Marketers spent a total of $75.8 billion over the first three quarters of 2018 -- the most ever on record.
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Marketers spent a total of $75.8 billion over the first three quarters of 2018 -- the most ever on record.
Digital video streaming services continue to boost national TV advertising spending -- 16% higher this summer than a year ago. Just over $115 million was spent from May through August 29, according to iSpot.tv. National TV ad spending was $99.5 million for the same period a year ago. This year, AT&T’s DirecTV Now -- a virtual digital pay TV provider -- spent $25.8 million over this period. Subscription video-on-demand (SVOD) provider Hulu was next at $20.2 million. Disney’s Sling TV was at $18.3 million, while Amazon Prime Video came in at $17.1 million. Netflix, the overwhelming SVOD leader in terms of revenue and subscribers, spent $10.6 million. YouTube TV, its virtual pay TV service, spent $7.1 million.
According to a new study from comScore and Google, digital video advertising and search advertising can drive increased tune-in to live sports. In particular, “last-minute” ads (defined as ads within six hours of a game’s start time) drove a 26% higher likelihood of tune-in of those viewers that were targeted. Frequency also saw a correlation, with households that saw four or more ads before the event 37% more likely to tune-in compared to viewers that only saw one ad. "To achieve maximum tune-in, campaigns should consider working to build up frequency over the course of their flight, but also try to hit the right viewers with at least one ad within six hours of the event start time,” the report suggests.
Although Netflix is not ad-supported and has nothing to do with TV marketers, the subscription video service is having an major effect on other networks’ TV advertising, according to a report. An analysis in nScreenMedia estimates Netflix has taken anywhere from $3 billion to $6 billion per year off the table in TV advertising revenue as a result of the viewing on its platform. In the past, such viewing would have gone to ad-supported TV networks. The report from digital media analyst Colin Dixon says the average U.S. Netflix subscriber misses out on seeing around thirty-five 30-second commercials per day. Looking at all of Netflix’s U.S. subscribers, this comes to nearly 2 billion ad views per day. In a year, the average Netflix U.S. subscriber misses 5,753 ads during prime-time viewing and 7,032 ads during non-prime time. This analysis considers third-quarter 2017 results of 56.4 million Netflix streaming U.S. subscribers. Using the approximate cost-per-thousand viewer of $18 in prime time, and $5 for non-prime time programming, the report says these missed ad views have a value of $139 per year per subscriber, or $7.6 billion for all subscribers. This research suggests Netflix viewing has removed between 4% and 8% of total U.S. TV advertising, which in 2017 totaled $72 billion, per eMarketer. Dixon cautions: “This analysis assumes Netflix viewing replaces only ad-supported television viewing. It doesn’t consider ad-skipping through DVRs, though Nielsen says the average U.S. adult only spends about 10% of TV viewing time on DVRs.” He adds: “It also doesn’t consider the use of premium video networks like HBO and Showtime. These factors could lower the calculated value of lost ads by 15% to 20%.”
