Nielsen's The Gauge June 2023 Data: More Streaming Implies Less Ad Reach
Nielsen has released its latest The Gauge, viewing data for streaming and traditional TV in the United States, for the month of June 2023. Headline data shows that streaming now accounts for 37.7% of all TV viewing, which compares with slightly more than 30% during June 2022 on a comparable basis. Across all audiences, viewing of broadcasting was down from 22.4% to 20.8% and cable was down from 35.1% to 30.6%. Note that these figures cover all audiences above the age of two. Narrowing viewing shares into the key demographic groups that most advertisers focus on would result in significantly higher shares of viewing on streaming and significantly lower shares of viewing on broadcast and cable.
Most analyses of this data should exclude YouTube for now, as few advertisers include it as a component of their television budget despite accounting for 8.8% of all TV usage in the most recent data (whether or not it should be included is a separate matter, although it appears increasingly clear that they will need to do so if they want to find new sources of audience reach). Additional adjustments are necessary to estimate how much advertising inventory is available in streaming environments, because most streaming is on ad-free services, or at least the ad-free version of services.
Putting aside that ad loads will also be different across services, across all audiences but excluding YouTube, I estimate that during June 2023, ad-supported streaming accounted for around 9.5% of all viewing, up from 5.2% in June 2022. Meanwhile, I estimate ad-supported broadcast and cable accounted for 53.4% of all TV viewing, down from 57.7% a year earlier, as the two essentially offset each other (notwithstanding what are likely lower ad loads, on average, in streaming environments).
Overall ad-free viewing – primarily in streaming environments but also including ad-free broadcasting and cable (i.e. PBS and premium TV) - amounted to around 22% of TV viewing in June 2023, higher vs. an approximate 20% figure for June 2022, although specific figures require extensive assumptions and estimates.
Source: Madison and Wall estimates
In whatever way we look at it, the data continues to highlight an ongoing shift of viewing away from linear TV where it’s easier for sellers of advertising to reach audiences with advertising relative to streaming because there are significant numbers of consumers who won’t subscribe to ad-supported tiers or who (fortunately) only experience low advertising loads. While these services often attempt to compete on targeting, flaws and limitations in data and incompatibility of measurement with linear TV in many instances mitigates advantages that might otherwise exist.
It’s not entirely doom and gloom for TV network owners: paraphrasing Winston Churchill, for many marketers, television is the worst form of advertising, except for all those others which have been tried. Towards those ends, the medium continues to serve an important purpose for marketers who believe sight, sound and motion paired with the borrowing of brand equity of (relatively) premium content drives marketing results. However, the challenges the television industry faces which I’ve written about previously – including a few times last week – remain firmly in place.
While streamers such as Netflix will inevitably make progress building out their advertising business, and streaming more generally will continue to grow, owners of linear TV services and the marketers who support them need to ensure that they are prepared for a world where linear TV advertising – as well as the reach that comes with it - continues to lose meaningful viewing share on an ongoing basis.