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© 2016 eMarketer Inc. 1
eMarketer StatPack:The Evolving Landscape of US TV & Video Advertising and Consumption
Presented by
November 2016
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When video ad servers, DSPs, and/or site-serving publishers stream brand ads from their original source in our Video Asset Cloud, they play perfectly and precisely everywhere, on-time and according to plan.
© 2016 eMarketer Inc. 3
Overview
TV and video advertising are increasingly complementary
Digital adoption is proven out by time spent on media data
The sky isn't falling on TV advertising or content
Young adults are leading the charge toward digital
TV still owns mega-events...for now
eMarketer StatPack: The Evolving Landscape of US TV & Video Advertising and Consumption contains charts, key stats, trends and forecasts that you can keep at your fingertips all year long.
The StatPack is broken out into five sections:
© 2016 eMarketer Inc. 4
Multiplatform video advertising is the new normal.In the past year alone, the number of US marketers launching multiplatform campaigns skyrocketed, according to one study. This includes TV.
TV is still the place to launch video campaigns.Buyers generally prioritize TV over YouTube, Facebook and other digital/social channels.
Programmatic advertising is coming to TV, albeit slowly. Digital attracts a disproportionate share of programmatic ad dollars, but TV is gaining ground in this area.
TV ads are increasingly complementary to digital
© 2016 eMarketer Inc. 5
Growing numbers of advertisers run video campaigns across platforms, including TV
Source: Videology, 2015.
© 2016 eMarketer Inc. 6
TV is still the top place to launch a new video campaign, followed by YouTube
Source: Cowen and Company, 2016.
© 2016 eMarketer Inc. 7
The percentage of marketers who bought programmatic TV ads doubled in 2016
Video still leads in programmatic buying, but more TV advertising will become automated and targeted through programmatic methods
41%
81% 84%
13% 16%
32%
0%
30%
60%
90%
2014 2015 2016
Channels for Which US Marketers Buy Ads Programmatically (% of respondents)
Digital Video TV
Sources: Association of National Advertisers (ANA) and Forrester Consulting, 2016.
© 2016 eMarketer Inc. 8
The number of buyers using or planning to use programmatic TV ads has risen
29%
15%
22%
19%
0% 10% 20% 30% 40% 50%
2015
2014
Current and Planned Use of Programmatic for TV Advertising Among US Senior Ad Buyers (% of respondents)
Current Planned (Next Year)
Source: Cowen and Company, 2016.
© 2016 eMarketer Inc. 9
Live digital programming has longer and more ads per break than on-demand shows
13092
0 50 100 150 200
Average Digital Mid-Roll Ad Break Length During US Live vs. On-Demand Programming, Q4 2015 (seconds)
On-demand Live
6.23.7
0 2 4 6 8
Number of Digital Video Ads per Break During US Live vs. On-Demand Programming, Q4 2015
On-demand Live
Source: FreeWheel, 2016.
© 2016 eMarketer Inc. 10
Time spent with video data also points toward digital adoption
People still spend a great deal of time watching TV, but they’re increasingly shifting to digital platforms.Survey data on people’s future plans indicates these trends will persist.
TV is also losing its dominance as a news source.In this area, social media is exerting an especially strong countercurrent.
The share of ad spending on TV is higher than the share of time spent viewing TV. The opposite is true in digital video. This disconnect argues for the continued strength of TV as an ad medium, though it also suggests that a “correction” may be in order.
© 2016 eMarketer Inc. 11
Time spent with TV and other traditional media is declining, while digital time rises
4:38
3:584:10
5:56
1:32 1:24
0:40 0:27
0:00
1:12
2:24
3:36
4:48
6:00
7:12
2012 2013 2014 2015 2016 2017
Average Time Spent per Day with Major Media by US Adults, 2012-2017 (hrs:mins)
Digital
TV
Radio
© 2016 eMarketer Inc. 12
TV still leads in overall time spent, but usage is declining as digital gains
Source: Nielsen, 2016.
4:49
4:51
5:04
1:35
1:25
1:07
1:22
1:06
1:01
0:00 1:12 2:24 3:36 4:48 6:00 7:12 8:24
Q4 2015
Q4 2014
Q4 2013
Average Daily Time Spent with Select Media/Devices Among US Consumers (hrs:mins)
Live TV Apps/web onsmartphone
Internet on a desktop/laptop
© 2016 eMarketer Inc. 13
Streaming, time-shifted and VOD viewing are increasing at greater rates than live TV
Source: Forrester Consulting, 2016.
