Is Streaming Killing the TV Ad Star? Recent Studies Say 'No'

Is Streaming Killing the TV Ad Star? Recent Studies Say 'No'

News by Vianca Meyer
Published: October 24, 2023

A recent report from Statista underscores a point that may surprise digital enthusiasts: Television remains the dominant advertising medium in the United States.

Even in an era proliferated by digital channels, the classic TV set holds its ground as the go-to platform for advertisers.

Shifting Landscapes in TV Ads

However, as media dynamics shift, the nature of TV advertising is undergoing notable changes.

Brian Wieser, principal at Madison and Wall, recently told The Hollywood Reporter about the decreasing amount of TV advertising viewers will be exposed to in the coming years due to the rise of streaming services and connected TVs.

His forecast suggests that time spent with advertising on a TV set, which includes streaming content and connected TVs, could plummet by 24% in the U.S. between 2023 and 2027.

Despite this decline, he emphasizes that linear TV will "for now, nonetheless remain the primary source of ad inventory," with many streaming platforms continuing to favor ad-free or limited ad formats due to consumer preference.

Streaming's Impact on Traditional TV

Wieser's insights provide a comprehensive understanding of the industry's trajectory.

He mentions that "consumers of the many SVOD services generally want to choose ad-free options... given the lack of desirability of advertising in the on-demand world that accounts for most of streaming video."

This sentiment finds reflection in other parts of the market.

For instance, while a reduction in TV ad time is anticipated by 2027, the overall hours of TV consumption, including platforms like YouTube and other uses such as video games, are predicted to remain steady.

It's clear the landscape is evolving, and advertisers need to adjust their strategies.

A key takeaway from Wieser's projections is the permanent nature of low ad loads on streaming platforms and the commonality of low penetration rates of ad tiers on many services.

As he eloquently puts it, in an on-demand world, the choice to consume content is highly intentional, making advertising a potential interruption that is less tolerated.

Don't Write Off Traditional TV Just Yet

However, linear TV isn't going anywhere soon.

By 2027, Wieser predicts that linear TV will still house "more than three-quarters of the medium’s total available inventory."  

Advertisers are also likely to shift their focus from traditional demographics to "advanced audiences" as younger viewers, especially those aged 18-49, increasingly turn to streaming. 

While the path of TV advertising is set for some changes, its role as a top medium for ads in the U.S. remains uncontested for now.  

As streaming services evolve and consumers' habits shift, advertisers and marketers are posed with the exciting challenge of navigating this dynamic landscape, ensuring that their messages are effectively delivered to their desired audiences.

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