Enhancing Digital Experiences Requires NSPs to Seamlessly Manage Mix of Subscription and Advertising Delivery Models, Reports Hoppr

• As content consumption has risen through the COVID-19 pandemic, consumers have demonstrated a willingness to pay for many ad-free online entertainment services.

• This growth, however, has not come at the expense of ad-supported content.

• 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.

As content consumption has risen through the COVID-19 pandemic, consumers have demonstrated a willingness to pay for many ad-free online entertainment services, as evidenced in the significant uptick in subscription revenue throughout 2020-2021. This growth, however, has not come at the expense of ad-supported content, according to Emilia Ong, Chief Revenue Officer (CRO) for Hoppr, an advertising technology innovator that offers targeted ad solutions for operators and Pierre Donath, chief product officer (CPO) and chief marketing officer (CMO) for 3SS—a provider of unique multiscreen software solutions—in a joint podcast interview for journalists.

Emilia Ong, Hoppr

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-based video on demand (AVOD) services—up 9% from January to April of 2020—with the total number of users set to reach 3.3 billion by 2025, according to analysis from Comscore.

"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-digital TV sales around the world explode," explains Ong.

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—and constantly changing—decisions as viewing, and entertainment options grow. They maximize their access to experiences by investing in a mix of premium and ad-supported content. This is has resulted in an opportunity for NSPs to secure insights into customer behaviors and desires in order to streamline access to content," he says.

Properly designed and carefully implemented programmatic advertising around the content navigation environment offers an opportunity for NSPs to monetize "in-between" moments when consumers move from one experience to the next.

"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," says Ong. "The good news is that many NSPs now find themselves uniquely positioned to expand their relationship with subscribers by offering a straightforward way to find, manage and consume subscription and ad-supported content."

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.

To read more, please visit: https://hoppr.com.au/