49%
66%
67%
73%
73%
23%
23%
21%
18%
20%
28%
10%
11%
9%
7%
0% 20% 40% 60% 80% 100%
Live TV
VOD
DVR
Streaming services
Streaming(network sites)
Expected Change in Consumer Time Spent Viewing Video According to US Advertising Professionals, by Type, Feb 2016 (% of respondents)
Increase Stay theSame
Decrease
© 2016 eMarketer Inc. 14
A staple of live TV, sports is the genre with the least amount of time-shifted viewing
Source: TiVo, 2016.
18%
35%
37%
41%
50%
56%
61%
64%
67%
68%
72%
0% 20% 40% 60% 80%
Sports event
Animated
Special
News magazine
Sitcom
Reality
Adventure
Action
Crime drama
Science fiction
Drama
US Time-Shifted TV Share During Primetime Viewing, by Genre, Q4 2015 (% of total)
© 2016 eMarketer Inc. 15
TV is also losing ground to social media as a primary source of news content
Source: Deloitte, 2016.
57%
42%
4%
17%17%
11%9%7%
0%
20%
40%
60%
2012 2013 2014 2015
Primary Source of News Content Among US Internet Users (% of respondents)
TV
Social Media
Digital News Sites (non-newspaper)
Newspaper Sites
Nonsocial digital media is also waning when it comes to serving news to US internet users
© 2016 eMarketer Inc. 16
TV ad share is greater than audience time share; the reverse is true for digital video
0%
10%
20%
30%
40%
2016 2017 2018
Share of Average Time Spent per Day with TV by US Adults vs. Share of US Total Media Ad Spending
TV Time Spent
TV Ad Share
0%
10%
20%
30%
40%
2016 2017 2018
Share of Average Time Spent per Day with Digital Video by US Adults vs. Share of US Total Media Ad Spending
Digital Video Time Spent
Digital Video Ad Share
© 2016 eMarketer Inc. 17
The sky isn’t falling on either TV advertising or content
TV is still a healthy medium. It leads other media in total ad spending and time spent viewing.
TV still owns mega-events. Live sports events like the NFL Super Bowl, the NCAA March Madness college basketball tournament and the MLB World Series attract more ad dollars than ever before. The same is true for the Olympics, awards shows and other high-profile programming.
Although TV remains strong, there are storm clouds on the horizon. Long-term trends are unfavorable to TV as we know it. The industry is in the middle of unprecedented disruption, and more changes are ahead.
© 2016 eMarketer Inc. 18
TV will continue to grow and remain the top video advertising format through 2020
$77.2
$70.6
$16.7
$9.8
$0 $20 $40 $60 $80 $100
2020
2016
US TV vs. Digital Video Ad Spending (billions)
TV Digital Video
© 2016 eMarketer Inc. 19
Digital video ad spending will grow at a faster pace than TV ad spend through 2020
2.5% 2.0% 2.5% 2.0% 2.5%
28.5%
19.2%
14.2%13.1%
10.2%
0%
5%
10%
15%
20%
25%
30%
2016 2017 2018 2019 2020
US TV vs. Digital Video Ad Spending Growth (% change)
TV
Digital Video
© 2016 eMarketer Inc. 20
Researchers disagree on the general direction of TV ad spending …
Sources: ZenithOptimedia and Pivotal Research Group, 2016.
$67.00$66.73
$67.14
$66.44
$65.90
$64.36
$64.94
$66.00
$67.05
$67.97
$63
$65
$67
$69
2014 2015 2016 2017 2018
Comparative Estimate: US TV Ad Spending, 2014-2018 (billions)
ZenithOptimedia
Pivotal Research Group
... but even those forecasting a downward curve predict moderate losses, not a freefall
© 2016 eMarketer Inc. 21
Digital ad spending on broadcast, cable and satellite TV properties will top $6B in 2016
This means that digital video advertising revenue also accrues to TV content owners. It’s not a zero-sum game.
Source: MyersBizNet, 2016.
