As global audiences switch from traditional TV to streaming services, advertisers are moving with them.
For the first time, digital TV ad revenue in the US is expected to be greater than that of traditional TV.
Linear television has long earned the title of ‘most ad revenue’ when it comes to video content, but this has officially changed. Traditional TV’s downfall will likely continue for years to come as a new challenger proves its worth to global advertisers.
2024 is expected to be the first year that digital platforms will take a larger share of ad budgets in the US, but is this also the case worldwide, and what does it mean for content creators?
Before we explore the stats and the reasons for this shift, what is TV ad revenue?
What is TV Ad Revenue?
TV Ad revenue is the amount of money earned from placing ads in your content. In this case, how much do TV channels and streaming services make from advertising products?
The average 30-second slot on national US television can cost around $115,000, and this is ad revenue earned for the channel displaying the ad.
In this article, we’ll be looking at the ad revenue earned by linear TV vs. digital TV year on year.
Linear TV – Scheduled broadcasting and cable networks.
Digital TV – Streaming services and online video.
So, let’s look at the figures.
The Rise of Digital Ad Spend
While digital TV has increased its earnings by around 16% in the last year and is expected to continue increasing year on year by 12% in the US, these figures look a little different for global television.
TV Ad Revenue in the USA
Over the last five years, the US has seen a dramatic increase in digital TV ad revenue, moving from 29% of the total TV ad revenue share to 52% in 2024.
- 2020: 29%
- 2021: 38%
- 2022: 42%
- 2023: 48%
- 2024: 52%
2024 marks the first year of digital TV’s reign in the US, but what about the rest of the world?
TV Ad Revenue Worldwide
Digital TV ad revenue taking the largest share is new to the US, but the rest of the world experienced this shift in 2022.
- 2020 – 42.2%
- 2021 – 49.7%
- 2022 – 51.7%
- 2023 – 54.0%
- 2024 – 56.2%
Since 2022, the global share of digital TV ad revenue has continued to grow, and this is expected to be the same for America. But why is the US two years behind the rest of the world?
The Impact of Sports on TV Ad Revenue
The TV and video advertising market in the US is dominated by the extremely high viewership of sporting events, which are traditionally viewed on linear TV.
Let’s use the Super Bowl as an example…
In 2024, the Super Bowl had a viewership of 123.5 million, and a 30-second ad would have cost about $7 million. The cost of Super Bowl ads has seen an almost continuous rise over the years.
- 2020 – $5.6 million
- 2021 – $5.5 million
- 2022 – $6.5 million
- 2023 – $7 million
- 2024 – $7 million
Regardless of linear TV’s dwindling share of ad revenue, sporting events typically thrive on traditional TV in the US, and this is likely the main reason for US TV reaching this digital milestone later than most other countries.
However, as more and more audiences elect to view the event on streaming services, the Super Bowl might not be able to save traditional TV in the future.
Why are Digital TV Ads More Popular Than Linear TV Ads?
Beyond the simple rise in audience viewership, digital TV advertising has become more popular than linear TV for a few reasons.
Targeting capabilities are one of the main benefits of digital TV ads, allowing businesses to be much more specific regarding who they want to advertise to. On traditional TV, advertisers have to assume the identity of the audience watching certain content, but on digital platforms, data allows those same advertisers to make more informed choices based on what they know of the audience, such as demographics and interests.
Analytics allows advertisers to measure the success of ads, meaning businesses can apply their budgets to what they know is working for them. This function is not available on linear TV.
Customisation is another reason to go digital. Linear TV generally offers 30-second slots as standard, with a fixed duration of the total ad break. Digital TV advertising offers more flexibility, giving businesses the opportunity to change ad length and format. Some digital TV ads can be minutes or tens of minutes long, with a skip option.
Cost-effectiveness is the final benefit. On traditional TV channels, you will usually pay per 1000 views based on average viewing figures, duration, time of day, day of week, etc. Digital options let advertisers pay per click or impression. Only paying for the engagement you actually receive rather than typical averages leads to unsuccessful ads costing less for businesses.
What Does Dubbing Have to Do With It?
Dubbing is another reason advertisers are flocking to digital platforms. Globalised content allows businesses to find video content that works for them and advertise internationally in all language variations.
This also lets local brands advertise using content they would not normally have the option to. Now that most streaming platforms are using dubbing services to amplify their reach, they can simply place their ad on the dub for their region.
This is only further amplified by the new trend in streaming platforms displaying more ads, even to those with subscriptions.
Dubbing, therefore, provides value for content creators through an increase in ad revenue and heightened views on their own projects while also benefitting advertisers through global reach.
Conclusion
The shift from linear TV to digital platforms is not only evident in the US but also globally, with the ad revenue earned from digital TV surpassing that of linear TV. While the US lags behind due to the dominance of sporting events on traditional TV, the rest of the world embraced digital advertising a few years earlier.
The popularity of digital TV ads stems from their targeting capabilities, analytics, customisability, and cost-effectiveness compared to linear TV ads. Digital TV’s ad revenue has, therefore, become more profitable than that of linear TV.
Additionally, the localisation of content facilitated by dubbing services offers more options for advertisers and content creators alike, creating new opportunities for revenue generation and audience engagement in the ever-evolving landscape of television advertising.
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