The Evolving Landscape of US TV & Video Advertising and Consumption

© 2016 eMarketer Inc. 1
eMarketer StatPack:
The Evolving Landscape of
US TV & Video Advertising
and Consumption
Presented by
November 2016

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Overview
 TV and video advertising are increasingly complementary
 Digital adoption is proven out by time spent on media data
 The sky isn't falling on TV advertising or content
 Young adults are leading the charge toward digital
 TV still owns mega-events...for now
eMarketer StatPack: The Evolving Landscape of US TV & Video
Advertising and Consumption contains charts, key stats, trends and
forecasts that you can keep at your fingertips all year long.
The StatPack is broken out into five sections:

 Multiplatform video advertising is the new normal.
In the past year alone, the number of US marketers launching
multiplatform campaigns skyrocketed, according to one study. This
includes TV.
 TV is still the place to launch video campaigns.
Buyers generally prioritize TV over YouTube, Facebook and other
digital/social channels.
 Programmatic advertising is coming to TV, albeit
slowly. Digital attracts a disproportionate share of programmatic
ad dollars, but TV is gaining ground in this area.
TV ads are increasingly complementary to
digital

Growing numbers of advertisers run video
campaigns across platforms, including TV
Source: Videology, 2015.

TV is still the top place to launch a new
video campaign, followed by YouTube
Source: Cowen and Company, 2016.

The percentage of marketers who bought
programmatic TV ads doubled in 2016
Video still leads in
programmatic buying,
but more TV
advertising will become
automated and
targeted through
programmatic methods
41%
81%
84%
13%
16%
32%
0%
30%
60%
90%
2014 2015 2016
Channels for Which US Marketers Buy Ads
Programmatically (% of respondents)
Digital Video TV
Sources: Association of National Advertisers (ANA) and Forrester Consulting, 2016.

The number of buyers using or planning to
use programmatic TV ads has risen
29%
15%
22%
19%
0% 10% 20% 30% 40% 50%
2015
2014
Current and Planned Use of Programmatic for TV Advertising
Among US Senior Ad Buyers (% of respondents)
Current Planned (Next Year)

Live digital programming has longer and
more ads per break than on-demand shows
13092
0 50 100 150 200
Average Digital Mid-Roll Ad Break Length During US Live vs.
On-Demand Programming, Q4 2015 (seconds)
On-demand Live
6.23.7
0 2 4 6 8
Number of Digital Video Ads per Break During
US Live vs. On-Demand Programming, Q4 2015
On-demand Live
Source: FreeWheel, 2016.

Time spent with video data also points
toward digital adoption
 People still spend a great deal of time watching TV,
but they’re increasingly shifting to digital platforms.
Survey data on people’s future plans indicates these trends will
persist.
 TV is also losing its dominance as a news source.
In this area, social media is exerting an especially strong
countercurrent.
 The share of ad spending on TV is higher than the
share of time spent viewing TV. The opposite is true in
digital video. This disconnect argues for the continued strength of
TV as an ad medium, though it also suggests that a “correction”
may be in order.

Time spent with TV and other traditional
media is declining, while digital time rises
4:38
3:58
4:10
5:56
1:32
1:24
0:40
0:27
0:00
1:12
2:24
3:36
4:48
6:00
7:12
2012 2013 2014 2015 2016 2017
Average Time Spent per Day with Major Media
by US Adults, 2012-2017 (hrs:mins)
Digital
TV
Radio
Print

TV still leads in overall time spent, but usage
is declining as digital gains
Source: Nielsen, 2016.
4:49
4:51
5:04
1:35
1:25
1:07
1:22
1:06
1:01
0:00 1:12 2:24 3:36 4:48 6:00 7:12 8:24
Q4 2015
Q4 2014
Q4 2013
Average Daily Time Spent with Select Media/Devices Among US Consumers (hrs:mins)
Live TV Apps/web on
smartphone
Internet on a
desktop/laptop

