WHY ADVERTISERS PAY MORE TO REACH VIEWERS WHO WATCH LESS

Summary from the TLDR Marketing newsletter

A new study found that viewers' income and likelihood of buying a product were not factors that determined how much it costs to reach them — it's how active they are on the platforms where the ads run. More active audiences command a lower advertising price per impression, while groups that don't tune in as often cost a premium to advertise to. As a result, TV advertisers pay more to reach young men who watch TV infrequently and pay less to reach women and older groups, whereas on platforms such as Instagram and TikTok, older audiences can be more expensive to reach. This scarcity factor explains why broadcast and cable advertising revenue largely held steady from 2014 to 2019, even as more people moved over to streaming services.