64% of CTV viewers prefer ads to paying more for a subscription service

With connected TV viewership continuing to grow, advertisers are looking for ways to leverage their product into that space. According to a study by healthcare ad tech company DeepIntent and LG Ads Solutions, 64% of CTV watchers would rather see ads than pay more for a subscription service, suggesting advertisers wouldn’t be met with much resistance.

Viewers also had a more positive impression of CTV ads, the results found, compared to ads on cable. Relevance is a key factor, with 57% of respondents saying ads they see on streaming services and apps were more relevant – thus more data driven – than ads found on linear TV.

The study surveyed over 2,900 U.S. adults who own LG smart TVs. It also analyzed self-reported viewing behavior in tandem with respondents’ actual viewing habits, by using LG’s automated content recognition (ACR) technology.

LG isn’t unfamiliar with ad-supported streaming. The company partnered with CuriosityStream in March to launch FAST channel Curiosity Now for the latest versions of LG smart TVs.

The study went on to say programmatic advertising enables more relevant ads, and CTV campaigns can more specifically target users than linear counterparts. CTV marketers can, for instance, leverage anonymized healthcare data.

That technological capability is bolstered by viewer attitudes towards relevant ads. When respondents were asked how they perceive relevant ads, 54% have a positive impression, 35% were neutral and only 11% of respondents disliked relevant advertising.

Smart TV advertising is a lucrative field, other studies have found. CTV ad spend rose to $15.2 billion – a 57% year-to-year increase – in 2021, according to IAB. And Innovid’s recent report unveiled CTV made up 46% of 2021 video impressions, surpassing those of mobile and desktop devices.

LG and DeepIntent also suggested over half of respondents are watching CTV without realizing it. The companies compared self-reported responses with LG’s ACR data and found 96% of linear TV viewers reported watching their favorite shows via cable or satellite box. This is a stark contrast to what the ACR data determined, that actually 48% of linear TV viewership came from traditional means, whereas 51% watched content digitally.

The study suggested the discrepancy comes from the notion that unlike advertisers, viewers don’t discern between linear and CTV. They could, for example, not differentiate between HBO's cable service and HBO Max, and may have misreported their results.

Viewer flexibility towards ads stems from a growing interest – on the distributor side – in ad-supported content. In a recent Fierce Video column, One Touch Intelligence’s Michael Grebb points out there’s a renewed ad urgency within both linear and streaming environments. Subscription-based services are using FAST channels, Grebb noted, to seamlessly enter the ad game.

But the positive sentiment towards ads doesn’t suggest the AVOD model is the be-all, end-all option for viewers. The study asked respondents if they would consider subscribing to a new service without an ad-free option, provided it has the “right content.” The majority of respondents – 77% - said yes, indicating content remains at the forefront of consumers’ minds.