What’s Going On?
As the world continues to experience the unprecedented micro- and macro-effects of the coronavirus outbreak, advertisers are hard at work reevaluating marketing strategies given the rapid shift that has occurred in the daily lives of consumers and businesses. While it may seem easy to reach audiences considering a majority of the U.S. population is still under stay-at-home orders, the truth is, it’s not that simple.
Consumers have found themselves with the (bittersweet and potentially overwhelming) luxury of having the option to choose between all media devices for entertainment, whenever they choose. The media industry is eager to understand how the media consumption habits of millions of homebound families—from trending dayparts to viewing across traditional TV and streaming channels—have shifted over the last few months. Marketers are not only tasked with reaching their target audiences but also with understanding changing consumer attitudes and drivers of purchasing behavior.
Not all increased media usage is necessarily good for advertisers. Within the last two months, usage of video-conferencing apps, most predominantly Zoom, have significantly increased (think: a nearly 2,000% jump in weekend calls). The demand for these types of apps, including Skype and Houseparty, is driven by more people working from home and looking for ways to stay in touch with family and friends. Unfortunately, surges on these non-ad-supported platforms don’t offer any advertising opportunities.
The role of technology in the daily lives of consumers has transformed. Fifty-three percent of U.S. broadband households claim that they value technology more now than before, following the outbreak of COVID-19 and the resulting social distancing and stay-at-home orders across the country. So how exactly are consumers choosing to spend their time at home?
Battle for Screen Time
Driven by a combination of the current impact of the coronavirus crisis and pre-pandemic trends, the average time U.S. consumers spend with media will rise by more than one hour per day this year, to 13 hours, 35 minutes. It’s worth noting, however, that the increase in time spent is more of a temporary surge rather than a significant long- term transformation. During the outbreak, people have spent day after day at home where they’re surrounded by every device they own. This has likely brought a resurgence in media multitasking and helped push the time spent total higher.
TV Must Be Thriving, Right?
The biggest screen in the house is getting more attention than usual as families gather around the TV to either watch traditional broadcast and cable, stream video, or play video games.
Linear TV primetime (7pm-10pm) viewing was down 1.5% in April vs. the previous month. In that same time period, whole-day viewing was up 9.6% across all linear TV, and 10.2% for basic (non-premium) cable networks. This surge in overall time spent with linear TV is likely the product of increased daytime viewing, meaning that Americans are tuning out linear programming at night and likely opting for streaming content on OTT/CTV instead. The days of “Must See TV” are increasingly becoming a thing of the past, as viewers now tune in on their own terms rather than adhering to the institution of prime time.
Severely handicapped by the shutdown of new TV show production due to stay-at-home directives and the complete blackout of professional sports, Pay-TV has not seen the same surge. It is estimated that the losses for the quarter total 1.7m, leaving 70.4m Pay-TV subscribers heading into Q2. The six major MVPDs will lose an estimated 8m subscribers by the end of this year.
These changing habits make it critical that advertisers maximize the efficiency of their TV dollars and continue to use insights to find their audience across various modes of consumption.
Acceleration of Shift to Streaming
The streaming landscape continues to expand with new market entrants, as Peacock (NBCU) and HBO Max prepare to launch in the coming months. Earlier in April, short-form video service Quibi debuted, offering TV episodes that run approximately 10 minutes. About 40% of U.S. consumers are considering buying new media subscriptions.
In Q1, streaming viewership continued to skyrocket in the U.S., with time spent up by 57% year-over-year, led by mobile (up 67%), followed by TV (up 48%), and PC (up 18%). On-demand content drove the lion’s share of this growth, surging up 79% and capturing 72% share of viewing time in Q1. Bucking a multi-quarter trend towards connected TV dominating viewing growth, mobile netted the largest increase among devices in Q1, up 60% year over year overall with a massive 84% increase in on-demand viewing.
In Q1 2020, over 60% of U.S. broadband households had used a OTT subscription service in the last 30 days, about 30% had used an AVOD (advertising-based video on-demand) service, about 20% had used TVE, and 14% used a TVOD (transactional video on-demand) service such as Amazon Prime Video, FandangoNOW, and VUDU. These types of “on-demand” platforms will continue to see more growth as more content moves online, including new theatrical releases.
When there is a solid, fair value exchange, consumers will happily watch advertisements. AVOD services have been on the rise over the last few years, resonating with younger audiences who are more conscious of their monthly expenses. 66% of consumers 18 to 34 years old—the driving force behind the acceleration of cord-cutting—would watch ads while streaming a TV show if it lowers their monthly subscription costs. CTV creates the perfect environment for this value exchange, fueled by its high-quality content.
