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Behind the Numbers: an EMARKETER Podcast
The Ad Dollars & Attention Mismatch—The Big Screen Ad Spend Gap, YouTube’s CTV Edge, and More | Behind the Numbers
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- [00:00]
A
Unlock more growth with awin. Tackle acquisition, conversions and retention by tapping into a network of over 1 million affiliate partners. That's too many. With everything from partner management to reporting and payments in one easy dashboard, AWIN helps brands drive real scalable growth. Oh, growth and results both. They do everything. Visit awin.comeMarketer to learn more. Hey, gang. It's Friday, August 29th. Ethan Minda and listeners welcome in to behind the Numbers E Marketer video podcast made possible by awin. I'm Marcus, and joining me for today's conversation, we have two people both calling New York home. Our first is principal forecasting writer Ethan Kramer.
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B
Flood Marquez. Good to see you.
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A
It's been a while without getting too much energy. Done it.
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B
Turn it down? No, that's. That's my level. It's going up from here.
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A
Oh, good. We're also joined by senior social media analyst Minda Smiley.
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C
Hello, Marcus. How are you?
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A
Very good. How we doing?
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C
Good, good.
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A
Very nice. All right, today's than I am.
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B
That's what we were looking for.
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A
Today's fact Nigel Richards is the Scrabble goat. Goat being great. Greatest of all time. Not real goat in place gravel. Do goats have two names? Some of them. How are they gonna get their mail every two years? Sorry, it's gone up the rails. Every two years. Every two years, the best Scrabble players on the planet gather for the Scrabble World Scrabble Championship. No one has dominated the space quite like New Zealander Nigel Richards. Richards has claimed five English language world titles to date, but his most astounding wins come in languages he doesn't even speak.
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B
Whoa.
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A
In 2015, he memorized the entire French Scrabble dictionary in just nine weeks without learning French and won the French language World championship and then did it again in 2018. Time magazine notes an NPR piece reports his friends said that he didn't understand the words, he just recognized them as playable tiles.
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B
Wow.
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C
Way to make me feel bad about myself before the long weekend, Marcus.
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A
You're welcome. Also not impressive enough. He did it again in 2024, and this time in Spanish. At the World Championships in granada, he beat 150 people from over 20 countries, winning 23 out of 24 games, says the Guardian. For context, David Elder of Australia has two world championship wins, 2017, 2023, making him the closest competitor. But Richards has eight.
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B
I mean, I'm slightly embarrassed for the world's Spanish speakers and the world's French speakers, but we'll give the credit to this guy.
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A
Yeah, I hate Scrabble My mum beats me regularly.
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C
Does anyone play wordle? Still just coming in about wordle?
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B
Oh, yeah, almost every day. Almost every day.
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C
Oh, wow. Okay.
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B
It's a ritual. Yeah.
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C
Yeah, I was.
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B
That means I would be competitive with this guy if it came back.
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C
Sounds like it.
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A
No, no, that's not what this means. Today's real topic, the mismatch between ad dollars and audience attention. Two of you have written reports about this anomaly, where the people spend their time and where the ad dollars go to try to reach them. And oftentimes there are imbalances. So how much time do people spend watching TV versus the amount of ad dollars there? Or how much time do people spend on Instagram versus the ad dollars that go there? We'll start, Ethan, by talking about device. So, slightly bigger picture. What's the biggest discrepancy by device with regards to where people spend their time versus how many ad dollars are aimed there?
- [04:13]
B
So just quick background for folks that are listening. You know, we have this gigantic forecast where we piece together the totality of all ad spending in the US Everything that's getting spent everywhere. And then we have this other forecast, completely separate, where we calculate what all consumers are doing and how they're spending their time with media. And then we smash those two things together and we see what's what. And this year, we were able to write several different reports on those outcomes. So you asked about the devices. Spot on. The most interesting element is an argument we've made before, which is that far, far more advertising money is flowing to ads that appear on mobile devices than the amount of time that people actually spend looking at mobile devices. And then the flip side of that, where the most extreme discrepancy in the reverse order is CTV streaming televisions and digitally connected televisions, where we as consumers are spending an absolutely enormous amount of time, but the amount of ad dollars flowing to CTV is, despite what you may have heard, actually kind of small. So those are the two big discrepancies. And we've got lots and lots of granular data on this. I'll just try to use it in the simplest numbers possible, which is basically that the totality of the US ad ecosystem spends, sends well more than 50% of its total ad spend to mobile device advertisements. Whereas we as a society actually only spend about a third of our time with media looking at mobile devices.
