Commentary

Limited Ad-Supported CTV Helping Lower TV Screen Ads? Yes, But...

Less advertising on your TV screen? Is that what is really coming for TV viewers? It depends.

A recent study from GroupM says it expects average TV and video advertising hours seen by U.S. audiences to decline 17% by 2028 -- pegged to an extent to rising limited advertising streaming options.

This comes as streamers look to pull in more consumers into ad-supported options — in order to raise revenues that give streaming platforms not just higher subscription fees, but more advertising revenues per subscriber.

Overall deals are cheap for consumers (for example, $10 a month for a Netflix/Max ad-supported combo on Verizon.) At the same time, analysts believe the rising two-pronged revenue approach will hasten streamers' path to profitability.

To be sure, subscription, no-advertising option price hikes will still be a thing — and some of this may not be all that visible to consumers.

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Big mobile/communication phone companies like AT&T, Verizon, and T-Mobile regularly offer free, long-term promotional streaming subscriptions in mobile/home broadband bundles.

And while some areas may see advertising exposure declines, what about live, linear TV sports content?

GroupM says sports accounted for 23.5% of total national TV viewing hours among U.S. consumers ages 18-49 this year — up from just 14.1% in 2018. So that area could see rising ad-exposure.

This year, GroupM says, traditional TV spending will sink 10.7% to $45.7 billion, with connected TV advertising climbing 14.8% to $16.6 billion in 2024. The latter will now have 26.6% share of TV ad dollars. 

Live, linear sports TV content still has high advertising loads, especially for the NFL. Post-season games — including, of course, Super Bowl-related TV advertising — keep growing. 

For sure, the big championship game gets huge engagement results, including those big Super Bowl parties where friends and family can gawk, laugh, or utter disparaging remarks in response to some ad creative.

Still even leaving sports out of the picture, on linear TV, there is plenty of ad-glutted messaging on mid-sized cable TV networks.

Sure, we may see less advertising on NCIS on Paramount+, for example, but we’ll always have a celebrity-sponsored Doritos ad to admire in a big NFL game, or plenty of Burger King, Hershey’s and Verizon Wireless ads on MTV to wrap our heads around and to consider.

1 comment about "Limited Ad-Supported CTV Helping Lower TV Screen Ads? Yes, But...".
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  1. Ed Papazian from Media Dynamics Inc, December 6, 2023 at 5:43 p.m.

    Wayne, the advent of CTV services such as Netflix which in the main do not carry ads has, indeed reduced the amount of time consumers devote to ad-supported TV. Whether this trend will continue with so many AVODs and FASTs springing up is a matter for speculation ---but let's say that Group M's prediction is correct. The question then remains will the degree of commercialization in ad-supported TV remain the same---with CTV services offering many fewer commercials per hour than linearTV as an enticement to subscribers and/or users?Or will both platforms---and especially the streamers----  increase their commercial loads, thereby creating replacement GRPs to sell to advertisers?

    With ad attentiveness banned from the TV rating services by the sellers, time buyers will simply assume that the extra GRPs have the same value as those they are  now buying---even though this may not be the case. And the sellers will, no doubt, also raise their CPMs. Which means that "TV"---linear plus CTV---will still provide the needed advertiser GRPs even if the amount of time people spend with ad-suppported TV declines by 17% ---as GroupM predicts. And the sellers will get the ad revenues they need also.

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About the Author

Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.