Streaming, time-shifted and VOD viewing are
increasing at greater rates than live TV
Source: Forrester Consulting, 2016.
49%
66%
67%
73%
73%
23%
23%
21%
18%
20%
28%
10%
11%
9%
7%
0% 20% 40% 60% 80% 100%
Live TV
VOD
DVR
Streaming
services
Streaming
(network sites)
Expected Change in Consumer Time Spent Viewing Video According to US Advertising Professionals, by Type,
Feb 2016 (% of respondents)
Increase Stay the
Same
Decrease

A staple of live TV, sports is the genre with
the least amount of time-shifted viewing
Source: TiVo, 2016.
18%
35%
37%
41%
50%
56%
61%
64%
67%
68%
72%
0% 20% 40% 60% 80%
Sports event
Animated
Special
News magazine
Sitcom
Reality
Adventure
Action
Crime drama
Science fiction
Drama
US Time-Shifted TV Share During Primetime Viewing,
by Genre, Q4 2015 (% of total)

TV is also losing ground to social media as a
primary source of news content
Source: Deloitte, 2016.
57%
42%
4%
17%
17%
11%9%
7%
0%
20%
40%
60%
2012 2013 2014 2015
Primary Source of News Content Among US Internet Users (% of respondents)
TV
Social Media
Digital News Sites (non-newspaper)
Newspaper Sites
Nonsocial digital media is also waning when it
comes to serving news to US internet users

TV ad share is greater than audience time
share; the reverse is true for digital video
0%
10%
20%
30%
40%
2016 2017 2018
Share of Average Time Spent per Day with TV by US
Adults vs. Share of US Total Media Ad Spending
TV Time Spent
TV Ad Share
0%
10%
20%
30%
40%
2016 2017 2018
Share of Average Time Spent per Day with Digital Video
by US Adults vs. Share of US Total Media Ad Spending
Digital Video Time Spent
Digital Video Ad Share

The sky isn’t falling on either TV advertising
or content
 TV is still a healthy medium. It leads other media in total ad
spending and time spent viewing.
 TV still owns mega-events. Live sports events like the NFL
Super Bowl, the NCAA March Madness college basketball
tournament and the MLB World Series attract more ad dollars than
ever before. The same is true for the Olympics, awards shows and
other high-profile programming.
 Although TV remains strong, there are storm clouds on
the horizon. Long-term trends are unfavorable to TV as we know
it. The industry is in the middle of unprecedented disruption, and
more changes are ahead.

TV will continue to grow and remain the top
video advertising format through 2020
$77.2
$70.6
$16.7
$9.8
$0 $20 $40 $60 $80 $100
2020
2016
US TV vs. Digital Video Ad Spending (billions)
TV Digital Video

Digital video ad spending will grow at a
faster pace than TV ad spend through 2020
2.5% 2.0% 2.5% 2.0% 2.5%
28.5%
19.2%
14.2%
13.1%
10.2%
0%
5%
10%
15%
20%
25%
30%
2016 2017 2018 2019 2020
US TV vs. Digital Video Ad Spending Growth (% change)
TV
Digital Video

Researchers disagree on the general
direction of TV ad spending …
Sources: ZenithOptimedia and Pivotal Research Group, 2016.
$67.00
$66.73
$67.14
$66.44
$65.90
$64.36
$64.94
$66.00
$67.05
$67.97
$63
$65
$67
$69
2014 2015 2016 2017 2018
Comparative Estimate: US TV Ad Spending, 2014-2018 (billions)
ZenithOptimedia
Pivotal Research Group
... but even those forecasting a downward curve predict moderate losses, not a freefall

Digital ad spending on broadcast, cable and
satellite TV properties will top $6B in 2016
This means that
digital video
advertising revenue
also accrues to TV
content owners. It’s
not a zero-sum
game.
Source: MyersBizNet, 2016.
Of the digital ad
spending on
TV-related
properties,
approximately 85%
was video, according
to MyersBizNet

