Ad-supported video-on-demand (AVOD) platforms experienced strong growth in ad revenues in Q2 2020, making the AVOD space a bright spot in the ad market amid the pandemic. Across five of the major ad-supported streaming platforms (Roku, Hulu, Peacock, Pluto TV and Tubi), ad revenues jumped 31% year-over-year (YoY) to reach $849 million last quarter, according to new estimates from MoffettNathanson Research.
That increase is in line with our expectations for US connected TV (CTV) advertising for 2020, where most AVOD dollars are likely going. We forecast that US CTV ad spending will grow by 25.2% this year due to the sharp increase in usage amid lockdowns.
Here's a breakdown of the five platforms' ad revenues:
But with four of the five AVOD platforms owned by major media conglomerates, some of this growth is likely coming from reallocated TV spend. The 31% rise in ad revenues for these five premium AVOD platforms is in direct contrast to MoffettNathanson's estimated 28% decline in national broadcast and cable TV ad spending in Q2.
Though it's true some AVOD increases are due to dollars being shifted directly out of linear TV and into OTT, some AVOD ad growth can also be attributed to TV advertisers moving spend with media companies to their owned OTT properties, per Eric Haggstrom, eMarketer forecasting analyst at Insider Intelligence. "Some advertisers who bought ads in the upfronts are shifting money within the same media company to streaming services," Haggstrom said.
11 Times SquareNew York, NY 100361-800-405-0844