TV Advertising Unwrapped: Your Guide to A Successful 2023 Holiday Season
‘Tis the season for advertisers to start planning their holiday campaigns. With an estimated 1.328 trillion in holiday sales on the line for brands this year, the stakes are high to capitalize on this golden opportunity.
But with competition tight, making the most of the season will be a challenge. To outpace competitors, advertisers must stay ahead of the trends set to take hold in Q4. What industry challenges should they expect to face? Will viewers continue to shift towards streaming and will the opportunities to reach them through advertising increase dramatically?
In order to help brand marketers, retailers, and other holiday-period advertisers stay top-of-mind with audiences and execute strategic, rather than reactive, end-of-the-year TV campaigns, we’ve created this guide to ensure you can make the most of your ad budgets – and outfox your competition – no matter how chilly the headwinds may become.
Keep this guide in your back pocket — download it here.
What Do Holiday Shoppers Look Like (On TV)?
Before we dig into how viewers behaved during the holiday season, it helps first to understand what they look like. Here’s what you need to know about Black Friday shoppers on TV.
1. They skew older
We see an even distribution of households across middle-aged demographics, but those percentages slightly spike at ages 65+. This raises the question: Are Black Friday shoppers aging?
2. They’re largely lower to middle class
Pew Research Center defines middle-income as an annual income of $52,000 to $156,000 for a household of three, while lower-income is defined as households that earn less than $52,000.
Assuming each household represented in our data accounts for two or more persons, we can see that Black Friday shoppers are largely lower to middle class. This makes sense — Black Friday shoppers are often price-sensitive due to budget constraints and want to take advantage of the massive deals available during that period.
3. They aren’t ready to completely cut the cord just yet
Many advertisers have adopted a black-and-white mindset, believing linear TV is over thanks to an explosion in connected TV. But our data shows most viewers aren’t ready to completely cut the cord.
A whopping 84% of Black Friday shoppers are reachable through connected TV — 26% exclusively watch ad-supported streaming while 57% watch a mix of streaming and linear TV.
The size of the linear TV audience is nearly as large. 74% of Black Friday shoppers are reachable through linear TV — 16% are exclusively reachable through linear TV while 57% watch a mix of both. With this in mind, advertisers should think cross-channel first.
A cross-channel strategy requires careful planning and a thoughtful strategy. Notice how 57% of Black Friday shoppers are in both linear and connected TV households — a big share of the total audience. Treating linear TV and streaming as separate siloes means advertisers may end up reaching the same households across linear and connected TV again and again.
Specifically, with $1M in TV budget today, you would only reach 12.3M of Black Friday Shoppers through CTV alone. Using Iinear alone, you would reach 51.9M viewers.
Tip: Want to drive reach even further? Make the most of today’s technology, like Simulmedia’s powerful TV+ platform. With powerful predictive analytics and an audience-based approach, TV+ can help holiday advertisers run a cross-channel campaign. Our theoretical $1M buy outperforms buying CTV alone by an additional reach of 44.3M Black Friday shoppers and outperforms buying linear alone by an additional 4.72M. In total, our holistic, cross-channel buy lets brands reach 56.6M Black Friday shoppers.
4. Linear TV Dominates Their Daily Viewing Time
Linear TV is far from over. A look at the chart below shows linear TV accounts for 78% of daily viewing time across ad-supported channels, while streaming only comprises 22%.
Why the discrepancy? A majority of streaming content is still consumed on non-ad-supported channels — think of SVODs like Netflix’s non ad-free tier. In other words, advertisers may have a growing opportunity to reach audiences on streaming, but linear is still the most viable channel.
5. They can be reached using a combination of low-cost and high-viewership networks
What are the networks and streaming apps where marketers can reach Black Friday shoppers? Here’s what our TV+ platform found.
Popular networks and apps are all great candidates for advertisers’ holiday media plans, such as:
- ABC (6.84% viewership)
- NBC (6.57% viewership)
- Paramount (24.40% viewership)
- Peacock (7.45% viewership)
But advertisers can also cut costs by leveraging cost-efficient networks and apps that have slightly lower levels of viewership and lower CPMs. For instance, on the linear side, FOXNEWS has 5% viewership and MSNBC has 3% viewership, but relatively low CPMs. Streaming apps with low CPMs but high viewership include Paramount (24%% viewership) and Hulu (6%).
