The retired slogan still rings in our ears.

HBO elevated original content before it was cool.

But for years, brands couldn’t take advantage of the company’s massive audiences. This changed last year.

HBO Max entered the advertising-based video on demand (AVOD) landscape. 

With its content, limited advertising and affordable pricing, HBO is trying to take on the biggest players: Netflix and Disney+. 

But unlike these other leading OTT platforms, HBO Max has advertising spots that can help media planners and brands get in front of targeted audiences.

Which industries are taking advantage of this advertising channel? And which brands leverage the platform most?

HBO Max wants to be favorite among consumers and brands

In June of 2021, HBO Max released an ad-supported video on demand (AVOD) tier that allows users to access the full library of HBO content, DC Films, Warner Bros movies and more for $10 per month. 

The platform is home to popular shows like Friends, Doctor Who, Rick and Morty and Watchmen. 

In an even more unconventional move, Warner Bros, belonging to WarnerMedia, which is part of AT&T, released their films like Wonder Woman 1984 and Dune on the same day they were released in theaters. (Ad-tier subscribers had to wait over the following months to stream the films.)

This upset the entertainment industry—but was great for consumers and HBO Max.

Plus, with only four minutes of ads per hour, HBO Max promised to keep ads to a minimum. 

Unlike other key AVOD platforms, HBO Max didn’t limit its inventory to select partners. It opened up spots to the entire marketplace. 

HBO Max subscriber numbers are obscure due to the fact that cable subscribers with traditional HBO have access to HBO Max for free, as well as AT&T customers with select plans. Currently, there are about 73.8 million global users with access to HBO and HBO Max. This number will surely grow as WarnerMedia completes its merger with Discovery. 

What does HBO Max promise advertisers?

Viewers have long loved HBO, but what about advertisers?

After all, the channel is new to advertising sales.

“HBO has previously been a walled-off garden for the last 50 years,” said Julian Franco, vice president of product management at HBO Max. “Stories are better received if you limit the disruptions during them.”

In line with its history of fan-obsession, HBO promises to “put consumers at the center—where every ad product is designed to lean into their interests and behaviors and drive engagement for your brand.”

HBO does this with a proprietary ad model that allows brands to optimize engagement with relevant audiences. 

The platform offers brands a “brand block,” in which “brands own a block of content and consumers delight in a limited commercial experience.” This is also referred to as a brand takeover. 

The company offers brands access to their in-house studio for custom creative assets. Having the genius talent behind HBO as a creative partner could be a great investment for certain brands.

HBO Max is determined to find the right balance between consumer desire for less ads and brands’ desire for maximum engagement. It has significantly less ad space than competitors—roughly half that of Hulu. 

But less time doesn’t necessarily translate to less impact. True to tradition, HBO is seeking to capture quality over quantity. 

Which brands have already started experimenting with this premium channel?

MediaRadar Insights on HBO Max

MediaRadar started tracking* HBO Max advertising soon after its launch, on July 1, 2021.

In 2021, after its launch, the platform had over 410 advertisers.

Financial & Insurance brands represent 19% of HBO Max advertising volume. This is around 2-3 times more than other leading OTT platforms.

Media also makes up a significant 19%, while Retail spending isn’t too far behind. Retail brands made up 14% of advertising dollars on this channel. 

Top Advertisers:

• State Farm is one of HBO Max’s top advertisers. Their ads are driving the Finance category.
• Marriott leverages HBO Max’s audience to advertise it’s Marriott Bonvoy loyalty program.

Ad Analysis

• HBO Max carries the lightest ad load in the industry, along with Peacock. This may be a strategic way to win-over subscribers with a better viewing experience, but also to win advertisers—promising brands a less cluttered space to get their message out.
• Nearly half of HBO Max’s ads are 15 seconds, ⅓ are 30 seconds and the remaining are 5 to 10 seconds.

Though the inventory is small—HBO Max partners with brands to make sure it is an effective use of their investment with the brand block strategy. 

Is HBO Max the right fit for your ad dollars?

AVOD is still a new channel—and HBO Max is one of the youngest competitors. But with its rich tradition of award-winning content and a dedicated fan following, it’s arguably one of the strongest contenders for a brand’s ad dollars. 

The platform trails behind ad-free Netflix and Disney+ in number of subscribers, but is ahead of other AVOD platforms like Hulu and Peacock. (The caveat being that the current number of customers watching ads on the platform hasn’t been announced publicly.) 

