Ad spend hasn’t caught up to online consumption
Online video may be faster growing than linear TV, but don’t expect television to relinquish its hold on ad budgets.
Consumers always outpace marketers, but there are other reasons why television is keeping a higher share of ad spend even as it loses battles for eyeballs.
For one thing, the “online video” bucket is a real grab bag. Viewers could be on smart TVs or streaming devices like Roku or Apple TV, with TV-quality ad opportunities. They could also be scrolling a social feed or enduring an in-banner desktop video.
The biggest online video players (i.e. Google and Facebook) are still ad-supported, Barnard said, but ad-free services like Netflix and Amazon Prime skew the consumption numbers without directly impacting ad spend – except perhaps for stealing attention and creating more scarcity of TV supply.
“Advertisers are still paying a high premium to get in front of conventional television viewers,” he said.
Linear TV attracts new buyers
Television also benefits from digital ad platforms opening up TV spend to potentially hundreds of thousands of new brands.
In the past couple years, Facebook-Instagram and Google-YouTube have created more TV-like ad buying services, Barnard said. Facebook invested in episodic content and a more channel-based approach with Facebook Watch and IGTV. Google is in its third year with YouTube TV and this year has beta tested a linear TV ad-buying product for its DSP.
The platforms now have technology that can relatively cheaply turn content into video ads, and brands will increase their spend on TV when they can apply digital targeting data and features like geolocation, Barnard said. The overall shift is towards the internet, he said, but online players are attracting business “that otherwise would never have gotten involved in television.”