By creating a media plan that leverages a combination of higher reach and cost efficiency, advertisers can maximize reach without splurging on pricier networks and apps.
Viewer Behavior During The Holidays: What Our Data Tells Us
Some holiday trends across the TV landscape are predictable — ad spend will increase, holiday movies will garner attention, and so forth. But there’s a whole lot more to uncover about the viewer behavior during the holiday season.
We dug into the data using our powerful TV+ platform and uncovered the following.
1. Linear Should Be A Part Of Any Advertiser’s Holiday Campaigns
We first analyzed how ad-supported viewing duration evolved from the ‘21 to ‘22 holiday season across linear and ad-supported connected TV.
Across age cohorts, we saw streaming’s share of ad-supported viewing duration increase and linear’s share slightly decrease YoY. But linear still makes up a significantly bigger share of minutes across the board — over 70% of viewing minutes shared across all age cohorts.
While advertisers can tap into a growing potential to connect with viewers through streaming platforms, it's essential to recognize that traditional linear TV remains the most reliable advertising channel.
A closer look at the actual number of minutes shows just how much more linear dominates ad-supported TV viewing time. But it also shows another trend — viewers are watching less and less TV YoY. We saw a decrease in total minutes viewed across both streaming and linear. While streaming decreased 13.1% YoY overall, linear decreased 25.29% YoY.
Advertisers must be selective in where they run their ads to reach their audience in the limited time they’re actually watching TV. Think of targeting viewers where they’re actually watching — not just the most popular networks. An audience-based approach ensures that ad spend is maximized during this critical period.
2. Linear holiday programming is more volatile than streaming
A look at viewing duration on Hallmark, a top network for holiday programming, highlighted a stark contrast in viewing behavior on linear and streaming TV. The graph below compares the linear network Hallmark Movies to Peacock and YouTube TV — two streaming apps where users can watch the Hallmark channel.
Viewing duration increased month over month during the holiday season for both linear and streaming. But while streaming steadily increased from the 2021 to 2022 holiday season, linear shrank. On the linear side, Hallmark’s viewing duration decreased by 42%. Streaming apps, on the other hand, increased by 152% YoY.
But that’s not all we found. From October 2021 to December 2021, viewing duration on streaming apps increased by 17.40%. Similarly, streaming increased by 19.48% in MoM for the holiday season in 2022.
We saw a starker contrast in viewing duration on Hallmark’s linear channel. From October to December of 2021, viewing duration increased by a staggering 54%. The following year, viewing duration increased by 42%.
As audience viewership patterns undergo significant shifts across linear networks, advertisers can adapt by consulting trusted partners for guidance on budget allocation.
3. FAST apps are gaining steam
We also analyzed the most popular streaming apps during the ‘21 and ‘22 holiday seasons according to unique households reached.
Not surprisingly, YouTube took first place. The increase in the number of households viewing YouTube during the holiday period of 2021 vs. the holiday period of 2022 was 130%.
But other apps are following close behind. FAST apps saw rapid growth in unique households reached YoY. For instance, Tubi TV saw a staggering 337% increase in growth — the highest growth rate among the top apps.
A look at viewing duration across a sample of FAST apps further proves their growth. In 2022, viewers consumed ~2 billion hours of content via FAST apps. As of September 2023, that number doubled — viewers have consumed ~4 billion hours so far.
With this in mind, FAST apps should be on every advertiser’s radar. But be aware — transparency has become quite the issue in the TV landscape, and FAST apps are no exception.
Here, inventory can be sold by a number of parties, including FAST aggregators: sellers who aggregate and bundle programmatic inventory from smaller players. Understanding where inventory is sourced from within these bundles often becomes quickly confusing.
But buyers lack the incentive to check the quality of their inventory because they’re under pressure to buy connected TV at the lowest prices. Even when a CPM may seem too good to be true, discounts are tempting enough to take the risk.
