Connected TV Looks To Maintain 'Shiny New Thing' Status

Want some hope in an otherwise questionable TV marketplace with a probable recession to come -- at least for streamers?

Just look at the viewing time spent on streaming versus the share of advertising money going to streamers.

In the second quarter, Nielsen says, 50.2% of adult 18-49 viewers devoted their TV time to streaming. But only 22% of overall TV advertising money will go to streaming this year, according to eMarketer.

According to other estimates, total traditional TV advertising annual spend is at $70 billion to $80 billion, with connected TV ad spend at $21.2 billion this year, according to the IAB.

Closing the gap for all advertising-video-on-demand TV businesses is the goal for all types of platforms: Big premium ad options (Peacock, Paramount+, for example) as well as digital firsts operators (YouTube, Roku, Amazon Fire TV).



This all comes to light amidst warnings of a probable TV and media advertising slowdown -- as cited by Roku in its recent shareholder letter. And it's not surprising that Roku offered up this more positive viewing time and ad-spend disparity, on that note.

But detractors will point out many issues including continued limited inventory availability on big popular streaming platforms owned by legacy TV network-owned media companies. Think of ad options at Peacock, Paramount+, HBO Max, as well as the coming Disney+ and Netflix.

There are also major issues due to the lack of industry standards when it comes to third-party measurers, frequency concerns, and continued advertising fraud.

One can believe then major brand marketers have the right approach when it comes to shifting traditional TV dollars to all kinds of AVOD services. That is, go slow.

Also consider those big bulk AVOD services -- those with limited high-profile, glitzy, critic-worthy TV content: Tubi, Pluto TV, and The Roku Channel. Those might be a proving ground of sorts in the hope of higher viewing trends -- especially when it comes to offering more ad availability.

And did we forget the most important initial point of concern for marketers? The media cost -- at least for a lot of premium content -- remains too high relative to linear TV.

Meanwhile, big premium streaming platforms continue to post significant losses. Peacock, for example, will lose $2.5 billion this year.

So what happens now when we are likely to enter a major business and consumer slowdown? Think about rubber and the road. And watch out for braking... or breaking.

1 comment about "Connected TV Looks To Maintain 'Shiny New Thing' Status".
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  1. Ed Papazian from Media Dynamics Inc, August 2, 2022 at 10:30 a.m.

    Wayne, there is no reason why streaming's viewing share of viewing among adults aged 18-49 should have any bearing on streaming's share of TV ad spend. For one reason, adults aged 18-49 and its sister "demo", adults aged 25-54, are not  targeting metrics. These are merely umbrella audience tonnage guarantee "demos" and have little to do with how brands actually target consumers.

    In addition more than half of streaming activity is attracted by services that do not take ads and finally, the amount of ad clutter---hence GRPs--- on many streaming platforms is considerably lower than on linear TV. Put these factors together, plus other issues that still plague streaming's ad carriers, and it's not surprising that the total viewing time stats for streaming do not match the way ad dollars are currently being allocated between the two types of TV access. 

    Eventually I expect this situation to change---but  only when the various streaming ad sellers capture a larger share of the viewing pie, increase their commercial clutter loads and deal realistically with problems like fraud, poor ad scheduling practices, lack of a single independent audience source, etc.

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