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Netflix is raking it in: The streamer saw a 166% jump in gross media ad spend in Q2, according to data compiled for Marketing Brew by Guideline, which measures ad agency media investment using data of both direct and third-party DSP revenue when applicable, from Standard Media Index.
Overall, digital video gross media ad spend grew 14% YoY, while linear TV gross media ad spend dropped 12% YoY. The heightened investment in digital video comes amid continued efforts by streamers to court ad-supported subscribers through price hikes and password sharing crackdowns, as well as major subscriber and ad revenue bleed within linear TV.
You win some, you lose some
Disney+ closely followed Netflix in YoY gross media ad spend gains with a 140% boost, according to Guideline. TikTok grew 57%, while YouTube Select and YouTube TV online video ads grew 29%. Advertisers also spent 19% more on Amazon Ads and Fire TV OTT ads and 27% more on Amazon Ads and Fire TV online video ads. Peacock saw the smallest bump, at 16%.
Others didn’t fare so well: YouTube Select and YouTube TV OTT ads and Hulu ads dropped 2% and 5% respectively, and Roku saw the biggest decline of all, at 14%.
While Netflix and Disney+ led the pack in Q1 YoY gross media ad spend gains as well, it remains to be seen how Prime Video ads, roughly six months old, will impact advertiser spend allocation in the long run. Prime Video ads have already forced Netflix to lower its ad rates, according to The Wall Street Journal.
Amid this increasingly competitive environment, streamers continue to lean into building their ad tier subscriber bases: Netflix began a password sharing crackdown months ago that contributed to a boost in ad-supported signups. Its ad tier membership grew 34% quarter on quarter in Q2. Disney+, on the other hand, is planning to lean into its crackdown in September. Disney+ (as well as Hulu and Paramount+) is also raising prices.
Meanwhile, companies with linear TV assets continue to hemorrhage subscribers and ad revenue amid mass cable-cutting: Paramount, for example, posted an 11% drop in linear ad revenue YoY in Q2. Both Paramount and Warner Bros. Discovery took huge write-downs on their cable TV assets in Q2.
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