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The Streaming Wars are upon us. Who will win? Digital ad spending offers clues

December 16 2019
Screen Shot 2019-12-16 at 11.35.02 AM
Screen Shot 2019-12-16 at 11.35.02 AM

The launch of Disney+ and Apple TV+ last month upped the ante for the streaming wars that have traditionally been dominated by Hulu, Netflix, and Amazon Prime Video. Disney+ racked up more than 10 million subscribers in its first twenty-four hours, making the early predictions that Apple TV+ would gain 10 million users in its first year seem a little cringe-worthy. Apple TV+ hasn’t released their subscription numbers, but we have to admit we’re skeptical anyone can compete with Baby Yoda.

 

(via GIPHY)

At least for now, anyway. An article in Time points out that these new streaming entrants are two of “the richest, most powerful corporations in the world,” and we have yet to see how they will experiment with content and subscription models in the coming years. We do know that both Disney+ and Apple TV+ have spent millions of dollars on ads, so let’s see how they used digital advertising to help launch their new services.

Timelines and Formats

First, it’s interesting to note exactly how much Disney+ is outspending Apple TV+ on digital advertising. Disney has invested in $57.2M for Disney+, while Apple has spent only $16.3M on Apple Plus. This disparity may have a lot to do with each platform’s library: in addition to what we know as “Disney movies,” Disney also owns all the Star Wars movies, Marvel, Pixar, 20th Century Fox, and National Geographic, while Apple’s catalog is limited to a handful of original shows.

Perhaps to generate steady buzz for the programming they do have, Apple TV+ started advertising sooner than Disney+. Apple TV ads started appearing in March with desktop video. Mobile video advertising began in mid-July, and Twitter, mobile display, and desktop display in mid-August. Considering all of their Twitter ads have videos, it looks like Apple is counting on enticing viewers with clips from their new shows.

Disney+ took a completely different approach, both with timeline and formats. They started advertising on mobile display, Twitter, and Facebook in mid-July, adding desktop display in August. Opposite to Apple Plus’s approach, Disney+ rolled out video ads last, with desktop video in September and mobile video in October. 

Where the Ads Are

Streaming Wars advertiser comparison

Apple Plus is not advertising on Facebook at all, which is typical for Apple, whereas Disney+ is devoting 66% of their ad spend to Facebook. Apple 

Plus is focusing on desktop video (47%) and mobile video (27%), with 64% percent of their entire spend made up of YouTube ads. As we mentioned in a recent New York Times article, “Apple is also advertising the service with companies that have competing streaming platforms, such as Hulu and NBC.” Disney, which owns Hulu, is running ads on Hulu, and is making

good use of its portfolio of properties by allocating significant ad spend to ESPN.com, Disney.com, and Babble.com. After Facebook, the two websites that are getting most of the Disney+ ad dollars are YouTube and Yahoo.

How do the new streaming services compare to the streaming titans – Netflix, Amazon Prime Video, and Hulu? The Disney+ ad mix is far more 

similar to Netflix’s strategy than it is to Hulu’s strategy. Looking at Disney+ and Netflix side-by-side, the proportion of investment in each ad format is nearly identical (see chart below). In the same chart, we also notice how similar Prime Video is to Hulu, and how much Apple TV +  has broken the mold relative to the rest of the group. Not surprising for Apple, when you think of the innovative approach they have taken with marketing and advertising for decades now, and the fact that they have routinely avoided Facebook ads over the past several years.

Threats to the Leaders

We examined data from Hulu, Netflix, and Prime Video to see if their advertising changed as the new services were about to go live. Hulu’s spend for September spiked at $15M after only $6M in August, and tapered off to $9.8M in October and $7.6M in November. Netflix had a similar August spend – $6.3M – and also increased in September ($9.2M) and October ($11.6M) and decreased in November ($10.7M). Hulu’s highest-performing creative for their peak months was a spot celebrating their Emmy-nominated shows, while Netflix allocated most of their assets to a “try Netflix for 30 days free” promotion. 

Perhaps Hulu, not worried about “competing” with their parent company Disney, was simply trying to elevate and differentiate their brand by touting their high-quality programming. Meanwhile, Netflix’s push to increase their subscription base could indicate a push to capture additional market share before the launch of the two new streaming contenders.

In contrast, Prime Video spending barely changed from August through November, maintaining a steady $5M per month. Amazon’s top creatives overall during this period reflect their diverse array of offerings: back-to-school supplies, gift cards, Audible, Fire TV, and Amazon Fresh.

Trends to Watch

While Disney is outspending Apple by 3.5x and seems to be taking a page out of Netflix’s strategy, we’re keeping our eye on how Apple is bucking these trends. Their focus on video-based ad formats and the substantial lead time they used to introduce Apple+ could very well generate enough brand awareness to make their lack of Facebook ads a moot point. 

In the meantime, Netflix and Hulu’s digital ad strategies show that they are well aware of the competition they’re up against. Amazon seems to be undeterred for now – perhaps related to the fact that streaming is just one of many offerings from the brand – but we’ll see if they change their mind as time goes on. Stay tuned for the next episode of Streaming Wars!

Learn More

As the media and entertainment landscape evolves, Pathmatics Explorer can help you understand advertising habits of hundreds of brands. Schedule a custom insights session to see how insight on your industry can help you rise above your competitors. 

About Author

Sarah Fleishman

With almost a decade of experience across digital marketing, content, creative, and PR, Sarah is a creative and dynamic thinker who loves to delight clients with unique and relatable content. Sarah graduated from UC Berkeley with a BA in Sociology.

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