Home CTV Roundup How Streamers Are Fighting The Plight Of Shrinking TV Ad Inventory

How Streamers Are Fighting The Plight Of Shrinking TV Ad Inventory


TV ad supply is disappearing.

By 2027, US television (linear and streaming combined) could lose up to a quarter of its ad volume, industry analyst Brian Wieser predicted in October. GroupM, Wieser’s former employer, cited a similar prediction during an Advertising Research Foundation event in New York City last week.


Although it’s not surprising to hear that linear ad inventory is eroding, it feels counterintuitive that CTV will lose ad volume because on-demand streaming generates countless unique video streams that should serve as prime real estate for theoretically limitless commercial space.

But therein lies the rub: Subscribers don’t like ads. Starting with Netflix, streaming was born as an alternative to the limitations of linear, from the constraints of appointment viewing and sky-high cable bills to the scourge of heavy ad loads.

Which means streaming platforms are tasked with pulling off the very difficult feat of appeasing viewers while also growing ad revenue enough to placate Wall Street.

How much do viewers dislike ads?

Quite a lot, actually.

Compared with 18 minutes of ads per hour on linear, streaming apps have an average ad volume of about five minutes per hour of content (although that’s creeping up), and even that is too much for many viewers.

Roughly 78% (!) of US streaming subscribers believe they should never have to see ads if they pay for a service, according to research from Bango released in February. And consumers take action when their expectations aren’t met. Approximately 35% of streaming subscribers recently upgraded from ad-supported to ad-free plans to escape interruption, according to the same survey. This trend portends yet more supply scarcity for advertisers.

The hard truth for streamers is that subscribers don’t want ads, but they’ll tolerate some in exchange for a lower price. Push them too far, though, and they’ll churn or upgrade to ad-free.


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But I’m not here just to be a doomsayer.

Programmers are starting to get creative and come up with more ways to boost their streaming ad supply beyond gradually increasing the number of commercials and hoping no one will notice.


Platforms want viewers to spend more time watching content on their apps because longer viewing sessions produce more ad inventory. But to do that, services must strategically manage their ad load to make it feel minimally disruptive.

For example, Warner Bros. Discovery shortens ad breaks during prime-time hours for a better user experience when more people are likely to be watching. But if you’re like me and watch most of your TV in bed after hours, you might not be so lucky.

Consumers are also more receptive to seeing ads in certain types of content over others. While TV shows are produced with ad breaks in mind, movies aren’t designed to be interrupted, and streamers should avoid creating unnatural ad breaks.

Meanwhile, if an ad pod is unfilled, programmers should take the “L” (as Gen Z would say) and collapse the ad break rather than too frequently default to house ads or a “we’ll be back” slate. Because the show will come back, but the viewers may not.

New ad units

Speaking of QR codes, another trick to jack up ad supply is creating ad formats beyond the typical 15- or 30-second spot.

Ad formats like title sponsorships, product placement and pause ads (which display QR codes when a user pauses a stream) work because they don’t interrupt a stream and, as a result, they don’t feel like ads.

Less traditional ad opportunities appeal to advertisers, too. Sponsoring content, for example, can be high impact while also reducing frequency, because sponsorships help raise brand awareness. Binge ads are popular for a similar reason: Advertisers are essentially sponsoring a shortened ad break, which can help raise brand favorability.

The challenge with newer ad formats is that they still lack performance and measurement benchmarks, which complicates campaign planning. But, hey, desperate times call for desperate measures (pun intended).

FAST channels

Last but not least, programmers are homing in on free ad-supported TV because of its potential to produce ad inventory.

FAST channels are designed to create a “linear-like” viewing experience that eases the burden of choosing what to watch. But the real opportunity for media companies is the ad inventory FAST channels generate.

Programmers create FAST channels and license them to content distributors like Roku, Samsung, Xumo and Freevee (which Amazon insists is not going away). Some programmers have FAST apps of their own, like Paramount’s PlutoTV and Fox’s Tubi. But having multiple distributors serves to expand the amount of ad inventory available for particular networks as opposed to when programmers gatekeep the rights to their IP.

FAST channels also help programmers drive more viewership back to ad-supported on-demand streaming – squeezing content for as much ad inventory as humanly possible.

And as TV ad inventory continues its decline, that juice is most certainly worth the squeeze.

For more articles featuring Alyssa Boyle, click here.

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