Member Exclusive   //   May 22, 2024

CMO Strategies: A guide to ad-supported streaming services, from the top platforms to marketing spend

This is the first installment in Modern Retail’s 2024 CMO Strategies series that analyzes key marketer strategies and challenges across leading marketing channels, such as retail media, display advertising, social media and ad-supported streaming.

Streaming video continues to gain steam over linear TV, as Americans are tuning in to streaming platforms in record numbers. Streaming services accounted for 38.7% of total U.S. TV usage in July 2023, according to Nielsen — a new record high for the category. Just a year prior, streaming claimed the largest share of U.S. TV viewing for the first time

Meanwhile, cable and broadcast usage fell below 50% in July 2023 in terms of total share among U.S. viewers, Nielsen reported. Total broadcast viewing was down 3.6% to finish the month at 20% of TV, representing a new low. Cable viewing lost a full share point to capture 29.6% of TV usage in July.

Modern Retail surveyed 174 brand and agency professionals about their streaming platform preferences to ask which platforms receive the bulk of their ad budgets and ad placements. 

YouTube commands the majority of ad placements

YouTube, with the largest audience reach of all the platforms, came out on top as the platform that received the largest portion of both respondents’ ad placements and budget allocations. Three-quarters of brand and agency respondents (75%) said in Q1 2024 that they currently place ads on YouTube, a slight decrease from the 83% of respondents who said the same in Q1 2023. However, marketers’ YouTube budget allocation held steady year over year. More than half of respondents (60%) said YouTube consumed the largest portion of their budgets in 2023 and 2022.

YouTube likely came in first for ad placements and budget allocation mainly due to its audience reach. The platform has more than 2 billion monthly logged-in users, according to YouTube, which far outpaces other platforms. Nielsen’s February report on U.S. linear TV and streaming viewing showed that YouTube held the top spot in streaming for 12 consecutive months. 

While most ad-supported streaming platforms offer similar content in the form of on-demand movies and TV series, original movie and TV programming, and live TV channels, YouTube stands out as the only platform that offers user-generated content, which YouTube refers to as creator content. According to YouTube’s Albert, it is the platform’s wide breadth of this type of content that sets it apart from other streaming platforms. 

“Over the past three years, we’ve invested over $70 billion, paying over 3 million creators who are uploading over 500 hours of content every minute,” Albert said. “That ensures we have the most diverse content library available, which is going to appeal to anyone’s individual passions and interests, and that’s ultimately what’s driving the viewership numbers that you’re seeing.”

YouTube also has access to Google’s entire first-party search and browser history data due to its connection to Google’s demand-side platform (Display & Video 360), the dominant DSP in streaming and online advertising. Google, as the publisher of YouTube, can count its own user login data as its first-party data. First-party data reserves are increasingly a crucial selling point to attract advertisers, as deprecation of the third-party cookie slowly becomes a reality.

After YouTube, Amazon’s new ad-supported tier Prime Video (with ads) tied for second place with The Walt Disney Company’s Hulu when it came to ad placements, according to Modern Retail’s survey. More than a third of brands and agencies (36%) said that they placed ads on both Hulu and Prime Video, respectively, as of Q1 2024. Hulu also came in a distant second to YouTube when it came to ad budget allocation. Thirteen percent of brand and agency respondents said that they devoted the largest portion of their 2023 ad-supported streaming budget to Hulu (60% said the same of YouTube). 

To note, Prime Video (with ads) was excluded from our 2023 budget allocation analysis because Amazon did not launch the ad-supported tier until January 2024.

While neither Prime Video (with ads) nor Hulu have nearly the audience reach of YouTube, they each bring their own consumer audience and data benefits that appeal to advertisers. 

Prime Video’s entry into the streaming ad market raised the stakes on its rivals because Amazon automatically opted in Prime subscribers to the streaming platform’s ad-supported tier, a tactic that has enabled the e-commerce giant to report a monthly ad-supported audience of 200 million-plus monthly viewers. But it’s Amazon’s strength as a sales platform that gives it an added advantage over other streaming platforms due to the sheer volume of consumer data it collects. 

Amazon is the fourth-most visited website in the U.S. — behind Google, YouTube and Facebook — and it is the most visited e-commerce and shopping marketplace, according to web analytics company SimilarWeb. Due to the massive number of monthly visits to the site — 2.2 billion total visits worldwide in March 2024 alone — Amazon is able to collect data from a wide range of demographic groups with varied audience interests. That means Amazon can offer agencies and brands access to a massive amount of consumers, and their data. 

Similarly, because it is owned by Disney, Hulu has access to all of Disney’s first-party consumer data through the company’s Disney Select platform, which gives Hulu a similar competitive advantage in the race to provide advertisers with immense first-party data reserves. In general, streaming platforms that are owned by larger parent companies have an overall advantage when it comes to data access. Hulu also taps into Disney’s programmatic ad exchange dubbed DRAX (Disney RealTime Ad Exchange), in which buyers can bid on all Disney ad impressions — thereby appealing to advertisers on both a first-party data reserve basis and a programmatic basis. 

When it comes to audience size, Hulu has claimed more than 115 million ad-supported viewers, which would put it in league with Prime Video’s reported 200 million-plus viewers.

Matching up platforms to different advertiser needs

Based on what each platform told Modern Retail it offers advertisers (plus Modern Retail’s own research and reporting), and taking into consideration what brands and agencies shared as their greatest platform needs, we put together this quick guide on which platforms are right for campaigns that rely on some key advertiser demands:

If you’re an advertiser looking for:

  • Frequency capping
    • Hulu
    • Netflix Standard (with ads)
    • Peacock
    • The Roku Channel
    • Tubi
    • YouTube
  • Non-skippable ads
    • Discovery+
    • Hulu
      Max
    • Netflix Standard (with ads)
    • Peacock
    • The Roku Channel
    • Tubi
    • YouTube
  • Shorter ad breaks
    • Discovery+
    • Max
    • Netflix Standard (with ads)
    • Peacock
    • Tubi
    • YouTube
  • Pause ads
    • Netflix Standard (with ads)
    • Peacock
    • Max
    • Hulu
    • Tubi
    • YouTube
  • Shoppable ads
    • Hulu
    • Peacock
    • The Roku Channel
  • Content takeovers
    • Hulu
    • Peacock
    • The Roku Channel
    • Tubi
  • Deep first-party data reserves
    • Disney+ Basic (with ads)
    • Hulu
    • Peacock
    • YouTube