MoffettNathanson: Most Q3 AVOD ad spend went to three platforms

The majority of marketing budgets for ad-supported video on-demand (AVOD) platforms during the third financial quarter (Q3) of the year were spent on inventory available on Netflix, Amazon’s Prime Video and Disney Plus, according to a new research note from MoffettNathanson.

AVOD platforms were responsible for 11 percent of the overall advertising industry’s growth during Q3, but the growth was boosted in part due to the presentation of live events from the 2024 Summer Olympic Games on Comcast’s streaming service Peacock, which generated a high amount of interest from advertisers willing to reach consumers on connected TV (CTV) platforms, the research note said.

When factoring in Peacock, the AVOD market increased 49 percent during Q3, MoffettNathanson affirmed, with around $325 million spent on inventory within the streaming service. Excluding Peacock, the AVOD market increased 36 percent, the research note concluded. (Comcast has the domestic telecast rights to the Olympic Games and Paralympic Games; The Desk previously reported that broadcast and cable networks nabbed a higher share of viewership during the Olympic Games compared to Peacock, based on )

Still, most of the money spent on AVOD inventory went to the Big Three CTV platforms, even though Netflix, Prime Video and Disney Plus are the newest entrants into the ad-supported streaming space. When factoring Netflix, Prime Video, Disney Plus and political ad spending, the AVOD space grew just 5 percent during Q3.

“All of this is to say that 3Q was still pretty good quarter, just not quite the blockbuster the topline numbers may imply,” MoffettNathanson concluded. “There were decelerations on a core basis nearly across the board, but the market still grew at a healthy +10 percent clip.”

When excluding the Olympics and political advertising, pharmaceutical companies and their products represent some of the biggest growth opportunities in the overall U.S. advertising market, though that opportunity could be stymied by the incoming presidential administration.

Namely, MoffettNathanson noted that President-elect Donald Trump’s nominee to lead the Department of Health and Human Services, Robert F. Kennedy, Jr., campaigned as a presidential contender on reeling in the ability of drug manufacturers to advertise as they currently do. Kennedy’s nomination requires confirmation by the U.S. Senate; Democratic lawmakers are expected to oppose him in unison, and they could be joined by some Republican colleagues, which could sink his chances of leading the country’s top health regulator.

Still, if Kennedy is confirmed, and if he moves forward on his threat to reel in drug company advertising, it could impact around 10 percent of the overall domestic advertising market. It would “disproportionately affect linear television,” including broadcast and cable networks, “of which pharma accounted for 9 percent of total spending in 2023,” according to MoffettNathanson, which relied in part on data from AdAge.

Trump’s threat to impose tariffs on imports of consumer goods manufactured overseas could also impact other advertising sectors, including the automotive industry, which accounts for 7 percent of national TV and 4 percent of digital video advertising spend.

The research note, called “U.S. Advertising: The Gilded Quarter,” can be accessed by clicking or tapping here.

This article, MoffettNathanson: Most Q3 AVOD ad spend went to three platforms, was first published at The Desk. To submit a news tip, comment or request for correction, please click or tap here.