Running traditional ads on streaming services like Disney+, Netflix and Amazon can be difficult. Some advertisers may choose a different route by creating some of the programming those broadband services use to get people to subscribe in the first place.
A new study from Interpublic Group’s Magna media-research unit and Amazon Ads found that consumers don’t seem overly concerned whether a TV show they watch is created by an advertiser or a more traditional production studio, so long as the content is entertaining. When asked why they chose to watch brand-funded entertainment, 59% of respondents said they found the show “fun to watch” while 45% “enjoyed the content” and 34% “‘earned something new.”
The findings may lend new hope to Madison Avenue, which finds itself with one of its main avenues of promotion — TV advertising — reaching fewer people, while many streaming services run significantly fewer ads, and, in many cases, none at all. Even those premium services that have started to run commercials — NBCUniversal’s Peacock and Warner Bros. Discovery’s HBO Max among them — only stream a few minutes’ worth per hour, fearful of antagonizing consumers who move to streaming to escape the commercial interruptions that are a bedrock piece of the economic architecture of traditional TV.
Some marketers have already found a path to streaming venues. In February, tech player HP Inc. released “Unlocked,” a “mini-movie” made for Peacock that was centered around a team of data scientists trying to unlock great mysteries of the world. Nike helped produce “The Day Sports Stood Still,” a film about the effect of the coronavirus pandemic on sports, for HBO and HBO Max that debuted last year.
When people discovered a marketer was involved in the creation of a program that proved entertaining, “most people said it improved their opinion of the brand or the TV show,” says Manatt. “That’s something that really surprised us.”
Advertisers aren’t just discovering the power of making their own content now. Madison Avenue has been at this for a while. PepsiCo in 2021 worked with Fox to craft a game show, “Cherries Wild,” and wove a plotline into the Fox drama “Empire” in 2015 that extended from an episode of the show into one of its commercial breaks. KFC recently created a short vignette that told a soapy story about Col. Harland Sanders — in the vein of a Lifetime movie (the ad aired on Lifetime).
The difference? On TV, many of these extravagant pitches appear during commercial breaks, or have to be carefully placed in a show so as not to interrupt the viewing experience. The streaming programs that advertisers create stand as choices alongside other dramas, series and specials.
“You can’t think about it as a brand. You just have to think about it as entertainment that happens to be financed by a brand,” says Brendan Gaul, , global chief content officer of Mediabrands, the media division of Interpublic Group.
According to the study, viewers prefer the brand-funded content to traditional commercials. are accepting of brand-funded entertainment vs. traditional commercials. And they indicated the advertiser-built programs spurred them to shop for the products related to them. More than half said they felt frustration when trying to purchase a product seen in a TV show, opening an avenue for advertisers to consider better ways to pair e-commerce options with streaming projects. NBCUniversal has already dipped its toes in these waters, and it’s easy to see why Amazon, a backer of the study, would be interested in such technology as well.
“It’s just like any other content,” says Kara Manatt, executive vice president of intelligence solutions at Magna, in an interview. “People watch it when it’s entertaining, and if it’s not entertaining, they won’t watch it.”