Research: Substantial waste poured into linear TV ads
May 11, 2022
Samba TV, a provider of omniscreen data and analytics, has released its State of Viewership Report for Q1 2022, showing a complex viewership landscape in the US marked by a saturated linear TV ad market, increased cord-shaving, and a high likelihood for streaming subscriber churn.
“With $68 billion (€64.5bn) poured into linear advertising every year, the substantial waste taking place in this sector should be a wake-up call to advertisers,” said Samba TV CEO and co-founder Ashwin Navin. “The reality that 94 per cent of linear ad impressions in Q1 only reached just over 50 per cent of audiences demonstrates the dramatic need for a flexible approach to ad spend and the imperative of leveraging guaranteed incremental reach opportunities to effectively maximise ROI.”
Samba TV’s quarterly State of Viewership Report provides a comprehensive overview of television, movie, Connected TV (CTV), and advertising viewership. As the Upfronts and midterm elections heat up advertising spend, key insights on trends and movements in audience viewership consumption, including how to reach liberal and conservative audiences as well as millennials, Gen Z, and Hispanic households provide timely strategies for advertisers. Samba TV’s report sheds further light on changes in television viewership, including:
Majority of Linear Ad Impressions Oversaturate the Same Half of TV viewers: Samba TV’s comprehensive insights uncovered substantial saturation and waste across linear with 94 per cent of all ad impressions reaching just 55 per cent of audiences. These same audiences saw an average of 144 linear ads per day, while 45 per cent of American households saw only 11 ads per day. While it improved by 3 per ent since Q4 2021, this dramatic imbalance suggests that linear campaigns are still reaching the same viewers over and over again while leaving the rest of Americans unexposed to messaging. With little opportunity to reach new viewers via linear, advertisers need to look to guaranteed incremental reach opportunities to maximize spend across devices and platforms.
Cord-Shaving is on the Rise: Although the average percentage of households watching linear each day remained at approximately 50 per cent, the rate of cord-shaving accelerated by more than 20 per cent year-over-year. This dramatic rate of cord-shaving is even more severe across millennial households where one in four watched less than one hour of linear per week.
An SVoD Ceiling Comes into View: SVoD consumption remains on the rise, as Samba TV data shows that just 59 per cent of SVoD-viewing households watched more than one service in Q1 2022. However, less than a quarter of households watched four or more SVoD services in the quarter, showing there is a point beyond which consumers are not willing to spend.
SVoDs Risk Churn with Limited Stickiness: More than half of Hulu, HBO Max, and Prime Video’s top programme viewers watched just one programme among the streamer’s top 50 shows during Q1 2022. With viewers only tuning in to one new buzzy movie or show, providers risk ‘cyclers’ hopping between platforms and canceling subscriptions. This risk of subscription churn is paramount as the attention recession grows, highlighting the necessity of streamers to constantly innovate their content and driving acquisition and retention programmes designed to deepen streamer engagement.
Advertisers are Missing Key Demographics on Linear: Top advertisers over-index among white and Black viewers but aren’t reaching Hispanic and Asian audiences at a proportional rate. Meanwhile, each of the top 10 advertisers on linear served a disproportionately low number of impressions to audiences below the age of 44.
“From the consumer viewership landscape shifting further toward streaming to major advertisers breaking legacy molds to select currency-grade measurement partners, the industry has undergone several shifts over the past quarter. Despite the consumer flocking to streaming, these platforms face substantial challenges in maintaining growth and retaining subscribers. This quarter’s State of Viewership Report underscores the distinct challenge advertisers are facing in their quest to reach fresh and diverse audiences across devices,” Navin concluded.