LG Ad Solutions Sees Viewers Shifting To Ad-Supported CTV

LG Ads Solutions
(Image credit: LG Ads Soluitions)

It looks like people don’t hate advertising as much as they dislike paying for streaming TV.

In a new survey conducted by LG Ad Solutions, which sells commercials, 80% of respondents said they use ad-supported connected TV models, with 67% preferring those models to more expensive ad-free subscriptions. 

The survey found that 30% of consumers have dropped a subscription connected-TV (CTV) service in the last 12 months, while 25% have added a free ad-supported CTV service during that same time period.

And going forward, 31% said they are planning to remove a subscription service in the next 12 months, while 23% are planning on adding more free ad-supported CTV services. 

The results support Netflix’s decision to move quickly to launch a cheaper, ad-supported product, which will appear in November and cost just $6.99 a month.

“There have been two recent ‘big shifts’ in television viewing habits,“ LG Ad Solutions global chief marketing officer Tony Marlow said. “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. This first shift was underpinned by subscription-based video content.

“The second big shift is underway right now,“ Marlow said. “Consumers are drifting away from some of their CTV subscriptions and increasingly preferring free content that is supported by ads. This presents an opportunity to provide better CTV experiences for viewers and opportunities for marketers to connect with their audiences on the biggest screen in the home.” 

The shift to streaming was rough on marketers, with more viewers spending time on ad-free services. The return to ad-supported viewing gives marketers a chance to reach consumers, particularly if they deliver relevant ads.

The survey found that 76% of consumers said they prefer ads relevant to their interests and 65% prefer ads relevant to the content they are watching. Streaming ads are more relevant than others, 49% of those surveyed said, and 36% say they pay more attention to the ads they see on streaming.

And the shift to streaming on CTV continues, with 21% of respondents saying they are watching less linear TV than a year ago.

LG Ads Solutions said it surveyed 770 U.S. consumers online in September for this study. ■

Jon Lafayette

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.