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Millennial Households Shifting to SVODs; New Formats Pose Unseen Challenges to TV Advertisers

Millennial households are embracing the cord-shaving trends without giving a second chance to TV. In a latest report on TV viewership, Samba TV found millennial households are only watching TV for less than an hour in a week, with most of these households remaining subscribed and engaged to SVODs. Samba TV research found 94% of TV Advertising served reached just under 50% of linear audiences in Q1 2022. The report, which analyzed 24 billion hours of linear and streaming, demonstrated the biggest challenges of fragmentation and audience de-duplication in SVOD ecosystem as it competes with TV advertising.

“Advertisers struggle to reach Gen Z and millennial audiences on linear, while older viewers are over-saturated.”

Samba TV research

Cord-Shaving is on the Rise

85% of the US households have at least one SVOD subscription. 

Although the average percentage of households watching linear each day remained at approximately 50%, the rate of cord-shaving accelerated by more than 20% year-over-year. This dramatic rate of cord-shaving is even more severe across millennial households where one in four watched less than one hour of linear per week.

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Samba TV’s State of Viewership Report for Q1 2022 revealed a complex SVOD viewership landscape marked by a saturated linear TV ad market, increased cord-shaving, and a high likelihood for streaming subscriber churn.

“With $68 billion poured into linear advertising every year, the substantial waste taking place in this sector should be a wake-up call to advertisers,” said Samba TV CEO and co-founder Ashwin Navin.

Ashwin added, “The reality that 94% of linear ad impressions in Q1 only reached just over 50% of audiences demonstrates the dramatic need for a flexible approach to ad spend and the imperative of leveraging guaranteed incremental reach opportunities to effectively maximize ROI.” Samba TV’s quarterly State of Viewership Report provides a comprehensive overview of television, movie, Connected TV (CTV), and advertising viewership. As the Upfronts and midterm elections heat up advertising spend, key insights on trends and movements in audience viewership consumption, including how to reach liberal and conservative audiences as well as millennials, Gen Z, and Hispanic households provide timely strategies for advertisers. Samba TV’s report sheds further light on changes in television viewership.

Majority of Linear Ad Impressions Oversaturate the Same Half of TV viewers

Samba TV’s comprehensive insights uncovered substantial saturation and waste across linear with 94% of all ad impressions reaching just 55% of audiences. These same audiences saw an average of 144 linear ads per day, while 45% of American households saw only 11 ads per day.

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While it improved by 3% since Q4 2021, this dramatic imbalance suggests that linear campaigns are still reaching the same viewers over and over again while leaving the rest of Americans unexposed to messaging. With little opportunity to reach new viewers via linear, advertisers need to look to guaranteed incremental reach opportunities to maximize spend across devices and platforms.

Samba TV’s Q1 State of Viewership report
Source: Samba TV’s Q1 State of Viewership report

An SVOD Ceiling Comes into View

Streaming video-on-demand (SVOD) consumption remains on the rise, as Samba TV data shows that just 59% of SVOD-viewing households watched more than one service in Q1 2022. However, less than a quarter of households watched four or more SVOD services in the quarter, showing there is a point beyond which consumers are not willing to spend.

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SVODs Risk Churn with Limited Stickiness: More than half of Hulu, HBO Max, and Amazon Prime Video’s top program viewers watched just one program among the streamer’s top 50 shows during Q1 2022. With viewers only tuning in to one new buzzy movie or show, providers risk “cyclers” hopping between platforms and canceling subscriptions. This risk of subscription churn is paramount as the attention recession grows, highlighting the necessity of streamers to constantly innovate their content and driving acquisition and retention programs designed to deepen streamer engagement.

Advertisers are Missing Key Demographics on Linear

Top advertisers over-index among white and Black viewers but aren’t reaching Hispanic and Asian audiences at a proportional rate. Meanwhile, each of the top 10 advertisers on linear served a disproportionately low number of impressions to audiences below the age of 44.

“From the consumer viewership landscape shifting further toward streaming to major advertisers breaking legacy molds to select currency-grade measurement partners, the industry has undergone several shifts over the past quarter.

Despite the consumer flocking to streaming, these platforms face substantial challenges in maintaining growth and retaining subscribers. This quarter’s State of Viewership Report underscores the distinct challenge advertisers are facing in their quest to reach fresh and diverse audiences across devices,” Navin concluded.

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[To share your insights with us, please write to sghosh@martechseries.com]

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