As brands gear up for the holiday season and witness the surge in popularity of FAST (Free Ad-Supported Streaming TV) apps, it's high time for advertisers to stay mindful of an evergreen challenge. Remember to resist the temptation to buy solely based on lower CPMs. While saving costs may seem like a good idea at first glance, it's crucial to keep in mind that going for lower-quality inventory could end up having a detrimental impact on a campaign's long-term success.
4. Linear TV ad spend has slowed down, but not dramatically
The verticals with the biggest spike in ad spend during the holiday season are toys, department stores, and jewelry, gift stores and galleries. A look at the graph below, comparing these verticals’ linear TV ad spend WoW, shows that overall linear TV ad spend peaked in 2021’s holiday season. More specifically, total linear TV ad spend from the 2020 to 2021 holiday season increased by 3.62% and then shrank 17.14% the following year.
But while total linear TV ad spend during the holidays decreased overall, a closer look at each vertical shows varying trends.
Jewelry, gift stores, and galleries, for instance, saw the biggest spike in linear TV ad spend YoY from the 2020 holiday season to 2021 — nearly 60%. The following year, the vertical’s linear TV ad spend dropped by 27.1%.
Linear TV ad spend by department stores, on the other hand, was far less volatile. It stayed roughly the same from 2020’s holiday season to 2021 — decreasing by just 1%. The following year, it decreased by only 12%.
Toys saw the biggest decrease in linear ad spend. The industry’s linear ad spend decreased roughly 7% from the 2020 to 2021 holiday season and 47% the following year.
Our Predictions for This Year’s Holiday Season
1. The Writer’s Strike Will Demand More of Unaffected Programming
The writer’s strike coupled with the SAG actors’ strike has been a hot topic throughout 2023. While cable programming should be relatively unaffected in the fall and winter, broadcast prime will likely feel the strike’s impact in autumn as the new broadcast season kicks off. The previous strike of ‘07 resulted in a 25% reduction in primetime scripted programming for the 2007-2008 season. Filming schedules are largely to blame for this. Network prime shows film in the late summer and autumn while cable shows wrap up filming earlier.
A lack of new programming threatens viewership levels across all TV. This raises the question: Will networks attempt to make up revenue by increasing CPMs, as they have done historically?
We’re beginning to see signs this may be the case for unaffected programming. For instance, live sports and reality TV, which proved to be a viable strategy for broadcast in the last strike, are gaining traction as an alternative to scripted programming yet again. Take NBC, whose fall lineup has already shifted to take into account delays in filming. Series planned to premiere in the fall, such as Night Court, are now on hold. Instead, the network has shifted its focus to unscripted programming, including a two-hour premiere of The Voice. As advertisers flock to unaffected programming like sports and reality television, CPM inflation and upward pricing pressure are likely to occur.
Currently, it looks like a deal has been struck at the time, but the details have not yet emerged. It's hard to predict what impact this will have on the 2024 lineup. Regardless, those looking to advertise during this year’s holiday season — feel confident that it’s possible to still reach audiences even in the aftermath of the writer’s strike, but realize certain inventory may be pricier than normal. Consider leveraging alternative, less expensive networks where your strategic audience may be. Simulmedia’s TV+ platform can help find audiences in more cost-efficient content where their attention is underpriced.
2. Inflation is on the decline, but consumers remain cautious
Inflation is slowly but steadily declining. J.P. Morgan reports inflation for core goods fell from 12% to 0.8% over the past year, while core services slowed to 6.1% in July. Better still, June’s inflation rate hit its lowest in more than two years — just 3%.
Despite the good news, Americans are still price-sensitive. Experts forecast excess savings gained during the pandemic will likely be depleted in the third quarter of 2023. Without this safety net, Americans remain cautious when it comes to splurging. We can see this reflected in The U.S. Index of Consumer Sentiment, which currently sits at 69.5 — the second-highest rating since December 201. But this positive trend is starting to dip, as the index dropped by 2.8% between July and August. In other words, consumers are cautiously optimistic.