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A
The other side of it. Yeah, it's huge imbalance because of that is a huge imbalance on the. On the big screen. So 40% of time is spent as Time spent with media is watching the big screen CTV plus linear versus and just having 20% of the ad dollars going there. And so what does that trend look like going out?
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B
They're getting worse. So that, Yeah, I hinted at that. The reason that this is still worth talking about, because we have sort of revealed this discrepancy in the past, is that despite this misalignment, every year the gap gets further and further. So the mobile is more and more and more dominant from advertisers perspectives, but it is not more and more dominant from regular consumers. Consumers are hardly spending more time with their phones than they were in the past. That has relatively flatlined. Yet mobile is getting a bigger and bigger and bigger chunk. And then ctv, the opposite is happening. And this rings true for Netflix fans out there and Disney plus and HBO and regular TV and sports. We're all actually spending more and more and more time in front of CTVs, but the ad dollars that are flowing to it are not keeping up. So that gap is getting bigger as well.
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A
Is there a reason, going back to mobile for a second, is there things that we can point to or is this just that the industry is so focused on mobile being so important that this is just a continuation of a trend that started a long time ago and there hasn't been a correction that there.
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B
Of course there are reasons. And that is actually a great segue into what I believe is your second question, which will pan hand it over to Minda.
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A
My second question, See, I checked. I don't even know where are we going.
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B
There's a reason that mobile dominates is because of what's on mobile, what we're looking at and where that money is going.
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A
Okay, and I will take it from here. Yeah, go ahead.
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B
We got an official question.
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A
Go ahead, Minda.
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C
Yeah, well, what I think you're going to ask is about, you know, the role that social plays in all of this. And really the big, the big story that my report focused on is around the fact that when we look at the share of time spent on meta versus the share of ad dollars that goes towards Meta, there really is a big disparity. Advertisers are just putting way more money towards Instagram and Facebook compared to how much time adults actually spend on these two platforms. Of course, adults are spending a lot of time on Instagram and Facebook. They're two of the biggest social networks, you know, ever. But when you actually look at how much ad dollars are going towards meta in general, it's just. It's just incredible. They really they really are far ahead. And it does call into question, you know, if advertisers are maybe going a bit, you know, going a bit too far on meta, when they could perhaps be spreading, spreading their budgets a little more evenly.
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A
That is the big question here. And looking at total social network versus ad spend, social network time versus the ad spend world. So there's a slight overcorrection that's been happening. So two years ago, the share of time spent on Social was 4 points higher than the ad spend on Social. And two years from now, the gap will be 4 points in the other direction. So there's been an overcorrection in the other direction. Ethan, we talked about this before, I think at the start of the last episode about this a year ago, where you were cautioning against these things shouldn't be perfectly synced up. There's more to it than this is how much time is being spent in a place you should allocate the exact amount of dollars or the exact share.
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B
Yeah. So when you ask why these discrepancies exist, I guess there's two answers. There's really the blatant answer is where money is flowing and then what we, what devices we tend to use while engaging with those platforms. So if you're engaging with social media, you're probably on a phone. If you're engaging with Netflix, you're probably on tv. If you're on search, you're either on a mobile phone or maybe you're on a desktop laptop. But that's not really answering why. But the real answer is why is because it works. You know, because the, the advertisers are sending money to, to, to market on these social networks because there's a good return on their investment to do it that way. And so this massive discrepancy has built up over time because it's so effective. Right. There's a reason that everyone is doing what they're doing. Folks aren't stupid, right? They send the money where they're going to get a return. And so when we discover these misalignments, it's not a value judgment saying, oh, you're doing this all wrong. How come you're not spending more money on Spotify? How come you're not spending more money on Netflix? Don't you realize that people spend tons of time there and you're not spending hardly any money there? And look, you're spending all your money on Facebook and Instagram, but people actually are not spending very much time on Facebook anymore. We're not saying anything Wrong about that. Clearly it works. Clearly, search advertising also works. Right. But we're identifying areas of opportunity, and we're also identifying areas where maybe there's been an overshoot. I think Marcus used that term. Right. It's like we've gone too far. Yes, this all works. There's no denying it. But look at what you might be missing. You know, look at where people really are and what, you know, how you could maybe rebalance if you took a reassessment.
