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2023 MediaRadar Prediction: Media & Entertainment Advertisers Course Correct as the Pandemic Wanes

As we kick off the new year, we’re covering trends from key markets in 2022. We’ll recap the state of each industry over the past year, the ad strategies of its biggest players, and what we predict 2023 will hold.  

Total revenue from the entertainment industry is projected to surpass $29b in 2022, representing an increase of more than 177% YoY from 2017. By 2026, revenue could reach $40.74b. 

Unsurprisingly, we can attribute much of that growth to the pandemic when entertainment was in short supply. For billions of people, streaming services, entertainment websites, films, and TV shows were a way to stay positive during lockdowns. 

The appetite for entertainment forced the hands of advertisers, but with the pandemic waning and people depending less on these outlets for amusement, how are they responding in 2023?  

Let’s find out. 

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MediaRadar Insights on Media & Entertainment Advertising in 2022

Media and entertainment advertisers, including those from The Walt Disney Company (Disney), Amazon, and HBO, spent more than $20.7b on ads through November 2022, representing a 21% YoY increase from 2021.

As expected, the digital-first entertainment world demanded a big investment in digital ad formats. Through November, media and entertainment advertisers sent 64% ($13.2b) of their dollars to digital formats. Disney, for example, promoted Black Panther: Wakanda Forever with campaigns built on the back of almost exclusively programmatic ads. 

The remaining dollars from these advertisers went to TV (33% or $6.9b) and print (4% or $765mm). It’s impossible to ignore the industry’s shift to all things digital, but it’s also impossible to overlook its roots in linear TV.

While linear TV is definitely losing its luster, media and entertainment advertisers clearly still consider it a strategic pillar. Overall, ad spending stayed steady in 2022, never dropping below $1.5b a month, which indicates the industry’s staying power in society—something we can expect will continue in 2023.

That said, the biggest jump came in Q1 to the tune of 54% YoY. Q2 followed relatively closely, posting a YoY increase of 26% (Q2 was down by 8% MoM).  

The H1-heavy buys are telling and could point to the greater strategies of TV- and film-related advertisers—strategies that rely on Q1 and Q2 to build excitement for fall premieres. 

The big spending at the end of the year tells a similar story—one that has advertisers gearing up to launch new shows and films in the new year. 

Top Entertainment Advertising Categories in 2022

Through November, five media and entertainment categories accounted for more than a quarter of the investment ($5.9b): subscription streaming services, drama TV shows, drama films, entertainment websites, and game titles. 

Subscription streaming services 

After a steady rise to fame over the past several years, thanks to the rising cost of traditional cable and demand for content at the snap of a finger, subscription streaming services, including Amazon Prime Video and Disney+, witnessed even more growth during the pandemic.  

In fact, global streaming subscriptions topped 1b in 2022. Although growth isn’t what it once was, advertisers are still spending big to woo consumers.  

Through November, subscription streaming service advertisers spent $1.94b, making them the biggest spenders among media and entertainment advertisers. To put this into perspective, drama TV shows, the second-highest-spending category, spent $1.2b. 

Nearly half of the dollars from streaming services came from the expected bunch: Amazon, Disney, and Warner Bros, who collectively spent $882mm. 

That doesn’t tell the whole story, though. 

Although spending levels are high, they fell by 19% YoY, which would have been greater if it weren’t for Amazon’s 111% MoM increase in November. 

So, what’s the deal? 

For Amazon, the timing of the uptick is likely the result of a concerted effort to get eyes on its $1b investment in Thursday Night Football.   

That said, Amazon’s willingness to spend isn’t typically a sound leading indicator of advertising sentiment; its pockets are too deep. 

The more telling storyline comes when looking at advertisers for Disney and Warner Bros., who decreased budgets by 7% and 60% MoM, respectively. 

While this is likely a course correction from the pandemic-induced spending spree, it could also point to trouble on the horizon stemming from consumer pushback related to perpetual price hikes, rising ad loads, and the need to cut costs amid the recession.

That said, Warner Bros will likely ignore the writing on the wall and spend substantial ad dollars to attract attention to its streaming service, Max, which launches this spring.. 

Drama TV shows & films

The popularity of drama TV—46% of respondents to a survey aged 18 to 29 said they watched drama TV—continues to spur the strategies of advertisers. 

Through November, advertisers for drama TV shows increased spending by 65% YoY to nearly $1.2b, thanks to significant investments from Amazon, Apple, Comcast, Paramount Global, Disney, and Warner Bros. 

Advertisers for these companies each spent more than $100mm through the first ten months of the year and accounted for 88% of the spending from drama TV. 

Drama TV shows with the biggest ad budgets

  • Bel-Air (Peacock TV)
  • House of the Dragon (HBO Max)
  • The Lord of the Rings: The Rings of Power (Amazon)

Advertisers for these shows collectively spent more than $176mm, but one could argue they didn’t have a choice.  

Amazon’s latest take on The Lord of the Rings was the most expensive TV show ever, while House of the Dragon cost HBO $20mm per episode.

Thankfully for these advertisers, the campaigns had a positive impact. HBO’s biggest-ever marketing campaign for the House of the Dragon attracted nearly 10mm to its premiere.

At the same time, advertisers for drama films, including those at Comcast, Sony, and Disney, increased spending by 208% YoY to $764mm.

Drama films with the biggest ad budgets

  • Black Panther: Wakanda Forever (Disney)
  • She Said (Comcast)
  • The Woman King (Sony) 

Advertisers for these films combined to spend around $280mm or 37% of the investment from the drama film category.

For Black Panther: Wakanda Forever, the campaign was a success; the Marvel sequel brought in $330mm worldwide, making it the highest-grossing November debut in history.

Deep pockets are nothing new to these advertisers, but their world is evolving—or at least trying to. With traditional premiere strategies making way for a hybrid variation (releasing in theaters and streaming services simultaneously), it’ll be interesting to see advertisers respond. 

Could ad teams across company lines join forces? 

Will agencies take control of everything? 

The next twelve months will begin to answer those questions.

Game titles 

Gaming also benefited from the pandemic, with nearly two-thirds of Americans now logging into their favorite consoles and devices. YouTube, in particular, has seen its gaming street cred grow significantly, and advertisers have taken notice

To that end, advertising for game titles increased spending by 19% YoY due primarily to investments from Microsoft, Playrix, and Tencent Holdings, who collectively spent $212mm.

A level deeper, Playrix, one of the world’s biggest mobile gaming companies, invested in campaigns to promote Fishdom, Manor Matters, and Townships. 

While Playrix and other gaming companies leaned heavily into ads of late, a shift could be coming as player’s shift their behavior and consumer spending declines.

Meanwhile, Tencent Holdings promoted Fortnite by Epic Games, while advertisers for 1047 Games went with Facebook and online video following the debut of Splitgate and a $100mm round of funding.

It’s worth noting that ad budgets fell in November MoM by 10%, but that’s par for the course as advertisers adjusted their budgets following the post-Thanksgiving push. 

Are You Not Entertained? 

Entertainment is the lifeblood of society, and Maximus (Russell Crowe) knew that when he said those famous words in the 2000s hit, Gladiator.

For that reason, ad dollars from media and entertainment advertisers will continue to flow, but they will be impacted by factors outside of their control.  

Will they adopt more reserved strategies in light of the recession? Some might, but others won’t. 

Only time will tell, but what we do know for sure is that media and entertainment advertisers will be ready to open their wallets in 2023. 

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