Bearing the brunt of inflation and post-pandemic woes in past years, consumers have learned the value of a good deal. Rather than slow down spending, consumers are instead finding ways to be savvier than ever when doing their holiday shopping. Research by eMarketer shows the holiday 2022 season was dominated by discounts, and holiday shoppers are likely to seek out deals just the same this holiday season. With the exception of furniture and bedding, all retail categories saw a steep spike in discounts last year.
Amazon’s Prime Day gives advertisers even more insight into future holiday shopping behaviors, with many now calling the day a “bellwether” event for the upcoming season. Among categories shopped, electronics and clothing/apparel were the most popular, according to NielsenIQ. Another interesting category that saw growth is everyday essentials, including groceries, personal care, and other nonessential goods.
This further proves the recessionary mindset Americans are adopting. Though consumers are willing to continue to shop, it’s not without a strategy — calculated splurges and smart deals have replaced indulgent purchases and hefty price tags.
What does this mean for advertisers? Ad creative should resonate with consumers and their desire to save on spending. And with consumers savvier than ever, advertisers should take time to devise a thoughtful targeting strategy. Viewers are likely to be even quicker in tuning out messages that don’t make sense or aren’t relevant.
3. Holiday Shopping Starts Earlier Than Ever
The holiday season is now marked by two heavy-spending tentpole events, pulling holiday shopping well into October. The first, Amazon’s Prime Early Access Sale, has caught the attention of those looking to get ahead of their holiday shopping. Data shows that October e-commerce sales increased by 9.8% thanks to the Prime Early Access Sale, while e-commerce sales in December dropped 8.8%.
Black Friday is also a critical shopping holiday event. eMarketer found that brick-and-mortar retail stores saw a whopping 72.9 million shoppers on Black Friday — a strong rebound from years past. E-commerce sales resurged as well. Cyber Monday hit a new sales record of $12.43 billion, while Black Friday saw nearly $10 billion.
Brands that are new to TV advertising — know that there is a considerable halo effect of TV advertising on digital channels. For example, an Accenture study found that TV lifts digital ROI by 22%. TV advertising also drives a halo effect across sales channels, whether it’s e-commerce or brick-and-mortar.
4. Political campaigns will reflect a shifting TV landscape
Campaign spending in the 2022 midterm election doubled that of the 2018 election, reaching a whopping $8.9 billion. And advertising for the 2024 election is well underway. Approximately $70 million has already been allocated to the presidential competition, with a specific focus on cable news networks and states holding early primary elections.
TV advertising, specifically local linear and connected TV, is a critical channel for political campaigns — 81% of voter reach is driven by traditional TV. While national linear rates will remain largely unchanged, CTV and local linear rates are likely to increase as political advertising hits the market. Battleground states will be most affected, with inventory availability issues expected to arise in these areas as we near the election.
Knowing this, advertisers should prepare accordingly. Consider securing local inventory in hotly contested states for political advertisers in advance — and be prepared to face higher rates on local linear and connected TV during Q4.
5. The rise of ad-supported streaming services (and fragmentation)
According to Kantar’s Entertainment on Demand study, paid, ad-supported video-on-demand (AVOD) is the fastest-growing service in streaming, with FAST closely trailing behind. In Q1 of 2023, paid, ad-supported streaming gained 2.6 million subscribers, while FAST gained 1.7 million subscribers.
A proliferation of ad-supported streaming services is to thank for this growth — the last year has seen several new players enter the ad-supported streaming world, including Netflix and Disney+.
This explosion of streaming services is likely to further exacerbate TV fragmentation, which is already a cause for concern among advertisers. A survey by eMarketer shows among the challenges to be cautious of, viewership fragmentation ranks highest.
Ad-supported streaming is not the only culprit for an increase in TV viewership fragmentation. The writer’s strike, as we mentioned earlier, will likely lead to a delay in anticipated prime TV shows slotted for the fall season.
To compensate, viewers will likely turn to streaming services where they have access to comprehensive libraries. Rather than stop watching altogether, they’ll adjust their viewing habits — whether that’s tuning into old reruns or branching out of their comfort zone to explore shows they
haven’t considered before trying out new FAST channels.