Time spent with digital video has surged across devices this year and will continue to grow the upcoming years. Seventy-six percent of online video watchers say they plan to consume as much content when the outbreak is over as they are now.
Sorely Missing Sports
One of the main reasons consumers would keep their cable subscription is live sports. Despite sports around the globe going on hiatus spurring a downturn in social content production, sports organizations drove large increases in social engagement in Q1. Quality ruled over quantity as sports posts volume dipped, but sports engagement has skyrocketed. The forward-looking partnerships forged between brands and publishers during this time will add more value when live sports returns and eager fans flock to view games however they can.
Social Media in Not-So-Social Times
In a time when “social distancing” is a frequently used term in everyone’s vocabulary, consumers are trying to stay connected with friends and family in whatever way they can. While higher engagement numbers may be promising for marketers, it’s important to note that these heightened levels may return to normal in 2021 and 2022.
According to Q1 earnings reports, Facebook, Snapchat, and Twitter saw double-digit increases in daily active users. Pinterest and Spotify saw increases in monthly active users.
The short-video app, TikTok, is experiencing a substantial boost during quarantine. The platform added more than 12 million U.S. unique visitors (app, mobile website, and desktop website) in March, reaching a total of 52.2 million, an increase of 48.3% compared to January. Average time spent per visitor for the app and websites combined was 476 minutes (nearly 8 hours) for the month of March. The company recently hit two billion app downloads worldwide. TikTok has been on a growth spurt for several months, even before the pandemic. These gains in usage may help drive more advertisers to experiment with TikTok.
Elsewhere in the social-sphere, LinkedIn is likely to see a gain in time spent as people who have lost jobs turn to the platform in their efforts to find new ones.
Content During COVID
Eighty-seven percent of Americans say they’re consuming more content and they’re doing so mostly via broadcast TV, online videos, and online TV streaming. Over the past few months, information on the impact of coronavirus has unfolded at a dynamic rate, causing a sense of urgency to absorb as many headlines as possible. News (to stay informed) and children’s content (to keep the kids entertained) are surging in interest. The entertainment businesses who thrive during the COVID and post-COVID eras will be the ones who can cater their offerings to accommodate the huge appetite for streaming kids content. Tubi’s launch of their app Tubi Kids is an example of businesses capitalizing on this opportunity.
In terms of mobile app usage, predictably, there has been less attention to apps for travel, weather and shopping. Other categories have benefited from the surge in overall digital time spent. Mobile social apps are a big gainer, rising from 41 minutes last year to 52 minutes this year. It is expected that mobile gaming apps will grow from 23 minutes last year to 26 minutes this year. Mobile audio app time is also expected to rise (to 59 minutes, vs. 57 minutes in 2019), but more slowly than in previous years as the decline in commuting has worked against digital audio time in general.
What Comes Next?
The economic fallout from the coronavirus pandemic will inevitably influence consumers’ behavior beyond 2020, including their time spent with media and how they choose to make purchases. No one knows for sure what the next few months will hold. Certain media consumption behavior may have more staying power than others. Will audiences become more accustomed to their new viewing methods or will churn rates accelerate as cost-conscious consumers return to normal consumption patterns? As consumers continue to look for new content, brands need to think about how to identify, reach, and activate new audiences that both increase market share and drive retention, even after the COVID-19 crisis is over.
How We See It: Pandemic Predictions
David Zapletal – Chief Innovation & Media Officer
“High performing content and media platforms will continue to thrive under COVID-19. People will spend more time at their familiar watering holes of content. On a positive note, the increased time spent with technological tools should boost personal productivity, which ultimately helps power part of our economic engine. Due to less in-person conversations and social interactions, people need to seek other ways to learn about new products and services. As a byproduct, the industry will hopefully see consumers engaging more with ads.”
- eMarketer, April 2020, U.S. Time Spent With Media 2020
- eMarketer, April 2020, U.S. Consumers Are Flocking to TikTok
- Variety, April 29, 2020, “Cord-Cutting Tracker: It Will Get So Much Worse in Q2”
- Parks Associates, May 2020, “COVID-19 will drive greater usage of TVOD services in 2020”
- Conviva, State of Streaming Q1 2020
- GlobalWebIndex, April 2020, Coronavirus Research Series 4: Media Consumption and Sport