The connected TV (CTV) environment continues to change and evolve. More and more consumers are flocking to streaming, and ad channels are creating new, ad-supported offerings to match. So what do advertisers need to know about the current state of streaming, and how can they be sure they are effectively reaching their target audience?

Are viewers choosing ad-supported options?

Many channels like Netflix and Disney+ have added ad-supported subscription options to their services—but are consumers actually signing up for them? While perhaps surprising to some, the data shows that consumers are indeed willing to watch ads in exchange for their favorite content.

In Q4 2023, a majority of streaming signups were ad-supported, according to an EMARKETER report. Ad-supported channels are offering streamers what they originally came to CTV for: entertainment that doesn’t cost an arm and a leg. Many cord-cutters or cord-nevers turned to streaming to help counteract the high costs of cable subscriptions, only to find the ad-free prices quickly adding up. Now they have more price-efficient options, even on their favorite premium channels.

One place this is evident is in the increasing popularity of FAST (free ad-supported streaming TV) channels. These channels further supplement viewers’ hunger for additional content without driving up their monthly bills. Plus, FAST channels offer a return to the linear TV experience of always-on content, eliminating the need to swim through a sea of on-demand content just to find something to watch.

Counteracting the streaming fragmentation

With more and more channels being launched and top content providers adding new ad-supported tiers, fragmentation may be a concern for advertisers. While these offerings do offer an abundance of premium content for brands to run ads against, this fragmented space inherently means audiences are spread out over multiple services, which can make awareness-focused targeting difficult.

CTV can also be leveraged as a performance channel, just like paid search and social, allowing advertisers to get ahead of the challenges of fragmentation by embracing an audience-first strategy. This means they can focus on finding their highest-intent audiences, no matter where they spend their screen time.

Capturing attention in a noisy world

Since viewers are turning toward ad-supported streaming, it’s important that advertisers create truly attention-capturing ads. The best chance of getting a viewer engaged is by including something clever, surprising, or enticing within the first three to five seconds of the ads. This will vary by target audience—no ad is one-size-fits-all. That would certainly get boring quickly!

Creative variation is also essential for reducing ad fatigue. Ads naturally lose effectiveness over time. At MNTN, we’ve seen that evergreen creative should be refreshed about every two to three months and seasonal creative even more frequently. Another benefit of running CTV as a performance channel means advertisers will be well-equipped with data to understand when their ads are starting to lose effectiveness and drive fewer results.

While the continued evolution of ad-supported streaming will inevitably come with challenges, this shift back to a model of watching TV we’ve been accustomed to for decades is opening up new advertising opportunities and inventory. Savvy marketers can use the performance power of CTV to make the most of this new era of streaming and continue to reach their target audiences on the biggest screen in the house.

For more CTV insights, check out MNTN’s Performance TV Content Resources.