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C
Exactly. And just to put like some figures towards some of the. What I mentioned earlier around Meta, I mean, they will bring in almost 75% of all social network ad spend in the US this year, according to our estimates. But US adults will spend roughly 40% of their time with social. With social networks on Instagram and Facebook. So kind of helps, really, you know, just put some actual figures to that disparity. And I totally agree with what Ethan's saying. I mean, there are a lot of reasons why advertisers spend on meta. They have scale, they have targeting, they have a lot of sophisticated ad tools, low barrier to entry. I mean, I could go on and on. Like, obviously, we can't really look at time spent in a vacuum. And to Ethan's point, just say, oh, there's these huge disparities, Something is going wrong. That's not it at all. But as I was saying earlier, it just kind of indicates that perhaps advertisers are putting too many eggs in meta's basket, so to speak, and there could just be some movement around. But, yeah, it provides some interesting comparisons and analysis. But of course, it's much more.
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A
Part of this is just lag, right? The people have to go to the thing, and then advertisers have to see it as being worthwhile sending their dollars. After those people noticing that, okay, there's some people getting to this platform. It's getting to a critical mass. We want to start adding more. More. A lot of the time. Most of the time, the ad dollars aren't arriving on the scene before people get there. And so you have to wait for the audience to develop before the ad dollars can follow. You mentioned, Minda, that social players have a lot of the. Especially meta has a lot of the ad spend and less of the time. However, in your report, you do note that social players like meta are trying to take a page from. From YouTube, YouTube's playbook, to capture more CTV time. Can they?
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C
Yeah, it's a really great question. I mean, I think. I think it's kind of a complicated Answer. On the one hand, their track record in this space, you know, when we look at TikTok and Instagram and Facebook's efforts to break into TV and better compete with YouTube in the past, they haven't been super successful. You might remember Facebook, watch, igtv. These are some of these efforts that, you know, clearly didn't really take off in the way that Meta probably had hoped. And so it has been a space that historically has been difficult for these purely social networks to break into, even though we know now that they are trying, or they reportedly are trying. That being said, I mean, I think now more than ever there is that this is the time for them to try. I mean, one thing that we're really noticing within the social space is that people more than ever are viewing social media as entertainment. You know, it's not a place to go anymore to connect with family and for just connect with family and friends or just post. You know, people are going there to watch, to watch video and they're, they're viewing it in a way that's very similar to tv.
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B
Also, there's sort of a double layer of irony of the social media social network companies sort of trying to emulate YouTube success on CTV, and that is that YouTube has actually been much worse than they are at monetizing their success. I mean, YouTube has become dominant. They're in the headlines a lot. Nielsen just declared them the sort of the number one TV power in terms of, you know, more. More people spend more time watching YouTube on TV than they spend watching anything else on TV. Yeah, YouTube is just far worse at turning that into ad revenue than the social network companies are. So they're, they're like, we gotta, we gotta emulate YouTube even though they're not really succeeding all that well.
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C
Yeah, even though we're the ones that, like, are monetizing way better than YouTube. So it is odd.
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B
It's odd. But then the second irony is that it's sort of like the social media companies are aware of what we're talking about here right now, and they're ne about it, which is that people are spending more and more and more time in front of those CTVs, and they're not spending more and more time on their phones looking at social media. So they are, they're kind of doing what we're telling marketers to do, which is like, get in front of where people actually are, because where people are is on the couch looking at the big screen. So they are trying to respond to that. But I agree with you guys Said like that doesn't seem like a very pleasant experience to be like scrolling your Instagram feed on your TV in the living room. Maybe they'll figure it out, I don't know.
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A
Yeah, they haven't cracked the code quite yet. But to your point, Ethan, they've definitely noticed a shift and our numbers point to that. And in these reports you can see nine point gap between CTV time, a share of CTV time versus social network time for people and that growing from 2023 to 2027, from a nine point gap to a 15 point gap. And so more time on CTV, a bit less time on social networks, but that gap is certainly growing. Mindy, you touched on something which I think is fascinating and wondering how people view it because people see it as social. Social networking or social media. But it has evolved, right? It was social networking, it became social media, then it was social audio for a few seconds and then social entertainment. And it really is entertainment. Entertainment is oftentimes best consumed on the big screen. And YouTube's been able to figure that out. Just as many Americans spending their time, Americans spending an equal amount of time watching YouTube on a mobile device as they are on a TV. And so as you said, TikTok and Instagram working on some TV apps. But we'll see what comes of that.
