Q3 CTV Ad Spend Grew 39% YOY
by Frankie Karrer
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The COVID-19 epidemic saw an increase in viewership for linear TV, but those numbers have dropped - leaving advertisers to look to Connected TV
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AdAge recently published their list of the most expensive shows on network television, and of the 80 returning shows they track, 38 of them saw price increases for their ad inventory. Prices remained the same for 22, while only 21 saw prices fall.
Here’s the top 10 priciest shows from that list (based on a 30 second spot):
75% of the top network shows either rose in price or stayed the same for the upcoming 2020-2021 season, which is actually a bit surprising. These price increases come on the back of years of price declines for major networks’ top shows, coinciding with linear television’s declines in viewership. Per Nielsen, broadcast networks saw a 20% drop in viewership in 2019 vs. 2014, with an even steeper drop (35%) among adults aged 18-49.
The COVID-19 epidemic changed the narrative though. TV viewership spiked dramatically for both linear and Connected TV in 2020 thanks to stay-at-home orders. More Americans stayed home and tuned in—which seems to have reversed the fortunes for the network TV ad business.
Thus, the money has started pouring in. But will it last? Or did advertisers overpay for 2021? The numbers seem to suggest that’s the case for traditional linear television.
The uptick seen in the early days of COVID-19 seems not to have stuck for linear TV. Research analysis of Nielsen data showed a decrease of 15% to 20% in July versus the same time last year, despite a 5% increase in March and April.
The return of sports surprisingly hasn’t helped viewership either, with every single major sports league posting double digit ratings losses versus 2019. Both the NBA Finals and the World Series reported some of the worst ratings in their history. That doesn’t bode too well for the advertisers who spent big on the NFL.
Linear TV may be falling back down to pre-COVID levels (or even worse), but Connected TV has consolidated its gains. Time spent streaming by viewers has continued to outpace last year’s numbers by significant margins, with Nielsen reporting a 74% increase year over year.
So what does this mean for advertisers? Is linear TV’s decline bad news? Not so—in fact it’s looking to be a net gain as Connected TV rises to prominence.
Don’t let those massive price tags up top fool you. Advertisers may be eager to shell out big budgets for linear TV ad buys now, but this year’s price increases will most likely be an outlier. The viewership trends just aren’t in its favor any longer, and it’s likely we’ll see linear TV’s ad buys return to the mean and continue their decline.
Connected TV’s strength, meanwhile, isn’t just limited to its increase in viewership. It offers a better advertising solution than linear television. It functions more like a digital ad channel, complete with advanced audience targeting and accurate measurement.
Both of these are absolutely critical for advertisers in today’s uncertain climate, where revenue matters more than ever. Ad impressions can’t be wasted en masse on uninterested viewers, and advertisers can’t deploy campaigns without some sort of assurance they’re generating the desired results. CTV ads deliver both of those needs, while linear television cannot.
Advertisers looking to reach their audience, even those who are watching the top 10 network shows, can do so on Connected TV. Of the top 10 priciest ad buys on linear, everything except Sunday night football is available on ad-supported streaming services. And these audiences can be reached far more efficiently on streaming television, and at a much lower cost per impression.
That’s because it operates on an audience-first targeting approach. That means:
And there’s not a drop off on content quality, either. MNTN Performance TV, our Connected TV ad solution, offers Living Room Quality inventory which ensures ads are only served on top-tier streaming networks. This approach ensures advertisers maintain the prestige of TV advertising, but with a far more efficient spend.
That efficiency is monitored via reporting capabilities that offer the same metrics found in digital advertising.
eMarketer estimates ad spend on Connected TV will reach $10.81B by next year, and we expect that number to climb even higher. And as more viewers make the switch to streaming, more advertisers will follow suit and drive that number even higher.
Interested in learning more? Schedule a demo of Performance TV and we’ll run you through everything you can do on Connected TV.