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State of the Screens

Three Predictions for Video Advertising in 2023

By December 30, 2022January 8th, 2023No Comments

1) Reach for local advertisers is becoming a BIG problem – It is hard to break 60% reach (outside of skewed demos) with any TV platform, and finding the right mix has never been a greater challenge.

Our team tracked the reach/frequency to swing voters across key elections this fall.  A continued trend was the declining reach of both broadcast and cable, but streaming still had a ceiling on the number of reachable households with ads.

Deep dive: The Georgia Senate election provides a great example.  During the final month, the Warnock campaign delivered 118M broadcast TV impressions to swing voters (1.9M HH) in the Atlanta DMA.

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Problem #1: Broadcast reach maxed out at 63% (1.2M HH)

Problem #2: The average HH with at least 1 swing voter received 96 broadcast TV ads (20 per week) during that month.

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Bottom line #1: This campaign spent a huge sum on broadcast TV ads and still missed 37% (700K) of targeted households.  What would this reach curve look like for a normal brand spending a fraction of that amount?

Bottom line #2: Local brands will continue to need broadcast, cable, and streaming TV to reach their goals, but over-relying on any of the three will lead to lower reach and over-saturation for those who see your ads.

More: Lessons From The 2022 Georgia Senate Race

2) Growth in user-generated-content (video specifically) will begin eating into total TV time – If TikTok makes it through 2023 without being banned in the United States, then this will be obvious to everyone in the convergent TV space.

Interesting proxy: Atmosphere TV (sadly not a Screen Wars Fund portfolio company) provides a feed to bars/venues with a never-ending curated loop of user-generated video.  This past summer, Lil Screens and I frequented multiple restaurants running this feed, and watching it was quite enjoyable.

Worth your time: Ben Thompson @ Stratechery posted a great interview with Eugene Wei covering this and many other topics.

More: TikTok’s Still Trending

3) Streaming will eat into linear share of total TV time faster than people think – According to Nielsen, November was the highest YoY growth rate (↑ 34%) since they began releasing the Gauge report.

Why this matters: If growth for streaming is accelerating through peak NFL/college football, what happens in January when those go away?

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Michael Beach

Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.