2. YouTube sees mixed messages
Alphabet posted YouTube’s third consecutive quarterly revenues drop last month. But the giant is still in good shape.
“[YouTube is] going to get a lot of upfront money, probably as much as any TV network,” said Benes. “But they’re so big. It’s tough, at least in the US, to expand any more.”
Nearly 80% of US internet users will watch YouTube monthly this year. Young people don’t consider watching YouTube (and YouTube’s ads) fundamentally different from watching traditional TV, said Benes. Nearly half of YouTube viewing now occurs on TVs, according to internal figures.
How can YouTube keep growing ad revenues? The company needs to convince advertisers that it really is TV and its ad rates are worth spending, Benes said.
3. Netflix’s ad tier still isn’t impressing
Because Netflix didn’t meet audience guarantees when its ad-supported tier was released last year; it had to give money back to advertisers. It’s unclear if Netflix will be able to sell a lot of inventory and actually deliver viewership. “We know they have the total audience,” said Benes. “But do they actually have the ad-supported audience?”
Long term, Benes thinks Netflix will win over advertisers as viewers adopt the ad tier.
4. The writers’ strike will impact advertising
Benes said the Writers Guild of America strike won’t curtail ad spend, but it will affect where money goes. Advertisers will want to avoid talk shows, which are running reruns or episodes made by skeleton crews during the strike. Meanwhile, unscripted content like reality TV and game shows looks more attractive to advertisers.
“I feel like Netflix and Amazon are more insulated than all these TV companies are,” said Benes, who noted streamers’ sizable inventory could make the strike less noticeable.
5. Advertisers seek flexibility
Advertisers had flexibility to pull back on commitments if events didn’t happen due to COVID-19, such as the NBA playoffs. That hasn’t stuck around, but advertisers are looking for more flexibility, like buying a spot and having that ad placed in the best position rather than buying a position. This is especially attractive for companies with a number of streaming platforms and linear channels, like The Walt Disney Co.
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