By Mark Boidman, Head of Media, Solomon Partners
At the 2023 OAAA / Geopath OOH Media Conference, Solomon Partners shared insights on the latest media trends. Some of the key findings from Solomon’s recent report are:
TV Networks are losing viewers and advertisers. In 2016 there were 98 million Pay TV households in the U.S. By the end of 2022, that number had shrunk to 65 million and is expected to diminish to approximately 51 million by 2026 – falling nearly 50% in a decade.
Streaming services are losing billions of dollars. Losses among 4 of the major companies in the field – Disney, Warner Brothers, NBCUniversal and Paramount – reached $6 billion in 2021 and hit $10 billion last year.
In the midst of these trends, share prices of the largest media companies declined approximately 50% in 2022, based on the S&P 500 Media & Entertainment Index. Google and Meta, which once dominated the ad pie, are losing advertising share. Indeed, for the first time since 2014, Google and Meta accounted for less than half of U.S. Digital Advertising Revenue.
Streaming is also losing steam. Although Streaming is currently the largest TV form, its momentum has slowed substantially. Combined Disney, Netflix and Hulu added 114 million subscribers in 2020, versus 59 million in 2021 and 44 million last year. Disney alone lost 2.4 million subscribers in the final quarter of 2022. And most Streaming companies remain unprofitable.
To be sure there are some bright spots. Retail Media Networks, for example, are now one of the fastest-growing ad market segments. Almost all the major U.S. Retailers have joined the party and launched Retail Media Networks from Best Buy and CVS to Lowe’s and Home Depot to Macy’s and Walmart. According to Insider Intelligence, this 3rd wave of digital advertising is expected to be the biggest we’ve seen!
The fragmentation in the Media universe is creating chaos and making it increasingly difficult for advertisers to reach mass audiences. Audiences are tuning out from linear TV; podcasts are diminishing in popularity; and newspaper readership has shifted almost entirely online, where it’s far easier to gloss over ads.
Where have all those eyes and ears gone? While TV, radio, podcasts and print fell from favor, social media and short-form content are capturing more of consumers’ attention. In the past decade, the average time spent on mobile devices and digital media shot up substantially. How do advertisers reach a mass audience today? As our society becomes increasingly mobile, Out of Home is well-positioned to win.
So far in 2023, there are 4 major media trends we’re witnessing:
#1 Price matters
#2 OOH ad recall outpaces digital / mobile
#3 Advertisers are moving to brand marketing
#4 Brands want reach and impact with large format media
As Out of Home media extends its influence on consumers, we’re also witnessing investors gravitating toward the medium. Many are attracted to OOH because of its ability to reach a large audience and indications that OOH can weather a recession more easily than other media formats.
As Out of Home media continues to evolve, it will be important to adapt to the ever-changing new world of media.
Some key recommendations:
- Create a universal platform for buying and selling Out of Home ads.
- Optimize measurement and attribution to provide better data to advertisers on audiences and Return on Investment for brands.
- Work hand-in-hand with Retail Media Networks, as there is a massive opportunity with in-store, on-premise and physical retail advertising.
To get more information and delve deeper into the data, view Solomon’s OOH conference presentation here or download Solomon’s 2023 Media Trends Report here.