When we zoom out, OTT spending still pales in comparison to TV ad dollars even though time spent streaming is on the rise.

Americans spend nearly half of their total viewing hours on streaming, but by 2024, PwC analysts predict that U.S. advertisers will only be spending 8% of their budgets on the channel. Put another way, AdAge says that only $5.6 billion of the $71.6 billion TV dollars would be put towards OTT. 

This means that brands have a great opportunity to become some of the leading partners in OTT. MediaRadar can give you insights on which brands are already jumping in—and where. 

See where your competitors are spending, how much and what creative they are using. Use these insights to build your next campaign strategy. HBO Max might be at the top of your list. 

For more insights on the streaming market, stay tuned for our OTT Trend Report coming out soon.

*A Note on Methodology: Overall, MediaRadar’s data covers both standalone streaming platforms and TV Anywhere viewing from top linear networks. Standalone streaming services are sampled from the ad-supported streaming packages, across profiles in the 18-34 and 35-49 TV demos.

The player moving quickest these days is AT&T, owner of HBO Max. 

AT&T’s been working towards a merger between WarnerMedia and Discovery to create a new $150 billion content unit, Warner Bros. Discovery. And it launched HBO Max’s ad-supported tier earlier this month.

This is all against the backdrop of increasing competition among streaming platforms. We’re not referring to the number of players in the market—those days are gone. Instead we’re talking about their ability to meet consumers’ expectations of higher quality and fewer ads than linear TV, while delivering for advertisers. 

OTT was largely an experiment for brands last year when we looked at how many brands were on OTT but not TV. But HBO Max is doing its own thing, which might impact which brands buy on OTT instead of TV.

Why the HBO Max With Ads matters in the AVOD landscape

HBO Max has 10,000 hours of premium content to rival other AVOD contenders like Peacock and Hulu. Content ranges from HBO original content, Warner Bros. Studios films, Turner Classic Movies, DC’s Extended Universe and more. 

Between household TV series to some of the most recognizable movie titles of all time, HBO Max has a staggering amount of content. 

HBO Max currently has slightly more paid subscribers than Peacock and Hulu each (around 42 million). But its M&A activity, international expansion plans and new ad tier signal that it’s aggressively trying to scale to the size of Disney+ or potentially Netflix. By 2025 AT&T believes HBO Max will have over 120 million subscribers. 

But, unlike Netflix and Disney+, it offers a AVOD tier with “a commitment to the lowest commercial ad load in the streaming industry.” 

HBO Max is making OTT ad purchasing more accessible, but inventory is limited

HBO Max isn’t only contending for the best ad experience for consumers. It’s opening up options for more advertisers. 

At first glance, it wouldn’t seem like it with its limited inventory. 

HBO Max’s ad-supported tier limits inventory to four-minutes of ads per hour of showtime, roughly half that of Hulu’s, which could be five minutes per a half-hour show. 

This “elegant” ad model is still slightly unclear to buyers, but the streaming service isn’t making exclusive deals with large sponsors (when Peacock went live, it had ten exclusive partners). 

Instead, they’re open to the entire marketplace.

“They are actively going in a completely different direction,” said one media buyer to Adage. Others noted that upfront commitments were fairly modest. 

Though the details remain unclear, it seems that HBO Max is selling to a more diverse set of partners than early AVOD businesses. (The irony here is that HBO via cable doesn’t sell ads aside from their content… it’s hard work to keep up with networks these days.)

This makes us wonder how this will impact the number of brands who advertise on both TV networks and their corresponding streaming service and how this new channel will impact the brands that exclusively advertise on OTT.  

MediaRadar Insights

Streaming services are in a race to the fewest amount of ads of streaming. At the same time audiences are adding more streaming to their viewing diet.

This makes us ask how much ad inventory does that leave for brands? And how does TV ad spending compare to OTT?

While streaming viewership is increasing, we’re nowhere close to the fall of TV advertising.

• In 2021 so far, there’ve been 3,500 advertisers who’ve spent $369mm on OTT.
• 47% of those advertisers have also spent on television. While these advertisers spent $313mm in OTT from January to May, they also spent $16.7 billion in TV over the same period.
• From these advertisers using both formats, their spend in OTT accounts for 85% of all OTT spend, and their spend in TV accounts for 73% of spend from January – May 2021.