Video will be the second-fastest-growing
digital ad format, after rich media
15.7%
10.0%
0%
20%
40%
2016 2020
US Video Ad Spending Growth (%
change)
Digital Banner Ad Spending Growth
(% change)
36.4%
10.6%
0%
20%
40%
2016 2020
Rich Media Ad Spending Growth
(% change)
28.5%
10.2%
0%
20%
40%
2016 2020
Digital Video Ad Spending Growth
(% change)
10.2% 9.9%
0%
20%
40%
2016 2020
Search Ad Spending Growth
(% change)
8.4%
5.5%
0%
20%
40%
2016 2020
Email Ad Spending Growth
(% change)
5.5%
4.0%
0%
20%
40%
2016 2020
US Video Ad Spending Growth (%
change)
Digital Sponsorship Ad Spending Growth
(% change)

Mobile digital video ad spending will
approach parity with desktop by 2020
$8.63
$5.60
$8.06
$4.24
$0 $3 $6 $9 $12 $15 $18
2020
2016
US Digital Video Ad Spending by Device (billions)
Desktop Mobile

Digital’s share of media spending will grow,
while TV and other traditional media shrink
27.4% 22.2%
35.8% 44.9%
36.8% 32.9%
0%
20%
40%
60%
80%
100%
2016 2017 2018 2019 2020
US TV vs. Digital Ad Spending as a Percent of Total Media Ad Spending
Digital
TV
Other Traditional Media

Facebook and YouTube lead growth in video
ad share; TV’s share is slipping
51.6%
54.5%
25.2%
24.6%
18.7%
15.7%
4.5%
5.2%
0% 20% 40% 60% 80% 100%
2016
2015
Video Ad Spending Share According to US
Senior Ad Buyers, by Platform (% of total)
TV
Facebook
Other
YouTube/
Google

Upfront TV ad spending is slowing after
peaking in the 2013-2014 season …
7.1 7.3 7.6 6.9 8.0 8.7 9.3 10.1 9.7 9.5
9.1 9.3 9.2
7.8
8.6
9.2
9.4
9.1
8.7 8.4
$0
$4
$8
$12
$16
$20
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
US Primetime TV Upfront Ad Sales, Cable vs. Network TV (billions)
Network TV Cable TV
Source: Media Dynamics Inc., 2015.

… with growth rates going negative for the
past two seasons
2.1%
1.3%
-12.5%
13.0%
8.0%
4.2%
2.8%
-4.3%
-3.0%
-15%
-10%
-5%
0%
5%
10%
15%
2007-2008 2015-2016
US Primetime TV Upfront Ad Sales (% change)

CPMs have risen steadily since the onset of
the Great Recession in the late 2000s …
$8.02
$13.34
$15.18
$24.40
$0
$5
$10
$15
$20
$25
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
Cable TV
Network TV
Average CPMs for US Primetime TV Upfront Ads, Cable vs. Network TV

… with CPM growth rates ranging from 4.0%
to 11.2% in the post-2009 recovery period
8.0%
2.5%
-4.2%
8.9%
11.2%
7.6%
6.5%
5.1%
4.0%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
2007-2008 2015-2016
Average CPMs for US Primetime TV Upfront Ads (% change)

In primetime TV upfront spending, cable has
pulled ahead of network TV
43.6% 53.1%
56.4%
46.9%
0%
50%
100%
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
US Primetime TV Upfront Ad Sales, Cable vs. Network TV (% share of total)
Network TV Cable TV

14:12 14:11
14:27
14:33
13:40
14:02
14:24
14:45
2012 2013 2014 2015
Average TV Ad Time per Hour of US Primetime
Cable TV Programming, 2012-2015 (mins:secs)
Average hourly cable TV ad loads inched up
from 2012 through 2015
Source: Kantar Media, 2016.

