“It’s tough to make predictions, especially about the future.” -- Yogi Berra
When I heard former long-time Publicis visionary and de facto ad industry guru Rishad Tobaccowala make one of his boldest predictions five years ago -- that the ability of advertisers to reach consumers with their ads would decline by 30% or more by 2023 -- I made an entry in my Google calendar to check back five years later.
“We will increasingly have less and less advertising,” Tobaccowala said in February 2018 during a keynote conversation at CIMM’s (Coalition for Innovative Media Measurement) Cross-Platform Media Measurement & Data Summit in New York City.
He went on to predict that the supply of consumer ad exposure could decline “30% or more” in the next five years as consumers increasingly bypassed ad-supported media options in favor of subscription-based services such as Netflix.
(During the session, Tobaccowala also predicted Netflix would never adopt an advertising model, which it actually did five years after his prediction.)
So what actually happened to the supply of consumer time spent with ad-supported media over that five-year period? I checked, utilizing media industry economist PQ Media’s historical database -- and guess what, it has increased, not decreased, over the five-year period. And it’s still growing -- at least for now.
In the U.S., the supply of consumer minutes spent with ad-supported media actually increased 18% between 2018 and 2023. Worldwide, it rose just under 1%.
Looking forward, PQ President and CEO Patrick Quinn forecasts consumer time spent with ad-supported media will continue to expand until 2024 in the U.S. and until 2025, at which point it will begin to dip.
Five years after making his bold prediction, Tobaccowala no longer considers himself part of the ad business, and has moved on to a book and newsletter publishing, and public-speaking career.
He published his first book, “Restoring the Soul of Business,” and already has an advance from McGraw-Hill to publish a second one. And while he didn’t tell me what that one is about, I’m sure it will be as well-read and influential as his first one, because Tobaccowala is a gifted speaker and writer and knows how to put things in perspective, even if the future doesn’t always live up to his predictions.
About that, here’s what he had to say about going out on a limb like that five years ago:
“I believe the point I was making were the following and maybe you can see if the data today supports it:
“a) It would be harder to reach people using television as 1) people left linear for streaming; 2) streaming would have far fewer commercial breaks and;
“b) As a result advertising on video and in good environments would be far more expensive.”
Tobaccowala also qualified his earlier remarks noting, in retrospect, that “it was not a broad statement on all of advertising and in reality now that everything from email to Substack are being monetized.”
Ironically, he concluded by noting that his own Substack newsletter, “which is read by 25,000 folks, including hundreds of CEOs” is not monetized. Which I think means that it’s really just a form of advertising for promoting Tobaccowala’s public speaking gigs and books, albeit not a form of paid advertising.
So in a way, a lot of these stats come down to how you define what advertising is, pre- or post- any predictions you want to make about its future.
Or, as Tobaccowala notes in his most recent newsletter posting ("The Futures Does Not Fit In The Containers Of The Past"), the future is also "elastic."
Apparently, so is the past.
And that makes me wonder what Yogi would say?
Joe, as they say, the Devil is in the details.
I thought I'd compare the PQ Media U.S. time spent projections with the results from TVB's just released GFK "Media Comparisons Study", which asked adults how they spent their media day, "yesterday" and broke out the results for a large number of ad-free and ad-supported media. Now this is based on a sample of adults, not everyone aged 2+, so that's a small point of difference. And not every type of digital media was included. However, when I add up the totals I get just over 9 hours hours in the 2023 GFK study----or roughly 550 minutes daily. Of this "linear TV" was about 330 minutes, ad-supported streaming 85 minutes hours, radio 56 minutes, print media---printed and digital--about 40 minutes, TV/ radio news websites 30 mintues and podcasts 10 minutes. And this is not including streaming audio at 19 minutes, social media which garnered 63 minutes in the GFK study or email activity---59 minutes.
I'm not necessarily defending the MRI study, nor am I challenging the stats in the PQ Media study. And even if one accepted the GFK results as gospel we would have to lower the linear TV and radio figures slightly to account for exposure to ad-free sources like PBS or National Public Radio. On the othher hand, we would have to include social media as well as streaming audio and those venues of digital display advertising not included in the study.
As it happens, we have conducted our own analysis and we come very close to the 9 hours per day figure for ad-supported media for adult consumers. This does not mean that we are estimating the amount of time spent with the ads, themselves, when we say that 9 hours per day seems about right. We've also done that calculation for our MDI Direct subscribers and the figure is both eye opening and much smaller.
So my question is this. Does the PQ Media analysis limit itself to only certain media or are there assumptions---like multi-taking---- in the projections that explain the difference between 9 hours per day and the reported 6 hours daily estimate?
