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iSpot.tv’s “Year End Report: TV Advertising Insights For 2020” provides an interesting snapshot of how TV fared in the past year. Although iSpot.tv reports on ad impressions, which is not the same as actual ad viewing, its ability to compare these impressions across platforms is a useful way to see how advertisers allotted their ad dollars and how linear TV performed compared to digital.
Per the report, the top 10 industries (by TV ad impressions) for 2020 were as follows:
As shown, the insurance and automotive categories—traditionally heavy TV advertisers—continued to depend on this medium in 2020. Even with 18% fewer impressions than in 2019, automakers retained the number two spot on the list. On the other hand, categories that appeal to consumers stuck at home during the pandemic greatly increased their TV ad presence, particularly video streaming services, which upped their impressions by a whopping 94% to pitch their services to viewers hungry for new content to pass the time.
As for the distribution of ad impressions by platform, iSpot.tv’s research reported that the following 10 linear TV networks garnered the most impressions, compared to the top 10 streaming services:
It’s clear that the linear TV networks retain the lion’s share of ad impressions compared to streaming platforms. This is in line with typical TV viewing. Per our calculations of Nielsen data, over 75% of an average adult’s weekly time spent with TV is devoted to linear live+delayed viewing, so it makes sense that most impressions occur there. However, the number of impressions served on streaming services grew exponentially in 2020; among others, Hulu’s impressions were up 144% and CBS All Access was up 326%. At the same time, many linear TV networks’ impressions were down compared to 2019, particularly the major broadcast networks, which saw declines between 1% (CBS) and 12% (Fox).
Will these patterns continue in 2021? Stay tuned.
Recent research underscores our December commentary on the purported “death” of TV. Parks Associates reported that, as of the end of 2020, 20% of broadband households use ad-supported OTT services like that offered by Hulu, and 15% use so-called freemium services like NBCU’s Peacock. Furthermore, another research company, Activate, reported that in 2020, the number of AVOD services used by an average household doubled from 1.5 to 3.1.
Offering free access to its content in exchange for watching ads has led to early success for Peacock, with more than 22 million signing up for its service since its launch in mid-2020. Although breakouts of use by tier were not available, it’s logical to assume that Peacock’s free tier is at least a gateway to the paid tiers. As a point of comparison, CBS All Access, which does not have a freemium option, currently has close to 18 million subscribers, but it took nearly six years to reach this level. The point is consumers are willing to watch ads to access content, and the TV networks are cashing in on the familiarity of their brands and programming to attract eyeballs to the ads that run on their OTT services. As we discussed last month, TV is hardly dead; instead, it continues to follow the eyeballs using the latest technology, just as it has always done.