Brands who don’t spend on television spent $55.8mm in OTT from January to May 2021.

• These brands include traditionally large brands (think Boeing and Instacart), but a large majority of them are small brands (Brown’s Car Stores, Omega Engineering, Ziply Fiber).

The evolution of TV and streaming continues to unfold month-by-month. Premium advertising spots are opening up for more advertisers, but details are largely hazy when each service has its own processes and limited inventory options.

Need more OTT opportunities? Reach out to us for a free demo. Access data on brand spending, buying patterns and the key contacts you’d like to reach. 

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TV viewership rose in March and began to level off in April during stay-at-home orders. After months of watching cable TV, Netflix and Youtube, many viewers are excited for the new content HBO Max has to offer.

Some of the most anticipated content includes a Friends reunion special and the fabled “Snyder Cut” of Justice League.

In March, when the crisis hit, we covered how digital streaming ads surged due to stay-at-home orders. We wanted to check back in to see what’s going on in light of this new launch. 

We encourage you to subscribe to our blog for the latest data surrounding the advertising industry. We will provide daily updates as COVID-19 continues to make its mark on the US economy.

HBO Max Enters the Streaming Wars

HBO will now have three products: HBO Max, HBO Now and HBO Go. They will all coexist at the same time, at least for now. 

Here’s a simple break down:

• HBO Go: If you have HBO via cable or satellite, this is the app that lets you watch HBO on other devices.
• HBO Now: This is the HBO app for people without cable who want to watch HBO content.
• HBO Max: This is like HBO Now, but amped up. It will include old hits, plus new exclusive and original content. 

HBO Now will continue, but customers will be paying the same price for less content. Many HBO customers will be automatically upgraded to HBO Max, but the details are still hazy.

While some agreements are still unfolding, HBO Max has many distribution partners set in place before the launch. 

“Through our expansive distribution pipeline, millions of customers will have immediate access to a best-in-class streaming experience come May 27,” said president of WarnerMedia Distribution Rich Warren. Xbox, PlayStation, Cox, Verizon and Samsung are some of the largest partners to recently come on board. 

HBO Max will feature shows like Friends, The Big Bang Theory, South Park and original movies. It will also feature new kid-friendly shows, like a talk show hosted by Sesame Street’s Elmo. 

Some of HBO’s own employees have doubted this new move, wondering if it will tarnish HBO’s brand marked by pushing TV boundaries. Leaders are not concerned.

“We’re going to have Tiffany aisles within a larger store,” HBO Max boss Kevin Reilly said. The original content on HBO Max is designed to complement, rather than replicate HBO.

HBO doesn’t own the edgy and high-quality corner of media any more. Competitors like Netflix, Amazon and Hulu make similar content. In response, HBO seems to be widening its audience reach by creating lighter shows and movies. There will be over 10,000 hours of content, so viewers probably don’t have to worry about finding something suitable to their interests. 

MediaRadar Insights

Since March, there has been no explicit change in creative among streaming service advertisers, though there has been an increase in spend. 

Spending has remained higher and only boosted by the launch of Quibi and HBO Max in recent weeks. The increase can be seen even more clearly when we look at year-over-year data. 

Spend was already higher due to increased competition like Disney+, and with COVID has only risen higher.

One interesting note is that spending from Quibi has fallen off since its launch. Over the last 4 weeks, its average weekly spend has been down 82% compared to the 4 weeks prior (4/19 – 5/16 vs. 3/22 – 4/18).

When we check in on the major players, this is what we see:

• Netflix has not shifted advertising amid the pandemic or the new competition.

• Disney (making up Disney+ & Hulu) has upped spending amid the pandemic. Their average weekly spend since the week of 3/15 has been 74% higher than the weeks prior (excluding their Oscars ads).

• Amazon prime video has upped their ad spending in recent weeks. Spending the week of 5/10 is nearly double where it was the week of 4/19.

• HBO Max began advertising week of 4/19. But their spend really began the week of 5/10 (it was more than triple where it was just the week prior). We expect a large push right around their launch.

Aside from the drop from Quibi, it seems that the advertising competition between most streaming services has intensified. We will continue to watch the advertising approaches of these brands as HBO Max launches and people start relaxing their social distancing behaviors.  

For more updates like this, stay tuned. Subscribe to our blog for more updates on coronavirus and its mark on the economy.