• by Wayne Friedman , February 21, 2024

The outlook for linear TV and connected TV continues to be an “unsettled ad market,” according to Bernstein Research.

Roku's recent earnings call with analysts provided a similar outlook and estimates.

After interviewing a major media agency buyer -- one that oversees a total $500 million media budget in annual linear TV and CTV --  Bernstein came to a similar conclusion.

More granularly, Bernstein sees linear video ad spending trending down and “slightly up to flat in streaming,” according to Laurent Yoon, media analyst for Bernstein, in a recent report.

A major factor is the entry of Amazon Prime Video into the market with its advertising option, which it believes will accelerate the decline in overall cost per thousand viewers (CPM pricing). 

But the full effect of this move will not really be felt until the 2024-2025 upfront season. Initial reports estimated the Amazon Prime Video ad-option being priced around mid-to-low $30 CPMs. 

For the fourth quarter, CTV cost per thousand viewers were estimated to have dropped by 60% to $21.73 versus $35.06 in the year-ago period, largely attributable to cheaper prices for FAST channels' ad inventory.

Looking specifically at other individual streaming media-selling company activities, Bernstein says that although Netflix remains the biggest untapped opportunity for advertisers, it continues to move slowly.

Although the market is projected to be flat, Bernstein says demand-side media platform The Trade Desk, is gaining share because it is perceived to be the “Switzerland of buying platforms.” 

In addition, the media buyer interviewed by Bernstein sees YouTube being increasingly accepted among media buyers, and also believes that Roku's ad-inventory aggregator platform is of lesser value.

Bernstein says the media agency-buying executive sees a shift in terms to around a 60% linear TV share to 40% for CTV. It had been around 80% (linear)/20% (CTV) over recent years.

The report says whatever significant 2024 ad revenue growth to come is centered “more around digital dollars, instead of CTV or linear.”

Continuing what other video media buying and selling executives have said, linear TV is still important but connected TV (CTV) platforms are key for extending reach.