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Marcus Johnson (00:00):

Unlock more growth with Awin. Tackle acquisition, conversions, and retention by tapping into a network of over 1 million affiliate partners. That's too many. With everything from partner management to reporting and payments in one easy dashboard, Awin helps brands drive real scalable growth and results, both. They do everything. Visit awin.com/emarketer to learn more. Hey, gang. It's Friday, August 29th. Ethan, Minda and listeners, welcome in to Behind the Numbers, an EMARKETER video podcast made possible by Awin. I'm Marcus, and joining me for today's conversation, we have two people both calling New York home. Our first is principal forecasting writer Ethan Cramer-Flood.

Ethan Cramer-Flood (00:49):

Marcus, good to see you.

Marcus Johnson (00:50):

You too.

Ethan Cramer-Flood (00:52):

It's been a while.

Marcus Johnson (00:53):

Without too much energy, [inaudible 00:00:55]-

Ethan Cramer-Flood (00:54):

Should I turn it down?

Marcus Johnson (00:56):

[inaudible 00:00:56]-

Ethan Cramer-Flood (00:56):

No, no, no. That's my level. It's going up from here.

Marcus Johnson (01:03):

Oh, good. We're also joined by senior social media analyst, Minda Smiley.

Minda Smiley (01:05):

Hello, Marcus. How are you?

Marcus Johnson (01:08):

Very good. How are we doing?

Minda Smiley (01:09):

Good, good.

Marcus Johnson (01:09):

Very nice. All right. Today's-

Ethan Cramer-Flood (01:12):

[inaudible 00:01:12] than I am.

Marcus Johnson (01:13):

That's what we were looking for. Today's fact. Nigel Richards is the Scrabble GOAT. GOAT being greatest of all time, not real goat and play Scrabble. Do goats have two names? Some of them. How are they going to get their mail? Every two years-

Ethan Cramer-Flood (01:36):

Yeah, that's-

Marcus Johnson (01:38):

Sorry. It's gone up the rails. Every two years, the best Scrabble players on the planet gather for the World Scrabble Championship. No one has dominated the space quite like New Zealander, Nigel Richards. Richards has claimed five English language world titles to date, but his most astounding wins come in languages he doesn't even speak.

Ethan Cramer-Flood (02:03):

Whoa.

Marcus Johnson (02:04):

In 2015-

Ethan Cramer-Flood (02:05):

Wow.

Marcus Johnson (02:05):

... he memorized the entire French Scrabble dictionary in just nine weeks without learning French, and won the French Language World Championship and then did it again in 2018. Time Magazine notes, an NPR piece reports his friends said that he didn't understand the words. He just recognized them as playable tiles.

Minda Smiley (02:26):

Wow. Way to make me feel bad about myself before the long weekend, Marcus.

Marcus Johnson (02:29):

Yeah. You're welcome.

Ethan Cramer-Flood (02:31):

[inaudible 00:02:31].

Marcus Johnson (02:30):

Also, not impressive enough, he did it again in 2024 and this time in Spanish. At the World Championships in Granada, he beat 150 people from over 20 countries winning 23 after 24 games, says The Guardian. For context, David Elder of Australia has two World Championship wins, 2017, 2023, making him the closest competitor, but Richards has eight.

Ethan Cramer-Flood (02:58):

I mean, I'm slightly embarrassed for the world's Spanish speakers and the world's [inaudible 00:03:01], but we'll give the credit to this guy.

Marcus Johnson (03:05):

Yeah, I hate Scrabble. My mom beats me regularly.

Minda Smiley (03:08):

Does anyone play Wordle still just come thinking about Wordle?

Marcus Johnson (03:09):

Oh, yeah.

Ethan Cramer-Flood (03:11):

Yeah. Almost every day. Almost every day.

Minda Smiley (03:13):

Oh, wow. Okay.

Ethan Cramer-Flood (03:13):

It's a ritual.

Minda Smiley (03:14):

Yeah.

Ethan Cramer-Flood (03:17):

I assume that means I would be competitive with this guy if it came down to it.

