76% of viewers willing to watch ads for free video streaming, study finds

Dive Brief:

As more consumers acquire connected TVs (CTV), they are increasingly feeling fatigued by paying for multiple streaming subscriptions, and many would prefer ad-supported free content, according to a new report from Integral Ad Science announced via press release.
Eighty-eight percent of consumers have access to a CTV device and 59% prefer CTV for streaming. Some 83% of respondents said they have access to at least one paid video streaming service. The average CTV viewer has access to three subscription services, though there is diminishing growth.
Still, some 76% of consumers said they would be willing to view ads on these networks in order to watch content for free. About 55% of consumers said it's important that ads run with high-quality video streaming content. This supports a previous report from Integral Ad Science that found 81% of viewers are annoyed when a brand runs an ad next to low-quality content. Nearly two-thirds of people said they would abandon a brand whose ads appeared alongside low-quality content.

Dive Insight:

The streaming explosion over the last several years has given consumers an array choice on which services to subscribe, including Netflix, Amazon, Hulu and Disney+. The variety of choices have helped push the cord-cutting trend as consumers seek large amounts of content created or hosted by each of the different players.

However, consumers are only willing to spend so much money for these services before they feel fatigued. Three subscriptions seems to be the most common maximum that people are willing to pay for streaming content. Beyond that, consumers may be willing to watch ads in exchange for new content, Integral Ad Science found. This holds an opportunity for advertisers to help support viewers' appetite for digital video consumption, which continues to grow. This may suggest why Fox Corp. recently spent $440 million on the free ad-supported streaming service Tubi, Adweek reported.

The new study by Integral Ad Science echoes that of a recent report from The Trade Desk, which found that 53% of consumers are open to watching ads when streaming video in exchange for a lower subscription price.

As advertisers look for ways to take advantage of this opportunity to help subsidize consumer viewing habits, they must do so with care, Integral Ad Science's report suggests. Consumers will lose respect and potentially abandon brands whose ads run against low-quality content, so brands must tread carefully when creating these partnerships.

Also, the ads should be relevant to the programming, or consumers may not be as open to watching ads in exchange for cheaper or free content, as The Trade Desk report revealed.