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C
Yeah, and there's a lot of unanswered questions. You know, will they pursue a more original strategy or will they more just try to. Will they focus on creators? Will they focus on just the algorithm and AI recommendations? I mean, there's so many different ways they could approach it and things they could roll out. So I think a lot remains to be seen.
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A
Ethan, let's end with this. In your piece you write that sub ott's unusual path to advertising has created major misalignment. So another misalignment in this part of the media and ad spend world. How come? Why is sub OTT on an unusual path when it comes to advertising?
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B
Yeah, I mean, this is my attempt to sort of let marketers off the hook because we all collectively spend just an absolutely enormous amount of time with Netflix and HBO and Disney and Hulu and Paramount and on and on and on and on. That's no surprise. What may be a surprise is that so as of this year, less than 4% of all advertising dollars will be going to those services, 96% elsewhere, even though clearly they are dominant parts of our culture and our society. And we are all, we, our eyeballs are glued to those services all the time. That's not A secret. So you would think that more ad dollars would be flowing that way if you want to actually get in front of where American consumers are. But of course I'll, you know, we'll let them off the hook because the advertisers off the hook because of course a lot of these streaming services were not available for years and years and years they were ad free. It's only subscriber service. So it's. Even if you wanted to put all your budget on this stuff, you were not able to. They didn't have the inventory that has changed. So I guess the new headline is like hey, hey man, that excuse is gone. Now all these guys are leaning heavily into their ad supported tiers. You can reach other than Apple TV plus you can reach everybody else. There's tons of inventory. Prices are actually going down because there's so much now. But the share is not really going up. It's going up a tiny little bit. So in the next couple of years we project about 4.1% instead of just under 4% of all money, of all ad dollars will end up in these streaming services is slightly more than 4%. So it's barely moving up. Even though of course money's flowing there. The growth rates look good. It's just that it's not nearly enough to keep up with what people are actually doing so that the time spent growth with streaming, OTT streaming is gigantic. There's going to be about a quarter of our day is going to be spent with these things and only 4% of ad dollars are going there. So there's a legacy explanation. You couldn't get in the door even if you wanted to. That explanation is gone now. There's lots and lots of ways to advertise.
- [19:32]
A
As you can see from the chart on the screen here. This is showing the percentage of time people spend with sub ott services, Netflix, Hulu, things like that versus the amount of ad dollars going to those services. And to Ethan's point, right now it's below 4% for the ad spend and only going to just above 4% in a couple of years time. Meanwhile, the time spent is just astronomically higher and continuing to rise and keep that gap between the two. Ethan, why aren't we expecting this up and to the right growth in ad spending now that a lot of new inventory has come online?
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B
Yeah, I mean I think this goes back to our sort of second point of the path dependency, the familiarity with social media. This is where it's always been. It's easier, right? You know, it's easier to advertise on Facebook than it is to advertising on Netflix is sort of. It's similar to advertising on television. Or you're gonna have to spend a lot more time and effort and money just making your ad. Maybe AI will solve some of this and maybe it'll all suddenly it'll be a lot easier for everyone just put out their AI slop that they can slap all over hbo. I hope not. In fact, I feel bad even revealing this discrepancy because the last thing I personally want is there to be more ads when I'm watching.
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A
No. If that happens, it's Ethan's fault.
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B
I'm obligated by my job to like, really? I'm just like, don't tell anyone. Don't tell anyone. It's fine the way it is. Yeah. No. So people are just used to doing what they're used to doing and it's just, it's easier to stick with what you've been doing rather than to do something challenging.
- [21:11]
A
And as you point out, this is the biggest gap right. Between ad revenues and time spent on any across any digital device category that we track easily. Yeah. And not getting smaller, as Ethan mentioned. Well, for Ethan's full report on US time spent versus ad spending 2025 and Minder's social specific version of that, click the links in the Show Notes or Pro plus subscribers connect to eMarketer.com that's all we have time for. Thank you so much to my guests. Thank you to Ethan.
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B
Happy end of summer. Yeah, sorry.
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A
Thanks to Minda too.
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C
Honestly, bring on fall.
- [21:50]
A
Yes, we're back. Thanks to the whole editing crew and to everyone. Thank goodness to everyone for listening in to behind the Numbers new marketer video podcast made possible by awin. Make sure you subscribe and follow and leave a rating and review. We'll be back on Tuesday. Happiest of long weekends.
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C
It.