Ad spend on streaming’s top platforms dropped 8% year over year, per report

Ad spend on streaming TV is expected to keep climbing in the coming years, but there’s some not-so-good news for the David Zaslavs and Bob Igers of the world. Ad spend on the top six streaming platforms, which include Max, Discovery+, and Hulu, totaled $1.07 billion this year, which is down 8% year over year, according to data from advertising intelligence platform MediaRadar.

The report, which evaluated data from January 1, 2022, through October 31, 2023, found that ad spend on the six biggest OTT platforms, which also included Paramount+, Peacock, and Pluto TV, fell from $1.2 billion in 2022.

Why the reason for the decline? Major financial advertisers, including insurance giants like Geico, State Farm, and Progressive, cut their ad spend from $123 million to $32.5 million, MediaRadar found.

Crunch the numbers: About $503 million, or 47%, of ad spend in the period came from the restaurant, medical and pharmaceutical, finance, retail, and technology verticals. Pharma companies like AbbVie and GlaxoSmithKline and quick-service restaurants like McDonald’s, Taco Bell, and Subway increased their ad spend the most.

Max saw 19% of its ad dollars come from tech advertisers, including telecom giants like T-Mobile and HBO’s former owner, AT&T. Tech advertisers made up almost 10% of ad spend on Paramount+. Restaurants made up a major contingent of advertisers on Paramount+, as well as on Peacock and Hulu.

Hulu also saw strong ad investment from retail advertisers like Target and Walmart, which accounted for 28% of its ad dollars. Retail advertisers made up 14% of ad spend on Discovery+ and 12% on Pluto TV.

Tough break: The lower advertising spend on the top six platforms comes at a time when streaming platforms are facing a number of business challenges, according to Todd Krizelman, CEO of MediaRadar.

“Streaming platforms are confronting steep hurdles around ballooning content expenses, password sharing dilution, and an uncertain economic climate,” he said in a statement. “These factors are fueling downstream subscriber and advertising adversities across the industry.”

Consumers are spending less on streaming services due to economic stresses, according to data from Parks Associates, a market research firm. In recent months, several platforms, including Disney+, Discovery+, Max, Hulu, Paramount, and Peacock, raised prices to encourage subscribers to watch on less expensive ad-supported tiers.