The Rise of Ad-Supported Streaming: Insights from LG Ad Solutions
With the growth of streaming services, consumers are making their preferences clear: they want their content free and supported by ads. The third wave of LG Ad Solutions’ annual study, titled “The Big Shift: Wave III,” sheds light on the evolving habits and preferences of Connected TV (CTV) users. With data collected from over 1,100 U.S. CTV owners, this comprehensive research offers valuable insights into the dynamics of the streaming landscape.
According to the study, a staggering 69% of CTV users prefer streaming free, ad-supported content over paid subscription services without ads. This preference for Free Ad-Supported Streaming TV (FAST) content highlights a significant shift in consumer behavior, signaling a departure from traditional models of TV consumption. Tony Marlow, CMO at LG Ad Solutions, notes that this trend underscores a seismic change in CTV habits, transforming it into a dynamic platform for immersive, personalized experiences.
In conversation with StreetFight, Tony Marlow stated “Consumers are sending a clear message about what they want out of their CTV content experiences – from programming, to ads and interactivity. The days of passive viewing are over – and the future of CTV is an immersive and personalized environment by which brand marketers can tell impactful stories that drive performance and results.”
Furthermore, the study reveals that over half (53%) of CTV users spend two or more hours per week engaging with FAST applications, underscoring the popularity and widespread adoption of ad-supported streaming. This finding underscores the growing importance of advertising-supported models in the streaming ecosystem.
However, as the abundance of content continues to grow, viewers are facing new challenges. The LG Ad Solutions study shows that the time spent searching for what to watch has nearly doubled, with viewers now taking an average of 12 minutes to decide on content, up from 6 minutes in the previous year. Additionally, over a third (38%) of respondents cite too many content choices as their top challenge, with platform fragmentation leading to difficulty in remembering where specific content is located.
Another notable trend highlighted in the study is the phenomenon of subscription app cycling, where 63% of viewers sign up for streaming services to watch specific content and then cancel or pause their subscriptions after consumption. This behavior underscores the need for streaming platforms to continuously offer compelling content to retain subscribers.
In terms of advertising preferences, the study indicates a growing interest in interactive ads among CTV users. Forty-two percent of viewers prefer ads with interactive features, with QR codes emerging as a particularly popular tool for engagement. Seventy-one percent of viewers express a favorable attitude towards TV ad creatives that include a QR code, while 38% are likely to make a purchase after scanning a QR code on a TV ad.
