Research

Q1: Media Landscape in Review

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Q1 2023 Uncovered: In-Depth Insights into the Advertising Landscape

Dive into our comprehensive high-level look at some of the most salient trends we’ve observed in the first quarter of 2023, curated to bring clarity to the fast-moving world of performance advertising. Each section covers key developments from our core pillars: Streaming Video & Audio, Linear TV, the overall Ad Economy, and Consumer Economy.

Streaming Video & Audio

The initial introduction of advertising in ad-free premium video by Netflix and Disney+ was met with slow adoption rates, but Netflix’s Basic with Ads tier is gaining ground, generating more revenue per subscriber than the ad-free Standard tier.
Publishers are shifting focus toward revenue rather than subscriber growth, and some streaming companies are exploring content licensing to make up for mounting financial losses.

Linear TV

Viewership for awards shows like the Oscars and Grammys is rebounding but it’s still not back up to pre-pandemic levels.
The Regional Sports Network (RSN) system has struggled due to cord-cutting, leading to the bankruptcy of the largest group of RSNs, Diamond/Bally Sports. The decline of RSNs is just one hit in a series of blows dealt to sports on traditional television, with momentum headed toward streaming.

Ad Economy

Ad market spend continues to decline YoY, with March marking the ninth straight month of declines. Marketing research and consulting company Magna revised its 2023 US ad spending growth projection down from 3.7% to 3.4%, but expects a pick-up in investment in the second half of the year driven by ad-supported video streaming.
The loss of deterministic user-level data has become a pressing issue for advertisers, and in response to this challenge, initiatives such as the Android Privacy Sandbox and Total Cookie Protection have emerged in the first quarter. These developments aim to address the growing concerns surrounding user privacy while maintaining a balance between targeted advertising and respecting individual privacy rights. Chrome is slated to block all 3P cookies in Q3 of 2024.

Consumer Economy

Retail sales grew 3% in January, the largest gain in almost two years, but then slid in February and March, once again surfacing worries of a cooling economy.
The labor market is experiencing a slowdown and indicators are flashing that labor demand is weakening, which could moderate wages further, in turn potentially pushing inflation rates down.

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