Streaming TV advertising is poised to surge ahead in the upcoming years, but for industry titans like David Zaslav and Bob Iger, the news isn’t entirely rosy. According to data from advertising intelligence platform MediaRadar, ad spend on the top six streaming platforms—Max, Discovery+, Hulu, Paramount+, Peacock, and Pluto TV—amounted to $1.07 billion this year, reflecting an 8% year-over-year decrease.
Analyzing data from January 1, 2022, through October 31, 2023, MediaRadar’s report highlighted a significant decline in ad spend compared to the $1.2 billion recorded in 2022. The primary factor behind this dip? Major financial advertisers, including industry giants like Geico, State Farm, and Progressive, scaled back their ad spend from $123 million to $32.5 million.
Digging into the numbers, approximately $503 million, or 47%, of ad spend during this period originated from various sectors—restaurant, medical and pharmaceutical, finance, retail, and technology. Notably, pharmaceutical companies such as AbbVie and GlaxoSmithKline, along with quick-service restaurants like McDonald’s, Taco Bell, and Subway, bolstered their ad spend significantly.
In terms of specific platforms, Max witnessed 19% of its ad revenue from tech advertisers, including telecom giants like T-Mobile and AT&T, the former owner of HBO. Paramount+ and Peacock each saw nearly 10% of ad spend coming from tech advertisers. Meanwhile, Hulu experienced robust ad investments from retail advertisers such as Target and Walmart, constituting 28% of its ad dollars.
The challenges facing streaming platforms include escalating content expenses, password sharing dilution, and an uncertain economic climate, as noted by Todd Krizelman, CEO of MediaRadar. In response to economic stresses, consumers are trimming spending on streaming services. Platforms like Disney+, Discovery+, Max, Hulu, Paramount, and Peacock have responded by raising prices, aiming to incentivize subscribers to opt for more affordable ad-supported tiers, according to data from market research firm Parks Associates.
