Commentary
Legacy TV Network Streamers' Real Future Competition: Non-Video Digital Media Business
- by Wayne Friedman , Staff Writer, January 4, 2023
Traditional TV companies are a long way from competing with the digital advertising dollars -- especially considering the battle to compete with two mega digital media giants -- Google and Meta Platforms. But one chart seems to suggest there is some movement.
In 2017, Google/Meta had a commanding 50% market share when it comes to U.S. digital advertising spend --- something which has slowly declined to around 48.4% of, according to Axios.
A chart also shows that "streaming” companies’ share would be estimated to be around 8%. This group includes the usual suspects -- Hulu, Roku, Pluto, and Tubi.
This also includes tangential “streamers” -- not quite among the legacy TV-video content providers such as TikTok, Spotify, Pandora, iHeartMedia.
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TikTok could be a big piece in this group. By itself it is expected to earn $8.6 billion by 2024.
The bigger question is where legacy TV companies sit among their share of U.S. digital media revenues -- which could include streaming, CTV and associated website revenues. At best, it might just account for perhaps 3% to 5% of that overall U.S. digital advertising total.
Categories are not all that important. But trends for legacy media moving more fully into the digital space will be important to follow in the coming years.
Consider also the likes of Disney+ and Netflix as just starting their efforts around ad-supported options.
Estimates are over the next couple of years they will take more share. But all will be tougher and slower moving as they compete with other media.
In the “e-commerce” category, for example -- which includes Amazon, Walmart, eBay, and Etsy -- this comprises just under a 20% share of all U.S. digital ad dollars. By itself, Amazon is estimated to secure 12.7% share of the U.S. digital market by 2024.
In addition, the likes of Google and Facebook have done what they could -- through various video-centric businesses including YouTube and Reels, respectively -- to siphon away TV advertising dollars.
Well into the future, legacy TV companies might consist of more non-video-centric digital media players.
So legacy TV companies in the very long term might look for ways to find ways to return the favor.
Can they make further digital media advertising gains in some non-video media?
Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.
Wayne, traditional TV time sellers are not competing with digital "giants" like Google and FB---or "Meta"---- for most of the latters' ad dollars. Indeed TV time sellers---both "linear" and streaming--- capture the lion's share of the ad spend for most national branding campaigns---like 55-65% and in many cases more. Most of the ad total spend stats for Google and FB are for search or DR ads and many are for small local/regional advertisers who would love to be on TV---but haven't got the money or staffing/servicing expertise to do so.
The same point applies to "e-commerce". The "TV "networks---"linear" or streaming draw their ad revenues primarily---like 90-95%---from the branding budgets. Even if the same advertisers are involved in "e-commerce" it's not the same people nor their media spending budgets---"e-commerce" is usually handled by the sales or sales promotion folks. When they use agencies, these uaually are specialist shops, not the ones who devise the branding campaigns and buy media for them.
In my opinion, one of the mistakes that Netflix made some years ago, when it dismissed the idea of launching an ad-supported AVOD service, was the assumption---as stated by Reed Hastings--- that he didn't want to compete with the same digital "giants"---Google and FB---for ad dollars. This was probably based on seeing the ad revenue charts of the time which showed the digital "giants" garnering far more ad dollars than the "linear TV" networks. He was dead wrong. His real competition would have been ABC, CBS< NBC, Fox, etc. not Google or FB.