion by 2023. However, apart from the brand, everything about ads for streaming TV is different from ads for linear TV or ads for digital display (like a banner on a website) including how are purchased, placed, and interacted with. So why is the industry trying to measure ads for streaming using systems and technology built for linear or digital display?

The typical system of measuring streaming ads is designed with a single purpose in mind: to determine if the advertiser should pay for their ad buy. That determination is based solely on whether all or some of that ad played, measured using simple interval markers. That may have worked for traditional linear TV for the last 75 years, but ads for streaming TV are predicated on a much more complex delivery system, one that can’t be measured in a rudimentary, binary way.

What the antiquated measurement systems fail to recognize are the multiple experiential dimensions unique to streaming that will determine both ad effectiveness for brands and agencies and the publisher’s ability to monetize their inventory. Ignoring the depth of data available and its impact on the business bottom line is to the detriment publishers, advertisers and their consumers everywhere.

Anyone who has watched a program, movie, or promotion online knows that buffering and delayed starts are annoying, but these issues are also directly associated with the rate at which viewers leave. Consumers find these delays and quality degradations even more infuriating during ads. Conviva measured consumer impatience and discovered that after just a 5 second ad delay, 13.6% of viewers have already given up on waiting.

While viewers may get annoyed, it’s the streaming TV providers and advertisers that ultimately pay the price. Not only do advertisers miss out on exposure and opportunities for engagement, but the risk and missed opportunity cost is amplified when you take into account the subsequent ad breaks associated with that viewing experience.

As more viewers drop, the ability to monetize does as well. Conversely, advertisers can get stuck footing the bill for an ad that didn’t deliver with the quality they would expect, from start fails and delays, to buffering and playback errors. Conviva data indicates that as high as 47% of ad attempts may not make it to the viewers’ screens as intended, resulting in billions of dollars in lost revenues. While linear TV can set it and forget it, quality problems make streaming ads an engagement (and revenue) killer unless streaming TV providers adopt a dynamic approach that allows them to identify and address issues in real-time.

We’ve seen a wide range in the percentage of different errors, but even a 1% failure rate carries a high cost and brand impact for advertisers. It is critical for every publisher and advertiser to know what percentage of their ads are failing, identify what is causing the issues in real time, and immediately act to address the problems. With so much at risk: revenue, operational efficiency, customer retention, competitive advantage, publishers can’t afford not to pay attention.

Streaming offers the opportunity for much deeper understanding of audiences including how they consume and engage with both content and advertising. Amidst calls for a better system of measurement, because we all know the old way of doing things just doesn’t translate to the digital age, streaming TV providers that understand the importance of data are leading the charge.

For more than a decade, Conviva has been recognized for being at the forefront of streaming TV experience measurement and intelligence. We’ve identified and addressed many of the deficiencies of traditional ad measurement, extending our measurement capabilities to deliver real-world solutions for our customers with complete visibility and control over these new, time-critical and business-critical measures of success. You can learn more about our solution, Ad Insights here.

This is the first in a series Conviva has developed to help advertisers and publishers capitalize on the full value of streaming TV advertising and gain a competitive advantage in this dynamic marketplace. Be sure to return as we dive deeper.