Marcus Johnson (03:19):

Scrabble has [inaudible 00:03:20]-

Minda Smiley (03:20):

Sounds like it.

Marcus Johnson (03:21):

No, no. That's not what this means. Today's real topic, the mismatch between ad dollars and audience attention. The two of you have written reports about this anomaly where the people spend their time and where the ad dollars go to try to reach them, and oftentimes there are imbalances. So how much time do people spend watching TV versus the amount of ad dollars there, or how much time do people will spend on Instagram versus the ad dollars that go there? We'll start, Ethan, by talking about device. It's a slightly bigger picture. What's the biggest discrepancy by device with regards to where people spend their time versus how many ad dollars are aimed there?

Ethan Cramer-Flood (04:13):

So just quick background for folks that are listening. We have this gigantic forecast where we piece together the totality of all ad spending in US, everything that's getting spent everywhere. And then we have this other forecast completely separate where we calculate what all consumers are doing and how they're spending their time with media, and when we smash those two things together, and we see what's what. And this year we were able to write several different reports on those outcomes. So you asked about the devices. Spot on, the most interesting element is an argument we've made before, which is that far, far more advertising money is flowing to ads that appear on mobile devices than the amount of time that people actually spend looking at mobile devices.

(05:05):

And then the flip side of that, where the most extreme discrepancy in the reverse order is CTV, streaming televisions and digitally connected to televisions where we as consumers are spending an absolutely enormous amount of time, but the amount of ad dollars flowing to CTV is, despite what you may have heard, actually small. So those are the two big discrepancies, and we've got lots and lots of granular data on this. I'll just try to use it in the simplest number as possible, which is basically that the totality of the US ad ecosystem sends well more than 50% of its total ads spend to mobile device advertisements. Whereas we as a society actually only spend about a third of our time with media looking at mobile devices.

Marcus Johnson (05:53):

The other side of it, there is huge imbalance, because of that there's a huge imbalance on the big screen. So 40% of time spent with media is watching the big screen, CTV plus linear, and just having 20% of the ad dollars going there. And so what does that trend look like going out?

Ethan Cramer-Flood (06:14):

They're getting worse. So I hinted at that the reason that this is still worth talking about because we have revealed this discrepancy in the past, is that despite this misalignment, every year the gap gets further and further. So the mobile is more, and more, and more dominant from advertisers' perspectives, but it is not more and more dominant from regular consumers. Consumers are hardly spending more time with their phones than they were in the past. It's relatively flat lined, yet mobile is getting a bigger, and bigger, and bigger chunk. And then CTV, the opposite is happening. And this rings true for Netflix fans out there and Disney Plus, and HBO, and regular TV and sports. We're all actually spending more, and more, and more time in front of CTVs, but the ad dollars that are flowing to it are not keeping up. So that gap is getting bigger as well.

Marcus Johnson (07:05):

Is there a reason, going back to mobile for a second, is there things that we can point to, or is this just that the industry is so focused on mobile being so important that this is just a continuation of a trend that started a long time ago, and there hasn't been a correction?

Ethan Cramer-Flood (07:22):

Of course, there are reasons, and that is actually a great segue into what I believe is your second question, which we'll hand it over to Minda.

Marcus Johnson (07:28):

[inaudible 00:07:28] my second question?

Ethan Cramer-Flood (07:30):

See, I checked.

Marcus Johnson (07:31):

I don't even know.

Ethan Cramer-Flood (07:33):

There's a-

Marcus Johnson (07:33):

Where we are going next? Take us.

Ethan Cramer-Flood (07:35):

... there's a reason that mobile dominates is because what's on mobile, what we're looking at and where that money is going.

Marcus Johnson (07:41):

Okay. My guess is social.

Minda Smiley (07:43):

And I will take it from here.

Marcus Johnson (07:44):

Yeah, go ahead, Minda.

Ethan Cramer-Flood (07:45):

[inaudible 00:07:45], Marcus, clear up. We've got an official question.

Marcus Johnson (07:49):

Go ahead, Minda.

