➤ The Video Advertising Bureau estimates that ad spending against premium TV inventory was up 8% overall in 2024, with linear ahead by 2% and connected TV up 23%.

➤ More advertising will be transacted on multiple currencies rather than a single currency.

➤ The movement toward greater transparency among companies whose data resides behind walled gardens will be a key factor in 2025.

The Video Advertising Bureau (VAB) represents the advertising sales departments of TV networks and distributors. The industry trade group, which advocates for premium professionally produced inventory, provides research and analysis services that offer insights into consumer behavior and TV programming at a time when there have never been more viewing options and media fragmentation.

S&P Global Market Intelligence recently caught up with VAB President and CEO Sean Cunningham, who has been outspoken about the need for improved measurement from longtime industry standard-bearer Nielsen Holdings PLC, more alternate currencies and greater data transparency. Cunningham discussed the industry's 2024 performance, key developments for 2025 and beyond, and the quest to grow well past the 4,800 largest national advertisers. An edited transcript of that conversation follows.

S&P Global Market Intelligence: 2024 was an even year, meaning the presidential election cycle and the Summer Olympics. There were also the UEFA Euro and Copa America soccer tournaments. A good year for the video industry overall?

Sean Cunningham, President and CEO of the Video Advertising Bureau. Source: VAB.

Sean Cunningham: Ad spending, by our estimates, on multiscreen TV was up 8% this year. Linear was up a couple of points. Connected TV was up 23%. Plus 8 percentage points is a good number. To your point, there was more premium inventory with those events. There were also a lot of new advertisers.

I was looking at some of VAB's research — there were hundreds of new TV advertisers this year.

The last three years, there have been 300 or more new advertisers each year. I think it's going to wind up about 330 in 2024. It's been e-commerce companies, different direct-to-consumer services and small and medium-sized businesses. They are engaging in analytics, launching with $500,000. They are seeing increased search, web traffic and visits. It's impactful.

And what we're seeing from data is they're not dropping off after the launch, but they're pushing more money in.

That's what the industry wants to hear.

It means it's working. They are building traffic, customer visits.

I know NBCUniversal Media LLC has committed to go after small and medium-sized companies with Peacock and other digital offerings.

It's industrywide. [Media sellers] want to continue to grab more ad dollars well beyond the base of the 4,800 largest national advertisers. Our future is the next 20,000 advertisers — small and medium-sized companies with the ability to assess strong data and access platforms that give them digital-like information.

Are the newcomers moving budgets from local buys, from digital into premium TV inventory?

A lot of advertisers have exhausted their ability to get new customers through non-TV outlets, whether social, affinity marketing, big walled-garden companies. Companies have looked to build out customer bases the best way they can, but they're running out of scale. When they light up TV, there is instant scale, hordes of new customers.

Some of the spending is occurring strategically, following investment rounds. Companies want to let customers know and, in some instances, let private equity firms know they are advertising on TV.

So there is still a premium, a pedigree to advertising on TV?

It legitimizes your brand; it says you're big-time. It's long-form fare, with high consumer engagement and brand safety across any platform.

The market for entertainment programming has been challenged to varying degrees over the past 18 months to two years. Live sports have filled in the impressions gap…

There are still decades old currency challenges, but we may be on the cusp of some seismic improvements. We're getting closer. There is good news on the way and multiscreen TV is being measured more accurately.

So you like Nielsen's Big Data + Panel service, which is expected to fully launch in 2025?

I like the fact that there are conversations about Nielsen and other new currencies. If Nielsen is making improvements, it's because there is a more competitive market.

Can you talk about that competition?

There has already been some consolidation. Two years ago, you were ticking off six names. Now its VideoAmp Inc., iSpot.tv Inc. and Comscore Inc. Better measurement is a precursor to more data, but the key is what translates into currency. We're starting to see sophisticated usage of targeting data. OpenAP LLC has written a couple of billion dollars that was non-Nielsen business.

The biggest thing over the next four years will be about multicurrency. How many companies are using Nielsen? How many brands will be using other currencies?

Let's talk about ad-supported video on demand. All of the big media and tech companies, aside from Apple Inc.'s Apple TV, are selling ads. Amazon.com Inc.'s Prime Video got in the game early this year, adding a lot of inventory to the market. Projections call for US streaming ad spending to push ahead of linear outlays in 2029.

There has been a preference for [ad-based video on demand] versus [subscription video on demand]. If you asked that question three years ago, there would have been the opposite response. In 2022, AVOD had 39% to 40% of the pie in terms of new subscriptions. Now, 51% of new subscriptions on a quarterly basis are ad-supported hybrid tiers of subscription video-on-demand services.

There is more viewing going that way, more impressions in premium video. I don't think it's a consideration on principle to direct dollars that way. But people are just looking at the market holistically, where the viewing is and they're growing their investments in mobile or connected TV, versus linear.

With so many options, it would seem this might be the most complex time ever to be in the advertising business.

Some may say the environment is more complex. I'm going to say more complete. There is more refinement, more informed decisions. Migrations of data at scale. Marketers with the ability to use first-party data. There is real sophistication with targeting, more efficiency and productivity.

The 2024–25 upfront was slow to develop. Some said because there was more AVOD inventory in the mix. Is the growing data sophistication also slowing things down?

Every upfront is unique. There is more data enrichment, more deals driven by platforms, more deals driven by analytics. Sure, those considerations can affect the pace of the market.

For years, some have been saying the upfront is going to die. Sean, that's never going to happen, right?

The national upfront marketplace is still large. It offers benefits to many brands. Different marketers want to conduct business differently. But the upfront for premium multiscreen inventory continues to work well for many, many advertisers.

As you look ahead to 2025, what are you thinking about?

Two things. First, the need to define what is truly premium video. Professionally produced long-form video generates high viewer engagement and is brand-safe on any platform. Video that doesn't hit those marks is not providing good services for brands.

The second is a need for greater transparency, or the double standards of transparency that continue to plague the marketplace. For lack of better terms, you have multiscreen TV that is measured by third parties, versus the transparency of walled gardens, which is actually opaque.

I urge everyone to insist on demonstrations for all of their video impressions — where they were deployed, how they were calculated and how they were destined for delivery. Every impression should be discoverable, transparent and notable. If things are opaque, those are the wrong kinds of actions.