Joe, think it's important to take into account ad loads. For every hour of ad supported TV that moves from linear to streaming, the amount of ads goes down somewhere between 50% and 75%. Also, Nielsen data says that, at least in terms of time spent on the TV glass, that Rishad is right. Overall time spent is flat, linear down, streaming up, a large chunk of streaming being ad free.
@Howard Shimmel: The PQ Media data takes ad loads into account. It's measuring the total supply of consumer time spent with ad-supported media, not just on TV glass. But there are likely many ways of looking at it.
That said, you think the supply of consumer time spent on ad supported TV glass has gone down 30% or more in the past five years? That would be worth noting too.
To Howard's point, ten years ago Nielsen was reporting that linear TV attained about five hours of viewing per day per TV home resident---most ( 90-95% ) of this being ad-supported. Now the linear TV figure is around three hours per day and ad-supported streaming has taken one hour per day while SVOD gets another hour. In total, it's still roughly five hours per day only the amount that is ad-supported is down by 20%. So "TV" is down. Certainly there has been no gain in radio and print media is dying a slow death so that's out. Which leaves us guessing---is it podcasts or video games or social media, or digital video or something else that is filling the void---and, more to the point, fueling the "increase"? That's question one.
The second question concerns the extent of ad-suppported media usage. If the six hours per day estimate for ad-supported media is accurate and we compare this with the oft-cited report that "we" average something like 11-12 hours a day with the media, then there's an awful lot of ad-free media exposure out there---but its not linear TV, radio, print media and streaming exposue. So what is it? Is digital media ad blocking the culprit---maybe---but not five hours per day per person. It can't be out of home---can it?
As for taking into account the extent of the ad loads for each medium, how would that be done? If the average adult spends one hour a day with streaming AVOD and/or FAST services does the fact that these services average 25 % ad clutter per hour while linear TV's norn is closer to 33% alter the time spent with the platform number?Certainly the six hours per day figure does not refer to time spent watching, listening to or readng ad messages---does it? If that was the case we would be devoting 15-18 hours per day to non-ad content on the same media--and that would just be an average. The heavy user quintile would be hit with ads 12-15 hours per day while devouring non-ad content at double or triple that rate.
PQ Media executives have been preparing ad-supported vs. consumer-supported usage comparisons for more than 25 years. It includes media multitasking and our data closely matched the data that Mike Bloxham and his team uncovered at Ball State University in the mid-2000s, which has accelerated with the introductions of the computer tablet and smartphone. We include all ages, not just 12+ or 18+. Our data looks at all consumer-facitng media platforms (TV, Radio, Newspaers, Magazines, Books, Movies, Recorded Music, Pure-Play Internet, Pure-Play Mobile, Videogames, and Out-of-Home Media), as well as many of the channels within those platforms, such as broadcast TV, pay TV, DVRs, VOD/PPV, and streaming video in television. In preparing the ad-supported vs. consumer-supported, the criterion used is whether that medium generated more revenue from advertising & marketing or from end users. And that line is blurring, particularly as circulation spending is catching up to ad spending in print media, and pure-play digital ad & marketing spend, like search, are closing the gap with access spend. What one has to remember is that the heaviest users of media are older demographics that continue to use the linear media they grew up with, and which expanded during the pandemic.
Thanks for that clarification, Leo. It's what I recall from past discussions on this subject. The point that you are making---as I understand it---- is whether a particular platform is over 50% ad-supported or not---and if it is not, all of its usage falls into the ad-free or non-ad-supported category. My problem with this is not so much about how you do it ---that's fine with me---but how the information is interpreted---or mis-interpreted ---unless the reader understands how the platforms are defined. For example, a few years ago most streaming usage was to non-ad supported services---Netflix, etc.---so all of streaming, including ROKU, and other FAST services would have been classified as not-ad supported---even though a portion of the usage was ad-supported. I assume that now, all of streaming will be classified as ad-supported due to the advent of Peacock, Paramount +, etc. etc plus many more FASTs as well as new AVOD services by the likes of Netflix, Disney and others. Yet about 45% of streaming usage is still ad-free.
Unless a person understands that PQ Media is not saying that consumers average only six hours per day with media that carry ads, but, rather, that consumers spend six hours a day with platforms where ad revenues are the major source of income,many may think that the supply of total advertising GRPs is what is being discussed. This is not the case as there is plenty of other usage of platforms which carry ads---often lots of them---but where the sellers also garner a major share of their total income from other sources---subscription fees, carriage fees, etc. Our own analysis at MDI Direct is based on ad-supported media usage regardless of how the service ----or platform---- earns its total revenues. What we have found is that there have been shifts from one platform to another---like in "TV"---but that , overall, the trend lines are fairly flat over the past few years.