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A single-digit percentage of the $3.4 billion invested in Australian TV advertising last year went to ad-supported streaming on connected TVs, despite 70% of viewing time spent streaming.
In Samsung Smart TV households in the March quarter of 2024, 30% of viewers were watching ad-supported streaming with another 40% giving their time to ad-free streaming; the remaining 30% were still watching linear.
Samsung Ads MD for ANZ & SEA, Alex Spurzem, told AdNews that the findings in the recent ‘Behind the Screens’ study by Nielsen show that there's uncertainty among advertisers and marketers in terms of how much of that Total TV budget should be allocated to ad supported streaming.
"We gave a sneak preview to the Video Futures Collective and we heard from multiple, very senior marketers in this country that what they're looking for is assistance in terms of evidence and insights [that ad-supported streaming works]. They're not looking on a per-publisher basis; what they're looking for is single reach figures and category evidence," he said.
"A lot of the times when you have uncertainty, that introduces also a little bit of paralysis, so now we have to try and help and bring proof points and also address the risks; there is significant risk now for marketers that do not move [into ad-supported streaming]."
The latest SMI figures show that TV was down 14.6% in March, weaker than most market forecasts of around a fall of 13% for the six months to June.
The 'Rule of 30' study, using a broad 18-54 year old demographic and maximum campaign spend of two million dollars, found that campaigns produced a higher net reach when 30% of the budget was allocated to ad-funded streaming and 70% to linear TV ads.
With Netflix having already introduced ads in market, and Amazon, Paramount and Disney soon following suit with their own streaming services, Spurzem said that consumers have moved faster into streaming in Australia than in other markets, but the investments in terms of ad dollars have moved slower.
"If you compare that to the UK, the share of consumption on streaming is actually a little bit closer to 60%, but the CTV ad spend is already at about a 20% share of Total TV spend there," he said.
"Now what will happen if you have more of the streaming giants introduce ad tiers here? I think they're going to grow slower because of the economic environment, but ad tiers in multiple services give us more options. It means that ad-funded streaming consumption will only increase further so that the entire premise [of the Rule of 30] isn't going away; if anything, it's going to be even more pronounced."
Nielsen's head of publishers and platforms, Kirsten Riolo, said that the introduction of more global players into the local ad-supported streaming market has the potential to expand both reach and frequency for advertisers.
"If we've got new eyeballs in the market, we've got new audiences and I would say if we're doing this study again in a year, we will see again shifts in the way consumers are taking content in and the frequency and the reach will probably be echoing some of those changes," she told AdNews.
"Some of the work that Nielsen has done overseas is very much focused on that fragmenting market and how to best capture those audiences that are now using a range of different ways to watch TV and they see it as content. They don't particularly see it as a BVOD, SVOD or FAST the way we do. They just see it as great content.
"As long as that content is there for them to enjoy, we're going to see new ways to target them, innovative ways to target them, but also strategically looking at the numbers in the best way to target them."
The study found that allocating 30% of budget to streaming allows for higher maximum reach across all spend levels compared to using linear or streaming platforms alone.
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