Streaming advertising has come a long way. Since the advent of pre-roll ads on YouTube to the addition of ad breaks on large streaming platforms like Netflix, advertisers have climbed on board a new opportunity to capture audiences’ imaginations.
Beginning in 2019 with the launch of Disney+, the “streaming wars” captured the attention of TV producers and audiences everywhere. Now, forecasters have dubbed 2024 the start of the ad-supported streaming war and advertisers are on the edge of their seats – anxious to see which platforms and strategies will win the battle.
But how did streaming advertising get to where it is today?
The start of streaming advertising
Streaming advertising started in 1941, believe it or not. Since streaming comes from the linear TV tradition, its origin is the same, an ad slot
In the early 1940s, only 4000 TVs sat in New York City homes. On those TV sets, during a Brooklyn Dodgers and Philidelphia Phillies game, the first ever commercial aired. The 10-second ad for the Bulova Watch Company took a coveted place before the first pitch and dazzled audiences with a simple, unmoving image and a straightforward voice-over: “America runs on Bulova Time.” This simple ad changed TV and advertising forever.
Ad formats evolved over the years. From prime time slots to high-profile sponsorships – advertisers have spent the decades learning to leverage audience attention at every interval. Now, over eighty years later, linear TV and CTV ad spending is projected to reach $100 billion by the end of 2027 in the US alone.
Now, streaming aims to replace linear TV in most homes. With Over-the-top (OTT) and Connected TV (CTV) taking over, advertisers are once again evolving to reach audiences how and where it is most effective.
How streaming advertising got where it is today
Linear TV was the king of commercial advertising for the majority of the 20th century and well into the 2000s. When digital advertising first came onto the scene, the linear TV market held onto its foothold, but with CTV and OTT platforms climbing to prominence, advertisers are switching their allegiances.
In 2023, the ad industry saw significant growth, particularly CTV. Global revenue for CTV reached $25 billion that year, and forecasters predict this expansion to continue. Projections show CTV ad spending will reach almost $29.29 billion in 2024 and will climb to $36.86 billion by 2026. The streaming market is booming.
Streaming giants like Netflix and Amazon Prime aren’t new, but they are growing rapidly. Notably, during the early 2020s subscription-based video-on-demand platforms saw a massive spike in growth. While this rate of growth hasn’t continued, the platforms haven’t seen a decline either. Audiences are sticking with streaming.
Netflix and Amazon Prime are also leading the way in ad-supported streaming, building their future growth on ad-supported subscription tiers. Netflix first launched its ad tier in 2022 and Prime followed in 2024, starting an era some are calling the “ad-supported streaming war.” Advertisers should be excited by the competition, one that could lead to better product development or lower prices.
Interestingly, Prime has raised the stakes in this “war,” automatically entering existing Prime subscribers into its ad-supported tier. This gives Amazon an estimated ad-supported audience of 115 million out the gate and puts it at the top of the streaming ad market alongside Hulu, which has accumulated over 115 million ad-supported viewers.
Streaming advertising is predicted to increase in popularity as more and more audiences cut the chord and transition away from linear TV. Advertisers looking to get ahead are already leveraging CTV and OTT to reach potential customers and those who aren’t soon will be.
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