Of the digital ad spending on TV-related properties, approximately 85% was video, according to MyersBizNet
© 2016 eMarketer Inc. 22
Video will be the second-fastest-growing digital ad format, after rich media
15.7%10.0%
0%
20%
40%
2016 2020US Video Ad Spending Growth (%
change)Digital Banner Ad Spending Growth
(% change)
36.4%
10.6%
0%
20%
40%
2016 2020Rich Media Ad Spending Growth
(% change)
28.5%
10.2%
0%
20%
40%
2016 2020Digital Video Ad Spending Growth
(% change)
10.2% 9.9%
0%
20%
40%
2016 2020Search Ad Spending Growth
(% change)
8.4% 5.5%
0%
20%
40%
2016 2020Email Ad Spending Growth
(% change)
5.5%4.0%
0%
20%
40%
2016 2020US Video Ad Spending Growth (%
change)Digital Sponsorship Ad Spending Growth
(% change)
© 2016 eMarketer Inc. 23
Mobile digital video ad spending will approach parity with desktop by 2020
$8.63
$5.60
$8.06
$4.24
$0 $3 $6 $9 $12 $15 $18
2020
2016
US Digital Video Ad Spending by Device (billions)
Desktop Mobile
© 2016 eMarketer Inc. 24
Digital’s share of media spending will grow, while TV and other traditional media shrink
27.4% 22.2%
35.8% 44.9%
36.8% 32.9%
0%
20%
40%
60%
80%
100%
2016 2017 2018 2019 2020
US TV vs. Digital Ad Spending as a Percent of Total Media Ad Spending
Digital
TV
Other Traditional Media
© 2016 eMarketer Inc. 25
Facebook and YouTube lead growth in video ad share; TV’s share is slipping
Source: Cowen and Company, 2016.
51.6%
54.5%
25.2%
24.6%
18.7%
15.7%
4.5%
5.2%
0% 20% 40% 60% 80% 100%
2016
2015
Video Ad Spending Share According to US Senior Ad Buyers, by Platform (% of total)
TV FacebookOther
YouTube/Google
© 2016 eMarketer Inc. 26
Upfront TV ad spending is slowing after peaking in the 2013-2014 season …
7.1 7.3 7.6 6.9 8.0 8.7 9.3 10.1 9.7 9.5
9.1 9.3 9.27.8
8.69.2 9.4 9.1 8.7 8.4
$0
$4
$8
$12
$16
$20
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
US Primetime TV Upfront Ad Sales, Cable vs. Network TV (billions)
Network TV Cable TV
Source: Media Dynamics Inc., 2015.
© 2016 eMarketer Inc. 27
… with growth rates going negative for the past two seasons
2.1% 1.3%
-12.5%
13.0%
8.0%
4.2%2.8%
-4.3% -3.0%
-15%
-10%
-5%
0%
5%
10%
15%
2007-2008 2015-2016
US Primetime TV Upfront Ad Sales (% change)
Source: Media Dynamics Inc., 2015.
© 2016 eMarketer Inc. 28
CPMs have risen steadily since the onset of the Great Recession in the late 2000s …
Source: Media Dynamics Inc., 2015.
$8.02
$13.34
$15.18
$24.40
$0
$5
$10
$15
$20
$25
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
Cable TV
Network TV
Average CPMs for US Primetime TV Upfront Ads, Cable vs. Network TV
© 2016 eMarketer Inc. 29
… with CPM growth rates ranging from 4.0% to 11.2% in the post-2009 recovery period
8.0%
2.5%
-4.2%
8.9%
11.2%
7.6%6.5%
5.1%4.0%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
2007-2008 2015-2016
Average CPMs for US Primetime TV Upfront Ads (% change)
Source: Media Dynamics Inc., 2015.
© 2016 eMarketer Inc. 30
In primetime TV upfront spending, cable has pulled ahead of network TV
Source: Media Dynamics Inc., 2016.
43.6% 53.1%
56.4% 46.9%
0%
50%
100%
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
US Primetime TV Upfront Ad Sales, Cable vs. Network TV (% share of total)
Network TV Cable TV
© 2016 eMarketer Inc. 31
14:12 14:11
14:2714:33
13:40
14:02
14:24
14:45
2012 2013 2014 2015
Average TV Ad Time per Hour of US Primetime Cable TV Programming, 2012-2015 (mins:secs)
Average hourly cable TV ad loads inched up from 2012 through 2015
Source: Kantar Media, 2016.
