News on Medial

Streaming was supposed to rescue the ailing TV ad business. It hasn’t.

Livemint · 7m

Brands such as Mondelez and Hershey are decreasing their TV advertising budgets as they find that traditional television no longer reaches their target audiences effectively. These companies are redirecting their ad spending to social media sites like TikTok and Instagram, as well as advertising on the websites of large retailers like Amazon and Walmart. While many had hoped that ad-supported streaming TV would fill the gap left by traditional TV, this has not been the case. Brands are now focusing on building reach across multiple platforms and shifting their ad budgets to digital channels. Live sports remain popular for TV advertising, with 96 of the 100 most-watched broadcasts last year being live sports events. However, as more sports content is watched on streaming platforms, traditional TV conglomerates are preparing to launch dedicated sports streaming platforms. The streaming landscape remains fragmented, and streaming audiences are less tolerant of ads compared to traditional television. High ad prices and varying viewership measurement and ad performance also complicate matters for marketers. Retail media, including platforms like Amazon and Walmart, are benefiting from the shift away from traditional TV, as they offer access to valuable customer data and the ability to measure ad effectiveness. Ad spending in the retail media sector is expected to surpass traditional TV ad spending next year. Microsoft has reduced its traditional TV advertising in favor of digital ads, which offer better measurement. The decline in TV ad spending is happening faster due to significant discounts offered to longstanding advertisers, but if these discounts were removed, brands like Mondelez would likely stop buying TV commercials altogether.