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Altman Solon's
U.S. Perspectives on Total TV Advertising
In 2023, Altman Solon analyzed the Total TV (linear and streaming) advertising ecosystem in the U.S. Through surveys and in-depth interviews with senior leadership at traditional broadcasters, Pay TV, streaming platforms, ad agencies, and brands, we gained insights into investment trends and emerging revenue-generating opportunities for ad products, ad tech, new inventory sources, and emerging ad formats.
Our findings show that Total TV in the U.S., despite offering advertisers a diverse audience with a reach that extends across screens and platforms, suffers from inefficient attribution capabilities and is subject to siloed data. Distributors are investing resources in attribution tools to help provide actionable data as well as more trackable formats, like shoppable TV. Agencies are working to demonstrate the effectiveness of Total TV, but issues like audience measurement and access to data stymie these efforts. Meanwhile, marketers are trying to find the right balance in their investments, prioritizing streaming partners’ scale and price while strategically in-housing areas like creative development and campaign optimization.(e.g., Shoppable TV, shorter interactive formats, etc.).
Explore how these trends are impacting key stakeholders:
⯈ Distributors: Traditional Broadcasters, Pay TV, Streaming Platforms
The television ecosystem, which encompasses linear broadcasters, cable TV, and OTT streaming players, is highly fragmented. Legacy metrics, like ratings, are hard to track across multiple channels and devices. As a result, distributors prioritize ways to keep track of and engage audiences across multiple screens and platforms, leaning on newer metrics for a holistic understanding of impact. Indeed, an overwhelming 72% of distributors in the U.S. are investing in attribution-related solutions. These solutions can provide actionable campaign insights, which should lead to increased advertiser confidence in the medium and increased ad spend.
U.S. distributors are also embracing emerging shorter, interactive ad formats, with some 48% prioritizing shoppable TV. This format allows for frictionless purchasing directly from an ad or natively within the show. With major players like Disney launching their shoppable beta program Gateway Shop and Amazon Prime Video's inaugural Black Friday football game with QR code "shop the game" features, distributors are betting big on this format. The success of shoppable ads will hinge on their ability to engage audiences and effectively measure audience attribution.
Top Opportunities in Total TV
% of total distributor respondents, n = 78
Finally, 40% of distributors in the U.S. see addressable linear as a top priority in Total TV. This format helps mitigate revenue losses in television by shifting them to digital with highly targeted ads and accurate ad performance tracking. Addressable linear can help bridge the gap of siloed data.
U.S. Distributors are optimizing their balance of in-house and external investment in ad tech stack capabilities based on a variety of factors
Investment Plan for Ad Tech Stack Components Over the Next 5 Years
% of total distributor respondents, n=78
When it comes to their advertising tech stack, distributors in the U.S. are diversifying their investments and finding a balance between in-housing and outsourcing. Our findings reveal that distributors are attempting to provide a simplified, one-stop-shop experience to advertisers and are in-housing capabilities like campaign planning, creative development, as well as finance and billing. Conversely, ad delivery, data, and measurement solutions are functionalities that distributors commonly outsource.
Adjustments to the ad stack are, in part, a function of U.S. distributors’ increasing enablement of cross-screen media buys. By expanding their offer, they are, in turn, under pressure to provide extended targeting and attribution tools to demonstrate their ability to reach larger audiences, necessitating greater outsourcing for these features.
Investment Plan for Ad Tech Stack Components over the Next 5 Years
While Total TV is an attractive advertising channel for its breadth, data is often siloed. Unsurprisingly, 81% of agencies in the United States cite "proof of attribution" as a major obstacle in promoting Total TV to marketers. The second biggest challenge is audience measurement, affecting 79% of advertisers. Finally, issues with correctly targeting audiences are a challenge for 59% of agencies.
Top Challenges when Promoting Total TV Inventory as Part of a Campaign, Ranked
% of total ad agency respondents, n=78
Agencies are placing their biggest bets for ROI from Total TV Advertising on optimizing ad formats and attribution
Top Opportunities in Total TV
% of total ad agency respondents, n=78
In an effort to increase Total TV's attractiveness, 67% of agencies are planning on investing in ad products that deliver dynamic, highly personalized creative. However, successfully marketing these products depends upon accurate measurement - unsurprisingly, 50% of U.S. agencies are planning to invest in attribution-related solutions. As marketers continue to in-house capabilities that were historically done by agencies, there is an opportunity for agencies to educate their clients on the value of emerging ad capabilities and products when they are shown to drive growth.
Like distributors, agencies see potential in shoppable TV. 46% of agencies plan to invest in it, suggesting that emerging creative formats can add value and make up for attribution-related challenges.
Marketers at major brands in the United States noted that their main criteria for investing in Total TV ad inventory were price, targetability, scale, and ad innovation. This suggests that marketers see Total TV as a medium with considerable reach; their emphasis on price means that cost efficiency remains a priority. Marketers are seemingly aware of the difficulty in obtaining detailed measurement capabilities, as this criterion was ranked considerably lower in priority. Still, accurate measurement of Total TV campaigns remains necessary to ensure channel growth.
Streaming Partnership Criteria, Ranked by Importance
Respondents ranked criteria from most important (1) to least important (9), n=263
Marketers are evolving their relationship for both autonomy and cost-optimization purposes
Primary Reason for Marketers to Bring a Given Agency Capability In-House
% invested in the last two years; n=150
Marketers are changing their relationship with agencies through in-house creative development to increase brand autonomy. They are also looking to reduce costs and have greater transparency by in-house campaign-related functions like optimization and measurement. Agencies should develop self-service solutions that allow marketers to remain autonomous. Solutions like data enablement (BYOdata), self-service media buys, and value-added services like clean rooms should be explored by agencies as well.
Investment Plan for Ad Tech Stack Components over the Next 5 Years
Total TV draws in a wide-ranging audience and offers advertisers highly personalized, interactive ad formats. Unfortunately, the channel is mired in siloed data and suffers from a lack of cross-channel attribution solutions. In the U.S., video distributors and ad agencies should continue to focus their investments on attribution solutions and emerging ad formats to increase advertiser confidence and ad spend. As marketers become more autonomous, agencies and distributors can educate them and provide solutions that promote data transparency and a better understanding of cross-screen audiences.
Altman Solon serves the world's leading media clients and investors across a diverse set of regions and advertising-related needs.
Our advertising-related strategy services focus on:
⯈ Monetization strategy
⯈ Audience and ad buyer market sizing and growth strategy
⯈ VOD product go-to-market
⯈ Ad sales performance improvement
⯈ Ad tech capability benchmarking and investment planning
⯈ M&A sourcing and valuation
Altman Solon is the world's largest strategy consulting firm, focused exclusively on the Telecommunications, Media, and Technology (TMT) sectors.
Altman Solon has an extensive international reach, with offices in Boston, London, Los Angeles, Mexico City, Milan, Munich, New York, Paris, San Francisco, Singapore, Sydney, Warsaw, and Zurich. Successful projects have been completed in more than 100 countries.
Leadership & Oversight
Matt Rivet
Daniel Weinbaum
Thank you to egta and Mary Ann Halford for their contributions to this report.