Advertisers turn to digital

Global (Commonwealth) _After completing quarterly financial reports, media corporations revealed that traditional TV is still trailing digital and streaming in terms of ad income.

According to eMarketer estimates, traditional TV ad purchasing during Upfronts is predicted to rise by around 1% to $18.79 billion this year. Compared to previous year, when it fell by around 4% to $18.64 billion, this is an improvement.

According to eMarketer, digital advertising spending at the Upfronts and Newfronts, which happen a few weeks before the traditional media events, is predicted to rise by over 32% to $16.45 billion this year.

This week, in the midst of a major industry change, media behemoths are presenting their yearly proposals to advertisers. With the end of the Hollywood writers’ and actors’ strikes, big cost cutting is essentially in the past, streaming has completely adopted advertising models, and the upfronts will probably feature a star-studded lineup once again. Nevertheless, the industry is seeing more turmoil as the Upfronts presentations take place this year.

CEO of Warner Bros. Discovery David Zaslav stated, “It feels like this is a time, a moment in terms of what the next year, two years will bring,” last week on the company’s earnings call. “I said this is a disruption of a generation,” some time ago.

These are the subjects that people will probably talk about throughout Upfronts week, whether they are in the audience, on stage, or privately. According to eMarketer, digital advertising spending at the Upfronts and Newfronts, which happen a few weeks before the traditional media events, is predicted to rise by over 32% to $16.45 billion this year.

According to a statement from Macquarie senior media tech analyst Tim Nollen, conventional TV ad revenue improved overall last quarter, down 8% from roughly 16% in the same period prior year. Across media firms, streaming advertising increased by 22% and currently accounts for 18% of all advertising.

Digital advertising income experienced a resurgence for tech businesses such as Microsoft, Roku, Snap, and Google this past quarter. Additionally, advertisers may learn from the success stories of YouTube, Netflix, and Amazon.com.

During this month’s earnings call, Disney CEO Bob Iger stated that Netflix is, in many ways, the industry standard for streaming. After riding the wave of password-sharing freeloaders who became paying customers during the previous year, Netflix had roughly 270 million global members at the conclusion of the last quarter.

The business has relied on its less expensive, ad-supported tier, which costs $6.99 per month in the US, to persuade customers who are cost-conscious to pay monthly subscription fees. A little over a year after its debut, in January, Netflix’s ad-supported tier had over 23 million monthly active customers.

Earlier this year, Amazon Prime Video launched its advertising tier. In recent years, Amazon has spent billions on live sports rights, which are highly sought-after advertising space. Including shelling up over $1 billion annually for the National Football League’s season-long package of games, “Thursday Night Football.” Amazon revealed last month that its first-quarter advertising income increased by 24% to $11.8 billion.

In the first quarter, YouTube generated more than 20% more money from advertising than predicted, coming in at $8.1 billion. According to Nielsen, YouTube surpassed all other streaming applications in terms of views for a record 12 months in February.

Netflix and YouTube will make their presentations at their upfront events in New York City on Tuesday and Wednesday, respectively. There might not be as much optimism among conventional media figures.

In the first quarter, domestic advertising for NBCUniversal, a division of Comcast, remained steady at almost $2 billion; nevertheless, streaming services the money from ads boosted Peacock.  NBCUniversal will begin the upfront at Radio City Music Hall.

Disney announced a decrease in first-quarter advertising income for both Hulu and its conventional cable networks, despite a more than 20% growth in ESPN’s domestic ad sales during the same period last year. Disney’s presentation is scheduled for this Tuesday.

Disney CFO Hugh Johnston stated on last month’s earnings call, “The challenge, obviously, in the advertising market right now is there’s a lot more supply in the market, largely as a result of one of our competitors entering the ad tier.