Last month, CBD beauty label Lord Jones debuted its first advertising campaign, featuring a 30-second video of an Egyptian queen pretending to play dead so she can take a relaxing bath with Lord Jones products.
The campaign will appear in out-of-home ads and in commercials across linear — traditional network and cable — television, but Lord Jones was particularly keen to allocate money to a rising spot for advertisers: streaming networks. The brand bought ads on streaming apps that feature programming from HGTV and CNN.
“A lot of CBD brands have stepped into the mix since 2018,” said Summer Frein, the general manager of Cronos, Lord Jones’ parent company. “This is us levelling up and being in a place where a lot of brands don’t have the ability to be.”
Lord Jones is joining a growing list of fashion and beauty brands, including Stitch Fix, The RealReal, Eos and Dollar Shave Club, who are investing in streaming ads as it’s increasingly where they can reach their target audience. Platforms like Hulu, Roku, Disney+ and Amazon Prime, as well as those launched by traditional TV networks like NBC and CBS, spiked nearly 20 percent in viewership during the pandemic, according to media metrics agency Ocean Media. More “cord-cutters” are eschewing cable for cost-effective streaming content; over 40 million homes in the US stream their entertainment and watch about 117 hours a month.
The rise of the streaming wars has prompted a rush of advertisers experimenting with the platforms. The hope is that these ads will reach new audiences and also convert the ones they’re already targeting on social media. The difference is that streaming advertising is still a relatively uncrowded space in comparison to the saturated world of social media marketing.
Ads on streaming platforms are a long-tail strategy that will not yield instant purchases.
“Linear TV is just one screen, but this is laptops, hand-held devices, gaming consoles, iPads, phone, it’s a lot of ways to reach next-generation consumers on multiple devices,” said Deena Bahri, chief marketing officer at StockX, which buys streaming ads on Roku and Twitch. “And then you close the loop with retargeting ads and it becomes a really powerful opportunity.”
Though it’s still a nascent market, it likely won’t stay that way for long: experts say brands should be buying streaming ads before the market gets crowded. And when they do, brands must also understand that streaming ads are better used as a tool for brand-building rather than customer acquisition.
“This is not going to be a one-for-one, ad-to-conversion metric,” said Natalee Geldert, senior director of brand media and partnerships at digital advertising agency PMG. “Ads on streaming platforms are a long-tail strategy that will not yield instant purchases. They are more of an educational conversation.”
The Strengths — and Weaknesses— of Streaming Ads
The streaming audience is big and getting bigger: some 76 percent of American homes subscribe to at least one paid streaming service, according to Deloitte. Covid boosted that number; a 2021 Verizon survey found that 47 percent of American adults subscribed to a new streaming service during the pandemic.
“Netflix set the bar pretty high with critically-acclaimed content and now we’ve reached peak TV with the number of originally-scripted shows on streaming platforms,” said Brad Adgate, an advertising industry consultant. “Advertisers are following the eyeballs.”
Rebecca Traverzo, the vice president of marketing at ThirdLove said the company bought ads for the Hulu shows “Little Fires Everywhere” and “Mrs. America,” and saw a near-30 percent uptick in website traffic when those ads aired. Advertising on the platform, Traverzo said, allowed ThirdLove to buy ads with the goal of appearing in “contextually relevant places,” rather than going by demographics, as is the case with linear television.
“We said we wanted to be in shows that have women in front of the storyline or are directed by women,” she said. “It’s much more efficient for being intentional about where the ads go and who they go to.”
Traverzo added that streaming ads eliminate the “thumb-stopping” element of advertising on social media. “People streaming are captive and quite literally sitting there, watching,” she said. “They’re fully immersed so there’s a better chance to do real storytelling.”
People streaming are captive and quite literally sitting there, watching. They’re fully immersed so there’s a better chance to do real storytelling.
Bahri said StockX sees the ads as necessary for an evolved digital marketing strategy, particularly as new privacy laws could change advertising targeting this year. Advertising on streaming and social media allows brands to reach the same demographics in different places.
“Social platforms have a lot of power and changes they roll out can impact your economics, so you can’t be reliant on one channel,” she said.
But like social networks, streaming services still have kinks. Adgate noted that viewers get easily frustrated by the format’s tendency to play the same ads, as compared to cable TV, which presents a mix of brands’ commercials. Frein of Lord Jones, however, said she views the repetition as a plus because “consumers seeing the same ad will have more motivation to make a purchase.”
Brands also don’t get the same type of data they have with social media, with relatively limited audience information besides its size. Linear television also regularly shares demographics and viewership information while platforms like Netflix are typically secretive with their ratings.
And even then, streaming is a fragmented market. While the space has tens of millions of eyeballs, they’re spread across platforms and programs, while linear television still offers giant national primetime events like the Oscars.
Even with all the cord-cutting, many cable networks have about twice the viewers that streaming platforms do.
“There’s no Super Bowl of streaming,” he said. “Even with all the cord-cutting, many cable networks have about twice the viewers that streaming platforms do.”
Storytelling Over Product-Selling
Brands looking to enter the streaming ad game should determine what they’re hoping to get out of them, said Geldert. Because “conversion functionality is limited,” the ads are best used as a tool for brand awareness, rather than customer acquisition.
Bryson Alley, the visual effects lead at ad agency Harmon Brothers said brands should use their spots for storytelling instead of selling product.
“There’s no link to click here, so you have to make the story as memorable and as intriguing as possible so they want to go look up the site,” Alley said. “People are watching shows because they want to be entertained and they will look somewhere else during the ad unless you keep them engaged.”
People are watching shows because they want to be entertained and they will look somewhere else during the ad unless you keep them engaged.
Bahri said StockX has treated the ads as a place to explain its value propositions as a company.
“Historically, we were focused on a product, followed by a call to action. But with recent campaigns on Roku, we’re able to show more range,” said Bahri. “We talk styling and authentication and let them know they can leave the work to us.”
Frein said Lord Jones wanted to translate the prestige of its beauty brand to streaming audiences. To do so, it incorporated ASMR touches like heavy-breathing and the sprinkling sounds of its products so viewers would feel an emotional connection to its products.
“We wanted to capture the moment of this transformative bath experience,” she said. “These have to be ads consumers won’t get tired of and will make you feel a certain way. It should help people understand the brand and excite them.”