Commentary

Streaming, CTV CPMs Under Pressure As New Ad Options Expand

by Wayne Friedman , Staff Writer, April 25, 2024

As competitors ramp up their advertising video-on-demand (AVOD) options for their streaming/digital platforms, growing connected TV inventory is expected to “outpace demand near term,” says Bernstein Research.

This will result in continued downward pricing “adding deflationary pressure on eCPM [effective cost per thousand pricing] in the foreseeable future,” writes Laurent …

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1 comment about "Streaming, CTV CPMs Under Pressure As New Ad Options Expand".

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Ed Papazian from Media Dynamics Inc, April 25, 2024 at 9:16 a.m.
Wayne, the advent of FASTs on CTV, which have little choice but to specialize in lower cost "non-premium" fare, has been driving CPMs down at a fairly heady pace. While CPMs for "premium" content sellers like Netflix---despite its very small coverage base---and some others--- remain fairly high---they, too, have had to lower their CPMs to compete with linear TV and with eachother.

When all of the options from the top 10 or 15 sellers who account for most of the national GRPs available via streaming are combined we expect to see a fairly substantial CPM reduction in the impending upfront compared to last year. This will diminish the value of anticipated higher CTV ad spending---but that's what we have expected all along. There are too many sellers and not enough premium content GRPs to justify charging so much more than linear TV per viewer. This is especially so as the average CTV viewer does not pay more attention to CTV commercials than his/her linear TV counterpart and CTV viewers, while somewhat younger are not so heavily concentrated in the light viewing upper income groups to justify higher CPMs for some advertisers.

The solution, of course, will be for CTV sellers to increase their commercial clutter----to compoensate for CPM reductions. But that will be a major part of next year's story.
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