TV and streaming are losing the advertising battle to social media and retailers

For many of Hollywood’s biggest studios, today marks the beginning of “upfronts” – a time-honored tradition of wooing advertisers with previews of TV’s upcoming shows.

And it comes at a time when brands are shifting more of their spend away from traditional TV ads:

• Excluding political advertising, marketers are expected to spend ~$60 billion on traditional and digital TV ads in the US this year, down from ~$64 billion in 2019.
• Major brands are accelerating the shift: For example, Hershey’s share of advertising dollars directed towards TV currently sits at ~30%, down from ~80% five years ago. And Mondelez, the maker of Oreos, Ritz crackers, and Sour Patch Kids, is spending ~15% of its US ad budget on TV this year, down from ~42% three years ago.

Yes, but… Traditional TV advertising does have one bright spot still attracting marketers – live sports, which accounted for 96 of the 100 most-watched broadcasts last year.

Streaming platforms aren’t filling this TV gap. High prices, lower reach, and audiences not as open to seeing ads as on other platforms mean marketers are looking elsewhere to spend their dollars (for now at least). Main beneficiaries of the drop in TV ad spend have been social platforms (Snap, Instagram, YouTube, TikTok, etc.) and retail platforms with attached ad networks (Amazon, Walmart, etc.).

Case in point: Ad spending in the US retail media sector, a category that includes retailers’ ad platforms, is expected to overtake traditional TV ad spending next year.