Next in Media Episode Summary: "Where YouTube is Ahead of the Other Streamers on Ads"

Release Date: January 21, 2025
Host: Mike Shields
Guest: Ross Benech, Senior Analyst at eMarketer

Introduction

In this episode of Next in Media, host Mike Shields engages in an insightful conversation with Ross Benech, a senior analyst at eMarketer. They delve into the evolving landscape of media advertising, focusing on streaming platforms, advertising trends, and cultural shifts. The discussion also touches upon Ross's new book, "1999, the Year that Low Culture Conquered America and Kickstarted Our Bizarre Times."

Streaming vs. Linear TV Advertising

Mike Shields initiates the conversation by highlighting the rapid growth of streaming and Connected TV (CTV) advertising. He points out a seeming contradiction: while streaming and CTV advertising are booming, linear TV still holds a strong position in terms of advertising revenue and viewer engagement.

Ross Benech clarifies this by explaining the disparity between time spent and advertising time:

"There's a few ways to look at how fast has streaming grown. If you just look at time spent, it's almost 50% of all time spent with television... But if you look at advertising time spent according to data from comScore, it's closer to like 15%." (02:38)

Despite the increase in streaming inventory, linear TV remains dominant in ad revenue because streaming platforms often have lighter ad loads, and many viewers, especially on platforms like Netflix, prefer ad-free experiences.

Ad Spending and Targeting in Streaming

When discussing where the current ad money is flowing, Ross notes that traditional advertisers dominate streaming ad spend. Major brands continue to invest heavily in streaming ads, especially around high-profile events like sports broadcasts.

"Most of the money has been those traditional advertisers. ... the same brands you'd see on TBS, on CBS or Fox." (06:12)

However, there's a shift underway as streaming services like Roku, Disney Plus, Comcast, and Paramount are increasingly targeting small to mid-sized advertisers. This diversification introduces more performance-driven and creative advertising approaches, moving beyond the traditional big-brand focus.

YouTube's Dominance in the Ad Market

YouTube stands out among streaming platforms for its advanced targeting capabilities. Ross emphasizes that:

"On YouTube they are the ones to do it the best. ... maybe in the market for Geico Insurance, probably not." (08:41)

Unlike other streaming services where ads can feel repetitive and less relevant, YouTube leverages user data effectively, providing more personalized and timely advertisements. This makes YouTube a preferred platform for advertisers seeking precise targeting, setting it apart from other streaming competitors.

Challenges with Metrics and Measurement

The conversation shifts to the complexities of streaming metrics and measurement. Ross expresses concern over the lack of consensus and the overwhelming number of options available to advertisers:

"There's probably more confusion than happiness... each advancement, each new product is nice in a press cycle... But the, to appease the advertisers anxiety, I don't think we're making much progress on that end." (10:44)

Advertisers grapple with fragmented systems, inconsistent metrics, and the absence of centralized buying processes. This fragmentation hampers the ability to accurately measure campaign effectiveness across different streaming platforms.

AI in Media Buying and Optimization

Mike introduces the topic of AI-driven media buying, highlighting its rise alongside generative AI trends. Ross provides a critical perspective:

"Brands ready do put a lot of their money in automated systems they can't control... the use of AI isn't necessarily new... it's like the Simpsons when they had the new Malibu Stacy and they just changed the accessory slightly." (12:42)

He argues that much of what's marketed as AI in media buying is merely rebranding existing programmatic advertising tools. While AI has the potential to enhance media buying, Ross remains skeptical about its transformative impact, viewing it as an incremental evolution rather than a fundamental shift.

Ross Benech's Book: "1999, the Year that Low Culture Conquered America and Kickstarted Our Bizarre Times"

Ross shifts the discussion to his new book, which explores the cultural transformations that began around the year 1999. He reflects on how seemingly trivial pop culture phenomena have significantly influenced today's societal landscape.

"There's a lot of the most derided aspects of 90s culture visible all around us all the time... national politics basically function like a Jerry Springer talk show segment." (15:44)

The book examines the lasting impact of 90s pop culture, including reality TV, pro wrestling, and the rise of the internet, arguing that these elements have shaped current media and political discourse.

Cultural Shifts and Media Evolution

Ross discusses the cyclical nature of cultural panics and shifts in media consumption:

"The time you're living in is always perceived as the worst time as far as moral standards. ... We're 25 years from the late 90s now, and so the late 90s are what's fashionable because the people who are in charge of media companies are of that age now." (17:23)

He highlights how each generation’s formative experiences influence current media trends and societal norms, suggesting that concerns about today's media are paralleled by similar anxieties in past decades.

Predictions and Future Trends in Advertising

Looking ahead to 2025 and beyond, Ross shares his predictions for the advertising landscape:

1. Expansion into Live Sports: Platforms like Netflix are experimenting with live sports, signaling a potential shift in sports broadcasting rights. Ross anticipates Netflix securing significant sports rights deals, similar to Amazon's endeavors.

   "I'm expecting... at some point, Netflix is going to dip their toes in the water and get a big sports rights contract." (24:00)

2. YouTube's Continued Growth: Despite not securing NBA rights, YouTube remains a dominant global platform. Ross believes that YouTube’s flexible, a la carte offerings could drive massive viewership if they push for more exclusive content.

   "If YouTube did that and put it for free, oh my God, the viewership would be crazy." (26:12)

3. Integration of AI in Programmatic Buying: While AI will continue to be integrated into media buying, Ross expects it to remain an extension of existing programmatic systems rather than a revolutionary change.

Conclusion

The episode concludes with Ross promoting his book and sharing insights on where to find it. Mike Shields thanks Ross for the engaging discussion, highlighting the importance of understanding both the technological advancements and cultural undercurrents shaping the media landscape.

Ross's analysis underscores the complex interplay between traditional advertising paradigms and the disruptive forces of streaming and data-driven marketing. As the media ecosystem continues to evolve, platforms like YouTube are positioning themselves at the forefront, leveraging advanced targeting to stay ahead in the competitive advertising arena.

Notable Quotes:

• "Streaming time spent is going to eclipse linear very soon." — Ross Benech (02:38)
• "Most of the money has been those traditional advertisers... same brands you'd see on CBS or Fox." — Ross Benech (06:12)
• "YouTube is the most consumed video service in the United States." — Ross Benech (10:18)
• "The share of advertisers who are convinced that YouTube is TV is just continue to grow." — Ross Benech (09:42)

For more insights into the ever-changing media landscape, subscribe to Next in Media and stay updated with conversations led by industry experts like Ross Benech.