© 2016 eMarketer Inc. 32
In 2015, an increase in cable TV ad loads offset a small decline on the broadcast side
15:4916:07
14:36 14:31
12:58
14:24
15:50
17:17
2014 2015
Average TV Ad Time per Hour of US Broadcast vs. Cable TV Programming,
2014 & 2015 (mins:secs)
Cable
Broadcast
Source: Nielsen, 2016.
© 2016 eMarketer Inc. 33
Young adults are leading the charge to digital
There is a clear connection between youth and adoption of digital video. This is expressed in data on cord-cutters, cord-nevers and subscribers of OTT services.
Digital video pulls millennials, more than other groups, away from traditional TV. One study shows this group is watching less TV specifically because of the availability of digital video.
Only half of millennials will subscribe to pay TV by 2025. That’s the finding of a long-range study that projects current demographic trends into the next decade.
© 2016 eMarketer Inc. 34
Younger adults are likeliest to cut the cord or not subscribe to pay TV in the first place
Source: Pew Research Center, 2015.
65%
76%
19%
15%
16%
9%
Pay TV Subscriber vs. Nonsubscriber Share Among US Adults and Young Adults, July 2015 (% of respondents)
Young Adults (18-29)
Adults (18+)
Cord-Nevers
Cord-Cutters
Cord-havers
© 2016 eMarketer Inc. 35
One study projects only half of US internet users ages 18 to 31 will pay for TV in 2025
Source: Forrester Research, 2015.
50%
65%
35%
25%
15%
10%
0% 20% 40% 60% 80% 100%
2025(18-31)
2015(18-31)
Cord-havers Cord-nevers Cord-cutters
Cable Service Subscription Share Among US Internet UsersAges 18 to 31, by Level of Subscription (% of respondents)
© 2016 eMarketer Inc. 36
Millennials are the most avid viewers of TV programming on streaming services
58%
22%
39%
63%
83%
81%
72%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Total
Seniors (69+)
Baby boomers (50-68)
Gen X (33-49)
Millennials (26-32)
Millennials (19-25)
Teens (14-18)
US Internet Users Who Watch TV Programming via Streaming Services, by Generation, Nov 2015 (% of respondents in each group)
Source: Deloitte, 2016.
© 2016 eMarketer Inc. 37
Digital video pulls millennials, more than adults in general, away from traditional TV
Source: Hub Research, 2016.
© 2016 eMarketer Inc. 38
The younger the viewer, the more time spent with digital video and the less time with TV
15
9
6
20
21
24
Digital Video TV
35+
25-34
16-24
Weekly Time Spent Viewing Digital Video vs. Traditional TV According to US TV Viewers, by Age, Feb 2016 (hours)
Source: Hub Research, 2016.
© 2016 eMarketer Inc. 39
Youth also correlates with viewing of streaming OTT TV and video content
Source: Leichtman Research Group (LRG), 2016.
© 2016 eMarketer Inc. 40
TV still owns mega-events … for now
Ad spending on major sports programs is on the increase. This includes the Super Bowl, March Madness and the World Series.
Super Bowl ad spending and per-unit rates are up.Spending more than doubled in the decade leading to 2015, while ad rates nearly doubled in the same period.
March Madness ad spending topped $1 billion in 2012. Since then, ad investment for the college basketball tournament has continued to grow, nearing a record $1.19 billion in 2015.
This doesn’t guarantee that TV will remain the go-to platform for big events. Digital and social media are making a strong play in this area, but for now TV still rules.
© 2016 eMarketer Inc. 41
NCAA Basketball Final Four
Super Bowl
World Series
$0
$200
$400
$600
$800
2010 2011 2012 2013 2014 2015
Network TV Ad Revenues for Major US Sporting Championship Events (millions)
Ad spending for major sporting events has increased substantially in the past five years
2010 total: $574
2015 total: $779
Note: Ad spending on the World Series and NCAA Final Four varies by number of games. In this chart, each of the NCAA Final Four events featured three games, while the World Series ranged from four to seven
Source: Kantar Media, 2016.