In 2015, an increase in cable TV ad loads
offset a small decline on the broadcast side
15:49
16:07
14:36 14:31
12:58
14:24
15:50
17:17
2014 2015
Average TV Ad Time per Hour of US
Broadcast vs. Cable TV Programming,
2014 & 2015 (mins:secs)
Cable
Broadcast
Source: Nielsen, 2016.

Young adults are leading the charge to digital
 There is a clear connection between youth and
adoption of digital video. This is expressed in data on
cord-cutters, cord-nevers and subscribers of OTT services.
 Digital video pulls millennials, more than other groups,
away from traditional TV. One study shows this group is
watching less TV specifically because of the availability of digital
video.
 Only half of millennials will subscribe to pay TV by
2025. That’s the finding of a long-range study that projects current
demographic trends into the next decade.

Younger adults are likeliest to cut the cord
or not subscribe to pay TV in the first place
Source: Pew Research Center, 2015.
65%
76%
19%
15%
16%
9%
Pay TV Subscriber vs. Nonsubscriber Share Among US Adults
and Young Adults, July 2015 (% of respondents)
Young
Adults
(18-29)
Adults
(18+)
Cord-Nevers
Cord-Cutters
Cord-havers

One study projects only half of US internet
users ages 18 to 31 will pay for TV in 2025
Source: Forrester Research, 2015.
50%
65%
35%
25%
15%
10%
0% 20% 40% 60% 80% 100%
2025
(18-31)
2015
(18-31)
Cord-havers Cord-nevers Cord-cutters
Cable Service Subscription Share Among US Internet Users
Ages 18 to 31, by Level of Subscription (% of respondents)

Millennials are the most avid viewers of TV
programming on streaming services
58%
22%
39%
63%
83%
81%
72%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Total
Seniors (69+)
Baby boomers (50-68)
Gen X (33-49)
Millennials (26-32)
Millennials (19-25)
Teens (14-18)
US Internet Users Who Watch TV Programming via Streaming Services,
by Generation, Nov 2015 (% of respondents in each group)
Source: Deloitte, 2016.

Digital video pulls millennials, more than
adults in general, away from traditional TV
Source: Hub Research, 2016.

The younger the viewer, the more time spent
with digital video and the less time with TV
15
9
6
20
21
24
Digital Video TV
35+
25-34
16-24
Weekly Time Spent Viewing Digital Video vs. Traditional TV
According to US TV Viewers, by Age, Feb 2016 (hours)
Source: Hub Research, 2016.

Youth also correlates with viewing of
streaming OTT TV and video content
Source: Leichtman Research Group (LRG), 2016.

TV still owns mega-events … for now
 Ad spending on major sports programs is on the
increase. This includes the Super Bowl, March Madness and the
World Series.
 Super Bowl ad spending and per-unit rates are up.
Spending more than doubled in the decade leading to 2015, while
ad rates nearly doubled in the same period.
 March Madness ad spending topped $1 billion in 2012.
Since then, ad investment for the college basketball tournament has
continued to grow, nearing a record $1.19 billion in 2015.
 This doesn’t guarantee that TV will remain the go-to
platform for big events. Digital and social media are making a
strong play in this area, but for now TV still rules.

NCAA Basketball Final Four
Super Bowl
World Series
$0
$200
$400
$600
$800
2010 2011 2012 2013 2014 2015
Network TV Ad Revenues for Major US Sporting Championship Events (millions)
Ad spending for major sporting events has
increased substantially in the past five years
2010 total: $574
2015 total: $779
Note: Ad spending on the World
Series and NCAA Final Four
varies by number of games. In
this chart, each of the NCAA
Final Four events featured three
games, while the World Series
ranged from four to seven

