Streaming services can’t stop showing the same ad repeatedly, putting growth at risk

Audiences aren’t the only ones annoyed by seeing the same ads every time they tune into Hulu or Pluto TV. Advertisers are also fed up about the issue. Marketers are becoming so miffed that it may affect how much money they spend on streaming ads.

The issue of frequency management is a simple problem that lacks a straightforward solution. Advertisers know how many times someone may need to see an ad before they’re interested enough to purchase a product — and how many may be too many. But without a universal measurement system, advertisers cannot easily track their campaigns across various streaming properties to make sure that individual viewers are not overexposed to an ad. A fragmented streaming ad market has made the matter even more complicated.

“As supply has become fragmented in different ways, the ability for us to be able to deliver frequency management with any level of accuracy is incredibly difficult,” said Anthony Koziarski, chief media officer at PHD.

Managing how frequently streaming viewers are shown a company’s ad continues to be a struggle for advertisers. As the streaming ad market grows — in terms of ad dollars and ad sellers — so too does the issue of frequency management. The issue has not yet led advertisers to withhold ad dollars from streaming, according to agency execs. But it may jeopardize the money that will flow into the market as ad buyers find ways to minimize overexposures in order to avoid annoying audiences away from ad-supported programming altogether.

“I think there will be a tipping point in which case it could make the spend plateau,” said Samantha Rose, svp of advanced TV and video solutions at Horizon Media.

The many ways that advertisers can buy streaming inventory inflames the frequency management issue. It creates an environment in which an advertiser could run back-to-back ads within a given streaming service with each placement purchased from a different source.

“If you go seven different ways to buy your digital inventory, you’re potentially creating a frequency problem,” said Ed Gaffney, managing partner and director of implementation research at GroupM.

The simplest way to address the frequency management issue is for advertisers to simplify their buying processes by funneling deals through a single source, such as a demand-side platform that plugs into various streaming properties across various platforms. However, that’s unlikely to happen because it would give that seller too much power and there is no one company that can cover enough of the streaming market.

Advertisers are instead taking steps to corral where that money goes by coordinating ad buys across different ad sellers. For example, if an advertiser is buying a TV network’s Hulu inventory as part of a broader package and also buying ads directly from Hulu, it can ask Hulu to block the network’s shows from the Hulu ad buy. Additionally, advertisers can set frequency caps for each company from which they buy ads.

The problem advertisers face is capping frequency across different properties when buying ads through different sources. If an advertiser is running ads across Hulu, Pluto TV and YouTube, it could have each service cap the number of times individual viewers are shown its ad to four exposures per day. However, that could still lead to 12 views across the three services, which may exceed the advertiser’s desired overall frequency cap. “Unique user frequency, that’s the challenge,” said Rose.

PHD has concentrated on limiting audience overlap across the various inventory sources that it includes in an ad buy so that a small minority of viewers do not account for a larger majority of ad views. The agency has adopted a three-step process to flatten the frequency distribution for client’s campaigns.

First, PHD compiles a unified view of its audience’s viewing patterns across TV and digital through data collected by automated content recognition systems that track what people watch on smart TVs. The agency then uses that information to decide which properties can be included in an ad buy while minimizing audience duplication across those properties. Then it measures ad delivery on a daily basis to monitor exposures and whether they are remaining within the given advertiser’s specified frequency threshold. One client that has used this process saved at least 10% of their video ad budget, or “millions and millions” of dollars, according to Koziarski.

An ad seller may not have much incentive to prevent ads from running on its property just because the ad ran too many times on others’ properties. Ultimately it will be up to advertisers to force the change. “It’s our clients’ money. They are the ones who will dictate the change,” said Gaffney.

The issue has not yet led to significant changes in how advertisers spend that money because advertisers still need to sell their products and they see how the streaming audience is growing to help offset linear TV viewership declines, Gaffney said. At the same time, he said that ad buyers and ad sellers cannot afford to wait until it becomes a humongous problem, a sentiment echoed by others.

The more that viewers are overexposed to ads, the more likely they may be to act on their annoyance, such as by shifting their viewing to ad-free streamers or calling out advertisers on Twitter. “That’s what is going to change things,” Rose said.

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