© 2016 eMarketer Inc. 42
Super Bowl ad spending and per-unit rates have essentially doubled in a decade
$158.4
$345.4
$100
$200
$300
$400
2005 2007 2009 2011 2013 2015
Super Bowl Total Ad Revenues (millions)
$2.4
$4.4
$1
$2
$3
$4
$5
2005 2015
Super Bowl Ad Rates per 30-Second Unit (millions)
Total Super Bowl ad spending: 118% increase
Super Bowl per-unit ad rate: 83% increase
Source: Kantar Media, 2016.
© 2016 eMarketer Inc. 43
The annual number of Super Bowl ads, and their combined running times, vary widely
92 92
84 84
104
96
78
97
83 82
70
80
90
100
110
2006 2008 2010 2012 2014
Number of Super Bowl Ads
40:15
48:05
34:34
38:36
42:37
46:39
50:41
54:43
2006 2008 2010 2012 2014
Total Running Time of Super Bowl Ads (mins:secs)
Source: Kantar Media, 2016.
© 2016 eMarketer Inc. 44
March Madness ad spending more than doubled in a decade; it now tops $1 billion
Source: Kantar Media, 2016.
$504
$598
$1,188
$400
$600
$800
$1,000
$1,200
$1,400
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
NCAA Men's Division 1 Basketball Championship Ad Spending (millions)
© 2016 eMarketer Inc. 45
Wait…there’s more!
eMarketer StatPack: The Evolving Landscape of US TV & Video Advertising and Consumption contains five of eight sections making up eMarketer’s US TV and Digital Video StatPack: Ad Spending Data and Audience Trends for Broadcast, Pay and Over-the-Top TV—available to eMarketer PRO customers.
The full StatPack provides a visual overview of over 60 charts from eMarketer and third-party sources. It covers all major aspects of the TV and digital video space, including:
Ad spending estimates and forecasts, including trends for CPM rates as well as overall spending for the Super Bowl and other “mega-events”
Viewership metrics for leading platforms and programmers, including Facebook, YouTube and Netflix
The steady rise of the cord-cutters and cord-nevers, and what that means for pay TV, over-the-top (OTT) companies and everyone else
TV and digital time spent data, and why this might imply that a correction in ad rates is coming
Schedule a personalized demonstration or request a quote today.Go to eMarketer.com, call 212-763-6010, or email [email protected]
© 2016 eMarketer Inc. 46
Definitions and Methodology
Definitions
Cord-cutters. Individuals who no longer have access to traditional pay TV services.
Cord-nevers. Individuals who have never had access to traditional pay TV services.
CPM. Cost per thousand advertising impressions.
Digital video. Video content viewed on desktop/laptop or mobile device.
MVPD. Multichannel video programming distributor. A cable-, satellite-, or telco-based pay TV provider.
MSO. Multiple system operator. An operator of multiple cable or direct-broadcast satellite TV systems.
OTT video. Stands for “over the top.” Video content viewed via an app or website that provides streaming video content over the internet and that bypasses traditional distribution; examples include Hulu, Netflix and YouTube.
Pay TV. Subscription-based TV services by cable, satellite, telco/fiber operators and multiple system operators (MSOs); excludes internet protocol TV (IPTV) and pure play online video services (e.g. Hulu, Netflix, YouTube, etc.).
Programmatic advertising. Ads transacted via an application program interface, including everything from publisher-erected APIs to more standardized real-time bidding (RTB) technology.
Rich media. Display-related ads that integrate some component of streaming interactivity. Rich media ads often include Flash or JavaScript, but not content, and can allow users to view and interact with products or services (e.g., scrolling or clicking within the ad opens a multimedia product description, expansion, animation, video or a “virtual test-drive” within the ad).
Methodology
Estimates are based on the analysis of survey and traffic data from research firms and regulatory agencies; historical trends; internet and mobile adoption trends; and country-specific demographic and socioeconomic factors. eMarketer’s forecasts and estimates are based on an analysis of quantitative and qualitative data from research firms, government agencies, media firms and public companies, plus interviews with top executives at publishers, ad buyers and agencies. Data is weighted based on methodology and soundness. Each eMarketer forecast fits within the larger matrix of all its forecasts, with the same assumptions and general framework used to project figures in a wide variety of areas. Regular reevaluation of available data means the forecasts reflect the latest business developments, technology trends and economic changes.