Disney+ launches in Europe, but traditional advertising ain’t going anywhere

You could call it the most conveniently timed launch of the year.

With a whole host of shuttered theme parks, stationary cruise liners and delayed cinema tentpoles, Disney’s stock price is down 43% thanks to COVID-19. But the silver lining? The German and European launch of Disney+, their big bet in the streaming wars, comes at a time when everyone is staying at home and is ready to binge-watch their favourite shows. In fact, the increase in streaming use in Europe during the COVID-19 crisis has led to the bandwidth for both Netflix and Disney+ being reduced, and the launch of Disney+ in France even being delayed! 

But here’s the caveat for advertisers: Disney+ doesn’t have ads. Zada. That’s despite their very own Hulu having some great success with ad sales. Seventy percent of Hulu’s subscribers – that’s 58 million viewers – are subscribed to the ad-supported tier. For their latest launch, with a low price at € 6.99 and no ads, Disney+ offers a hella lotta bang for its buck – and is set to be a success story without advertisers. Futuresource expects total European service subscriptions to exceed 10 million this year, bringing global Disney+ subscriptions to over 40 million. That’s not to mention ad-free Netflix’s end of 2019 total of 47.37 million happy subscribed EU streamers. Streaming fatigue? Not yet! 

But, despite all the doom mongering as Disney+ launches, traditional advertisers have no reason to freak out. Here’s why.

Need more info on creating or booking TV ads? Let’s chat! www.dcmn.com

TV advertising isn’t dying – but is performing better than ever

Watching TV is going up during the COVID-19 crisis

If you wanted any evidence TV advertising was still alive, look at the last two weeks in Germany. The COVID-19 crisis has seen TV ratings and reach go up, whilst price rates are going down. It’s a great opportunity for digital brands with smaller warchests. Here’s some hard evidence for this: according to our resident TV expert Sebastian Göritz, gross reach last week in Germany increased by 14% in comparison to the week before‪. That’s a year-on-year increase of 26% compared to the same period in 2019. There’s even more where that came from: The average viewing time per day in March 2020 increased by almost 30 minutes in comparison to March 2019, up to 4:30h from 4:01. In the UK, Saturday night’s edition of Saturday Night Takeaway, long a mainstay of TV schedules, received its highest overnight ratings since its launch in 2002. 

Eyeballs are firmly on TV right now, which is a veritable boon for advertisers. Still, don’t think this is a temporary aversion. Linear TV reach was still great in a pre-corona period for catching older, richer customers – and has a legitimacy and prestige that other forms of advertising, notably the noise of social media, cannot claim. It’s more easily trackable, as our previous look into the linear TV vs OTT proved. And it has great ROI to boost: a study of 2000 campaigns in the UK by Thinkbox, the trade body for TV, claimed a return on investment of £4.20 over three years for each £1 spent.

A final note must be made about live TV. Yes, live sports and events aren’t a focus right now with the lockdown – on the sports side EURO 2020 and the Olympics have just been postponed, with the Eurovision Song Contest on hold on the entertainment side. But after the crisis has abated, expect live events to be back with a vengeance. Look at this year’s Super Bowl, the holy grail for TV advertisers, which this year had its first ratings increase in five years – with a staggering average viewership of 102 million across platforms. In general, especially for older audiences – and during big live events, everybody – traditional TV is still a player in the game.

And there’s other ways for traditional advertisers to get involved…

Alongside TV advertising, what about AVOD?

Let’s be honest: the SVOD (subscription video on demand) space is getting crowded. It could also be a great time to focus on AVOD (advertising video on demand), where you can make shorter, hyper-focused ads for a more niche audience than TV. There have been some moves: Viacom recently bought AVOD platform Pluto TV, whilst Amazon launched its own AVOD platform called Freedive (via IMDb) last year. There’s lots of potential to gather data via these platforms, all of which can then increase your ROI in an increasingly personalised streaming space.

Hulu has an ad-supported tier that is worth following. They agreed last year to limit ad breaks to 90 seconds and to make sure the same ads are not repeated again and again. That’s not all: they also introduced a new binge-watch ad format, allowing brands to target viewers who are watching multiple episodes of a show in a row. The ad would be both relevant to their situation and their viewing behaviour. Perhaps a snack or a drink – fancy a cup of tea? – would then be advertised during a short break.

The key point? AVOD platforms are a media channel to keep an eye on as it could be an opportunity to reach target audiences with a whole new level of content quality and relevancy.

Product placement: Go inside the content, rather than around it

Netflix has many product placement agreements with brands

If you can’t advertise and you are keen on grabbing the attention of the valuable 18-49 demographic, then product placement is an organic way to move forward. With an advert it’s possible to turn the volume down online or switch TV channels, whilst actually watching a TV show requires concentration. By integrating products into the storylines of shows and film, you’ve firmly caught their attention without distracting from the main purpose.

Check out Coca-Cola, who’ve made a big splash with their product placement efforts for many years, but in particular made a big splash with their effort on Netflix’s behemoth Stranger Things. Their most prominent addition to the show was incorporating their notorious New Coke recipe from the 80’s into the storyline of the show, playing on one of the most dramatic stories in their corporate history. They weren’t alone in making a trip to the Upside Down: over 75 companies last year had promotional agreements with Netflix, including the likes of H&M and Baskin-Robbins.

The possibilities for the future are endless, particularly for e-commerce advertisers. Imagine if you could see click-through options for products that characters are wearing or using on the show? 

So, even if streamers don’t offer traditional advertising slots, think about potential collaborations. Here’s what we think: streaming isn’t killing advertising, but is opening up a newer, fresher, more audience-friendly future. Bring it on.

Fancy trying a new advertising game? Talk to us for the right media strategy for your brand in this omnichannel day and age. Write to us on hello@dcmn.com!

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