Majority of connected TV users are streaming with ads - study

Connected TV users are embracing ads as streaming continues to trend towards ad-supported content, according to new findings from LG Ads Solutions.

The study indicated 80% of consumers use ad-supported models of CTV, with 67% preferring those models over subscription-based CTV services.

What’s more, consumers are unloading their subscription count, as 30% of respondents said their household removed a paid CTV subscription in the last 12 months. During that time, 25% said they replaced it with a free ad-supported service.

For the study, LG Ads surveyed over 770 U.S. consumers in September 2022. Tony Marlow, global chief marketing officer at LG Ads, noted the results are indicative of two “big shifts” in TV viewing habits.

“The first big shift was rapid adoption of streaming content on connected televisions, fueled in-part by stay-at-home guidance at the onset of the pandemic,” he said in a statement, adding this trend was “underpinned by subscription-based video content.”

“The second big shift is underway right now,” Marlow continued. “Consumers are drifting away from some of their CTV subscriptions and increasingly preferring free content that is supported by ads.”

But streaming subscriptions are still in widespread use. LG Ads asked consumers which services they use the most. Nearly three-quarters (72%) of respondents said Netflix, followed by Prime Video (59%) and Disney+ (52%).

Netflix will likely be popular with the ad-hungry crowd, as the streamer just announced its lower-cost ad-supported tier – costing $6.99 per month – will launch in November. Recent Samba TV data found nearly half (46%) of current Netflix subscribers would consider switching to an ad-supported model.

It’s unsurprising people would rather stream with ads than pay more for a subscription, as they generally find streaming ads more interesting than ads on linear TV – per an LG Ads and DeepIntent study from June .

Relevance is key, LG noted, as 76% of consumers said they prefer ads relevant to their interests. While 65% would rather see ads relevant to the content they’re watching.

The CTV environment can also enhance the viewing experience for ads. Comcast Advertising and MediaScience suggested consumers are more likely to remember TV ads than those on mobile, because full-screen ads are less distracting than ads playing on a phone.