By Sahil Patel
People are spending more time streaming video as the novel coronavirus forces them to stay indoors. Advertisers, however, aren't following the same trajectory.
TV streaming time in the U.S. went up 12% last week compared with the previous week, according to video technology company Wurl Inc., which says it tracks viewing habits of about 5 million viewers on internet-connected TV sets.
Amazon.com Inc. and Walt Disney Co.'s Hulu have seen streaming go up during the crisis, according to people familiar with the matter. Other streaming video providers including AT&T Inc.'s HBO and Vizio Inc. have reported increased viewing on their streaming services as well.
Viewers seem particularly motivated to find new things to watch, according to Vizio, which is one of the largest makers of TVs.
"We're not just seeing more time spent with streaming and TV, which we expect to continue to go up, but we're also seeing more time spent on search and discovery," said Mike O'Donnell, the head of Vizio's platforms business. "With no sports and growing news fatigue, people are starting to search for more content to watch."
Viewing sessions from March 16 through 22 across ad-supported and ad-free apps on Vizio's connected-TV platform rose 40% from the previous week. Its platform tracks viewing habits for 10.1 million TV sets using its operating system.
The uptick in streaming has translated to more available ad time. SpotX Inc., which helps publishers sell video ads, said it saw a 16% increase in video ad inventory from March 19-22 compared with March 5-8, the corresponding days two weeks earlier. That includes video streamed on TV sets as well as other connected devices like smartphones, tablets and computers.
SpotX said ad inventory available for streaming TV programming specifically rose nearly 25% from March 12-24, compared with Feb. 28-March 11. Inventory for digital videos, which are typically shorter, was up 13% in the same period.
But even as viewing grows, advertiser demand is falling amid the sudden halt to much economic activity.
"We have had straight cancellations; we've had clients postponing campaigns," said Mike Evans, senior vice president of demand facilitation for SpotX, which said it works with more than 600 media companies and has a reach of 42 million internet-connected TV households.
"The volatility first and foremost -- and the obvious one -- is in travel," Mr. Evans said. "That's taken a massive hit. I don't know how that's going to continue."
Travel, hospitality and real-estate marketers cut ad spending through SpotX's platform by more than 70% from March 16-22, compared with the previous seven days, according to the company.
SpotX declined to provide exact numbers on any recent changes to overall ad spend and the company's bottom line. The company's operating chief, Sean Buckley, acknowledged the broad impact of the coronavirus on the ad industry. Companies such as Twitter Inc. and New York Times Co. have already indicated that ad revenue will take a hit. "We imagine this will weigh on most ad-supported businesses," Mr. Buckley said through a spokeswoman.
An executive at another platform that works with publishers to sell video ads said marketers reduced spending last week by 20% to 30% from the week before. Other categories pulling back include quick-serve restaurants and concert and event marketers, according to the executive.
"We're also at the end of the month and the quarter, two times when you typically see ad [spend] spike up as people try to reach campaign goals, " the executive said. Ad declines are likely to continue through the second quarter of the year and into the third, he said.
Falling ad demand just as viewership jumps is a frustrating development for ad sellers in streaming TV, where marketers were slow to follow audiences even before the pandemic. Streaming viewers were accustomed to seeing the same ads repeat much more than they would on traditional TV, or even blank screens where ads should go, before the coronavirus sequestered them at home.
In another wrinkle, some of the new viewing is going to news programming -- a category where not every advertiser is comfortable.
Video ad fill rates, a measure of how much inventory actually sells, have plummeted dramatically since March 17, according to Watching That Ltd., a U.K.-based video analytics firm. Fill rates for some digital video companies have declined by 14 to 30 percentage points in March compared with February, the company said.
There are some promising areas. On SpotX's platform, gaming ad spend nearly quadrupled, while it rose 97% for lotteries and 89% for alcohol from March 16-22, compared with the previous seven days.
"We're getting an influx of requests from advertisers following the cancellation of live [sports]," said Mr. Evans. "They had all of this money allocated to major sporting events such as March Madness and the NBA. All of a sudden, they have to figure out what the reallocation of that is and what that looks like -- or if spend just goes down."