Super Bowl ad spending and per-unit rates
have essentially doubled in a decade
$158.4
$345.4
$100
$200
$300
$400
2005 2007 2009 2011 2013 2015
Super Bowl Total Ad Revenues (millions)
$2.4
$4.4
$1
$2
$3
$4
$5
2005 2015
Super Bowl Ad Rates per
30-Second Unit (millions)
Total Super Bowl ad
spending: 118% increase
Super Bowl per-unit ad
rate: 83% increase

The annual number of Super Bowl ads, and
their combined running times, vary widely
92 92
84 84
104
96
78
97
83
82
70
80
90
100
110
2006 2008 2010 2012 2014
Number of Super Bowl Ads
40:15
48:05
34:34
38:36
42:37
46:39
50:41
54:43
2006 2008 2010 2012 2014
Total Running Time of Super Bowl Ads
(mins:secs)

March Madness ad spending more than
doubled in a decade; it now tops $1 billion
$504
$598
$1,188
$400
$600
$800
$1,000
$1,200
$1,400
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
NCAA Men's Division 1 Basketball Championship Ad Spending (millions)

Wait…there’s more!
eMarketer StatPack: The Evolving Landscape of US TV & Video Advertising and
Consumption contains five of eight sections making up eMarketer’s US TV and Digital Video
StatPack: Ad Spending Data and Audience Trends for Broadcast, Pay and Over-the-Top
TV—available to eMarketer PRO customers.
The full StatPack provides a visual overview of over 60 charts from eMarketer and third-party sources. It
covers all major aspects of the TV and digital video space, including:
 Ad spending estimates and forecasts, including trends for CPM rates as well as overall spending for
the Super Bowl and other “mega-events”
 Viewership metrics for leading platforms and programmers, including Facebook, YouTube and Netflix
 The steady rise of the cord-cutters and cord-nevers, and what that means for pay TV, over-the-top
(OTT) companies and everyone else
 TV and digital time spent data, and why this might imply that a correction in ad rates is coming
Schedule a personalized demonstration or request a quote today.
Go to eMarketer.com, call 212-763-6010, or email sales@emarketer.com

Definitions and Methodology
Definitions
Cord-cutters. Individuals who no longer have access to traditional pay TV services.
Cord-nevers. Individuals who have never had access to traditional pay TV services.
CPM. Cost per thousand advertising impressions.
Digital video. Video content viewed on desktop/laptop or mobile device.
MVPD. Multichannel video programming distributor. A cable-, satellite-, or telco-based pay TV provider.
MSO. Multiple system operator. An operator of multiple cable or direct-broadcast satellite TV systems.
OTT video. Stands for “over the top.” Video content viewed via an app or website that provides streaming video content over the internet and that
bypasses traditional distribution; examples include Hulu, Netflix and YouTube.
Pay TV. Subscription-based TV services by cable, satellite, telco/fiber operators and multiple system operators (MSOs); excludes internet protocol
TV (IPTV) and pure play online video services (e.g. Hulu, Netflix, YouTube, etc.).
Programmatic advertising. Ads transacted via an application program interface, including everything from publisher-erected APIs to more
standardized real-time bidding (RTB) technology.
Rich media. Display-related ads that integrate some component of streaming interactivity. Rich media ads often include Flash or JavaScript, but not
content, and can allow users to view and interact with products or services (e.g., scrolling or clicking within the ad opens a multimedia product
description, expansion, animation, video or a “virtual test-drive” within the ad).
Methodology
Estimates are based on the analysis of survey and traffic data from research firms and regulatory agencies; historical trends; internet and mobile
adoption trends; and country-specific demographic and socioeconomic factors. eMarketer’s forecasts and estimates are based on an analysis of
quantitative and qualitative data from research firms, government agencies, media firms and public companies, plus interviews with top executives at
publishers, ad buyers and agencies. Data is weighted based on methodology and soundness. Each eMarketer forecast fits within the larger matrix of
all its forecasts, with the same assumptions and general framework used to project figures in a wide variety of areas. Regular reevaluation of available
data means the forecasts reflect the latest business developments, technology trends and economic changes.

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