Advertisers are spending less on linear TV and more on connected TV as audience viewing behaviour shifts towards streamers and on demand programming.
Shrinking audiences and rising CPMs are leading advertisers to spend more on CTV and other streaming platforms, including YouTube, which is eating more of linear TV’s lunch.
WARC’s latest Global Ad Trends: The changing shape of TV report explores a decade of ad spend data to understand linear TV’s decline and connected TV’s (CTV) reactive rise, it examines why definitions of ‘TV’ are fracturing, and considers how an array of forces within data, device and creative will shape its future.
Between 2014 and 2024, linear TV ad spend worldwide declined by 27.5 per cent in absolute terms – extending to a 50.8 per cent drop when adjusted for inflation. Linear TV now represents just 12.4 per cent of total ad spend ($143.9 billion), down from 41.3 per cent in 2013, and is expected to drop to 11.3 per cent next year to $139.1 billion – the lowest since 2005. In Australia, free-to-air TV accounts for about 25 per cent of ad spend.
The global video market – excluding social video and YouTube – is forecast to take a 15.9 per cent share of spend in 2025, per WARC Media forecasts.
Although linear TV still commands more than three-quarters of all TV investment, brands are rebalancing TV spend towards CTV, which now accounts for nearly half of all TV usage in the US.
There are sector variations: linear TV spend for tech and electronics has fallen by 42 per cent, while household and domestic products have increased by 12 per cent.
“There’s no doubt that Linear TV’s role is slowly waning, both in viewing and ad spend, as audiences shift to the expanding ecosystem of CTV. However, new players such as Big Tech and retail media sellers hope TV can help them win brand dollars, and smart TV makers are creating their own ad-funded TV channels,” Alex Brownsell, head of content at WARC Media said.
“As consumers move seamlessly from one form of video to the next, advertisers are being challenged to reappraise how they define TV – be it a specific type of video ad format, a media owner or simply the largest screen in the home – with important implications for planning and buying, frequency management and measurement.”
Eyeballs move to streaming, CPMs up
While TV audiences are shifting from linear to streaming, the changes appear to be starker among younger viewers.
In the UK, linear TV’s weekly reach has fallen by 10 percentage points since 2021, per Ofcom, standing at 73.8 per cent. In the US, older audiences still watch over two hours daily, versus 81 minutes for 16–24s, according to GWI data.
In Australia, around 61 per cent of total video viewing is via broadcast TV, with an additional 8 per cent of viewing on BVOD.
The decline in user reach has been accompanied by an acceleration in advertising costs in some markets.
WARC’s analysis shows a clear upwards trend in global average TV CPMs, especially in the US, Germany and UK. B&T understands that in Australia, network base rate cards have also been on the rise.
In markets like Brazil and Japan, linear TV CPMs are lower today than they were in 2012, according to figures from WARC Media, the World Federation of Advertisers and ECI Media Management.
TV’s definition conundrum
Consumers do not care about the definition of TV, seamlessly switching between video distributors and devices, but for advertisers the definition is hotly contested.
The fragmenting in both definition and delivery is impacting planning, which means how TV is bought and measured is also being rewritten, the WARC report found.
The platform that is taking advantage of the confusion most is YouTube. In February, YouTube CEO Neal Mohan declared: “YouTube is the new television”, because more YouTube is being watched on TV sets in the US than mobile phones and desktop.
This has been contested by the TV industry, which points out that how YouTube views are measured and advertising impressions are counted are vastly different to broadcast TV.
Nonetheless, in the US YouTube viewing on TV devices recorded a 12.8 per cent share, per Nielsen, rivalling broadcasters and streamers.
In 2024, YouTube earned $36 billion in ad sales across devices — dwarfing all four US broadcast networks combined. The platform is looking to acquire sports IP to sustain this momentum and expand into sitcom-style programming.
UK TV measurement body Barb, has begun to measure TV-set viewing of 200 YouTube channels, offering fresh insight into YouTube’s role as a TV player, but early results show relatively modest reach at a channel level with the top 20 dominated by kids’ shows.
Other forces shaping TV
Measurement maelstrom: As linear TV buyers and digital specialists often sit in separate siloes, with different ways of working, measurement remains “the great bottleneck”, according to WARC.
Broadcasters know that reach and frequency are no longer enough. In a world where Big Tech speaks directly to CFOs in the language of growth, TV ad sellers wish to prove outcomes, not just exposures. The industry requires more standardised and robust measurement across all forms of TV.
In Australia, OzTAM is the official currency for TV, but other measurement solutions are being developed. Foxtel is partnering with Kantar to produce its own total audience measurement solution, while some global streamers use their own measurement tools.
Rise of retail: The integration of retail data with TV promises to redefine how brands approach campaigns. By next year, global retail media spend is forecast to exceed the total TV market, according to WARC Media.
Retailers may increasingly assume the role of senior partners, with TV services an upper-funnel arm amidst a full-funnel proposition. Broadcasters know that reach and frequency are no longer enough. Retail data can help TV to prove outcomes, and not just exposures.
Creative reckoning: Less standardisation of non-broadcast ad formats means fewer reasons to treat the 30-second spot as default. Some brands are experimenting with interactivity like QR codes, shoppable overlays, and gaming integrations. AI will also be a disruptor.
Democratising TV advertising: Small brands are a key target for TV media owners. The largest brands in the world spend on average 3 per cent of ad budgets on TV; among smaller brands that falls to 9 per cent. A shift to programmatic selling in CTV may open the medium to a new share of advertisers.
