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How can marketers make the most of their advertising efforts as customer engagement fluctuates or declines on some platforms like ad-supported media?
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Consumers Cutting Back on Ad-Supported Media: What’s a Marketer to Do?

Consumers Cutting Back on Ad-Supported Media: What’s a Marketer to Do?

As normal levels of work, social, and leisure activities return post-pandemic, coupled with inflation impacting consumers’ shopping habits, a recent report shows a decline in ad-supported media engagement. After a surge of media usage during the 2020 pandemic, PQ Media’s forecast reports that usage has settled back down to pre-pandemic levels and, for ad-supported streaming like Netflix and Disney+, dipped below 2017 levels.

How do these trends impact marketing on streaming services and other online platforms? Will marketers have to pivot to traditional media? With rising costs, will customers continue to pay more for ad-free experiences? Don’t fear — the stats may not be as alarming as they appear, and making the most of your marketing dollars continues to be a creative game of strategic trial and error.

Media Usage: The Numbers

According to PQ Media’s 10th annual Global Consumer Media Usage Forecast 2023-2027, not all media usage is declining worldwide. Consider these stats:

  • Overall consumer media usage rose 2.7% in 2022 to 55.81 hours per week.
  • Global traditional consumer media usage was flat in 2022 (live TV; print magazines, newspapers, and books; film; video; radio).
  • Global digital consumer media usage rose 8.1% in 2022 (online; mobile; social media; streaming; gaming; ebooks; and more).
  • While global total consumer media usage rose 2.7% in 2022, the projection shows a slowing down trend in 2023 to a 0.6% increase. 
  • At 27.8 hours per week, television is the top media consumed, which includes live TV, on-demand and streaming videos on smartphones, laptops, PCs, and tablets.
  • Mobile video is the fastest-growing digital media, up 18.6% last year.
  • Ad-supported media accounted for 53.7% of consumption time in 2022, down from 58.5% in 2017.

The indication is this: Streaming platforms rely on commercials for ad revenue, so if engagement is waning, advertisers may need to adjust their strategy moving forward. In addition, consumers are often utilizing several streaming platforms for their favorite content; for example, a family may have Disney+, Netflix, Hulu, YouTube Premium, AppleTV, and more. Subscriptions add up; are families willing to pay for multiple ad-free versions in today’s economy?

“As consumers continue to cut discretionary spending in 2023 amid current consumer sentiment and other key macroeconomic conditions, media companies have had to readjust profit projections and act accordingly. For example, streaming video services reported in 1Q23 that they’re cutting back production schedules of original content, other than live sports, as the average consumer is dropping to only four subscription OTT services from six last year,” said PQ Media CEO Patrick Quinn.

Advertising Challenges

What are the impacts of less engagement with ad-supported media? Marketing Intelligencer outlines three major hurdles:

  1. Reduced audience reach and campaign efficiency on streaming services: Less frequency equates to less brand awareness and conversion rates.
  2. Increased competition: Less availability means it’s a tougher market to break through with engaging, memorable content.
  3. Rising ad costs: More competition equals rising ad prices, making advertisers question cost-effectiveness and ROI.

Marketing Solutions for 2023 Media Trends

TV advertising and ad-supported streaming platforms are already a pricey investment, therefore finding a strategy that meets consumers where they’re at is key. And Fandom reports a survey that 57% of consumers want ad-free subscriptions every time. But some services, like Netflix and Disney, are now adding an ad-supported more economical option after starting ad-free when they initially launched.

So, what are some ways to find and engage your customers? How can you build brand awareness and trust that converts? Here are a few ways to follow the trends:

  • Product placement and partnerships: Even if you can’t get your product in blockbuster films, look for ways to partner with social media influencers, local event sponsorships, and more.
  • Video: Mobile video is the fastest-growing digital media channel, so don’t be left behind. Utilize creative user-generated content, behind-the-scenes videos, instructional or informational videos on your YouTube channel, and social media videos (Facebook lives, Instagram Reels, TikTok) and ads. Read more about video content for business here.
  • Podcasting: Whether you host a podcast or go the circuit as a guest in your niche, mobile audio and podcasts are among the top five fastest-growing digital channels.
  • Great content: Beyond targeted advertising, don’t underestimate the need for keyword, SEO-friendly content on your website. Mobile searches put information in people’s hands, so ensure your website is fast, mobile-friendly, and provides a clear solution for customers, while still displaying your brand’s personality. 

If you want guidance on how to break through with your digital marketing, contact The Threadgill Agency for a consultation today.