The big takeaway? Advertisers can reach streamers more than ever, but a smart strategy will be crucial to capitalizing on this trend.
Developing Your Holiday Advertising Game Plan
1. Work Smarter, Not Harder
Own a brick-and-mortar store? Aiming to drive upper funnel metrics? You’ll want to listen to John Philip Jones, professor at the Newhouse School of Public Communications, who explained that one exposure to a brand message in the week before a consumer’s purchase has a far greater impact on brand share than additional exposures.
With sales and purchases at an all-time high during the holidays, advertisers would be keen to serve ads within or before the week a consumer does their holiday shopping. In other words, advertisers must focus on recency — or ensuring the ad exposure is as close to when they purchase as possible.
“The shelf space model of advertising is a very different world for the media planner. It emphasizes reach and ignores frequency. It uses dispersion, not targeting, moderate GRP-levels and continuity, not GRP-concentration and flighting, and it thinks about incremental cost-per-target-reach-point, not just target CPM.”
How can advertisers reach consumers just as they’re about to make their holiday purchases? Maximizing weekly reach is key. Think of your ad as a product you place on the shelf of a store. You don’t know when they’ll buy, but you want to be there when they do. Maximizing weekly reach ensures your product (or ad) is there when they need it.
This can be challenging during tentpole events, like holiday programming, when impressions are higher than usual — 92% of households tuned into holiday programming last year, with viewers watching 20 hours of shows on average. Buying too many of these holiday programs is likely to expose your ad to the same audience over and over again. To avoid over-exposing those you have already reached, advertisers should focus on more than maximizing GRPs.
Why? At some point, it becomes far easier and cheaper to increase frequency rather than finding new viewers that fit your strategic audience. GRP treats frequency as equal to reach, even though a unit of incremental reach is far more viable than an increase in frequency.
But reach isn’t a KPI for every marketer. For brands whose audiences plan to do their shopping online, lower-funnel outcomes are typically more important — think of attributing online sales to TV campaigns. In these instances, advertisers can make the most of the holiday shopping season by leveraging attribution and automated optimization to determine the networks, creative, dayparts, and day-of-weeks that are actually driving visits and purchases.
2. Drive Awareness + Build Retargeting Lists Early
Start your campaign in October or early November to test and learn which creatives, dayparts, networks, programs, and creatives are generating the optimal performance for your brand before the holiday season peaks. Driving awareness early will also allow you to retarget site visitors that TV drove across other channels.
3. Apply Learnings + Scale to Performance
Apply learnings from the initial campaign flight fast by buying more of what works and cutting what doesn’t, as well as optimizing your spend across linear and CTV. Scaling up spend entering Black Friday/Cyber Monday (BFCM) and beyond is vital to find new pockets of your target audience across the TV landscape and for your brand to stay top of mind for prospective consumers.
4. Stay Top of Mind
We typically see inventory availability tighten up during the 8 weeks between Halloween and Christmas, also known as the hard 8. Advertisers should err on the side of caution and lock in inventory early — even inventory in the supply market tends to tighten up as the holiday season approaches. Doing so ensures you won’t miss out on driving brand awareness and down-funnel KPIs during the biggest shopping periods of the year in Q4.
5. Ring in the New Year
According to the 2022 Meta Holiday and Mega Sale Days Marketing Guide, 41% of holiday consumers report that their shopping will continue past the season. So, while other brands go dark post-Christmas, take advantage of TV inventory availability in the week before New Year’s to continue reaching and activating your customers so you can start 2024 on the best possible note.
Wrapping Up: Successful Holiday Campaigns for Your Brand
With considerable consumer interest on the line, marketers should ensure that their TV advertising partner can help them craft strategic campaigns that provide the flexibility and reach they need to make the most of this holiday season across both linear and CTV.
Simulmedia’s TV+ combines robust data science, automated software, and integrations into one platform, bringing predictability, performance, and seamless integration with business operations to TV advertising — similar to that of paid search and social media. Empowered by TV+, advertisers and marketers can navigate an increasingly fragmented landscape and find holiday viewers where and when they’re watching.
Is a successful campaign at the top of your wish list? Schedule a demo with one of our experts.