Minda Smiley (07:50):

Yeah. Well, what I think you're going to ask is about the role that social plays in all of this.

Marcus Johnson (07:50):

Yes.

Minda Smiley (07:54):

And really the-

Marcus Johnson (07:55):

Of course.

Minda Smiley (07:56):

... the big story that my report focused on is around the fact that when we look at the share of time spent on Meta versus the share of ad dollars that goes towards Meta, there really is a big disparity. Advertisers are just putting way more money towards Instagram and Facebook compared to how much time adults actually spend on these two platforms. Of course, adults are spending a lot of time on Instagram and Facebook. They're two of the biggest social networks ever. But when you actually look at how much ad dollars are going towards Meta in general, it's just incredible. They really are far ahead. And it does call into question if advertisers are maybe going a bit too far on Meta when they could, perhaps, be spreading their budgets a little more evenly.

Marcus Johnson (08:51):

That is the big question here. And looking at total social network versus ad spend, or social network time versus the ad spend world, so it's a slight overcorrection that's been happening. So two years ago, the share of time spent on social was four points higher than the ad spend on social. And two years from now, the gap will be four points in the other direction. So there's been an overcorrection in the other direction. Ethan, we talked about this before, I think at the start of the last episode about this a year ago where you were cautioning against these things shouldn't be perfectly synced up. There's more to it than, "This is how much time is being spent into place? You should allocate the exact amount of dollars or the exact share."

Ethan Cramer-Flood (09:39):

Yeah. So when you ask why these discrepancies exist, I guess there's two answers. The blatant answer is where money is flowing and then what devices we tend to use while engaging with those platforms. So if you're engaging with social media, you're probably on a phone. If you're engaging with Netflix, you're probably on TV. If you're on search, you're either on a mobile phone or maybe you're on a desktop laptop, but that's not really answering why. But the real answer is why is because it works because the advertisers are sending money to market on these social networks because there's a good return on their investment to do it that way. And so this massive discrepancy has built up over time because it's so effective. There's a reason that everyone is doing what they're doing. Folks aren't stupid. They send the money where they're going to get a return.

(10:32):

And so when we discover these misalignments, it's not a value judgment saying, "Oh, you're doing this all wrong. How come you're not spending more money on Spotify? How come you're not spending more money on Netflix? Don't you realize that people spend tons of time there and you're not spending hardly any money there? And look, you're spending all your money on Facebook and Instagram, but people actually are not spending very much time on Facebook anymore." We're not saying there's anything wrong about that. Clearly it works. Clearly search advertising also works, right? But we're identifying areas of opportunity, and we're also identifying areas where maybe there's been an overshoot. I think markets use that term, right? It's like we've gone too far. Yes, this all works. There's no denying it, but look at what you might be missing. Look at where people really are, and how you could maybe rebalance if you took a reassessment.

Minda Smiley (11:22):

Exactly. And just to put some figures towards some of what I mentioned earlier on Meta. I mean, they will bring in almost 75% of all social network ads spend in the US this year according to our estimates. But US adults will spend roughly 40% of their time with social networks on Instagram and Facebook. So it helps really just put some actual figures to that disparity, and I totally agree with what Ethan's saying. I mean, there are a lot of reasons why advertisers spend on Meta. They have scale, they have targeting, they have a lot of sophisticated ad tools, low barrier to entry. I mean, I could go on and on. Obviously we can't really look at time spent in a vacuum, and to Ethan's point just say, "Oh, there's these huge disparities. Something is going wrong," that's not it at all. But as I was saying earlier, it just indicates that, perhaps, advertisers are putting too many eggs in Meta's basket, so to speak, and there could just be some movement around. But it provides some interesting comparisons and analysis, but of course, it's much more [inaudible 00:12:23].

Marcus Johnson (12:22):

And part of this is just lag. The people have to go to the thing, and then advertisers have to see it as being worthwhile sending their dollars after those people, noticing that, "Okay, there's some people getting to this platform. It's getting to a critical mass. We want to start adding more and more." A lot of the time, most of the time the ad dollars aren't arriving on the scene before people get there, and so you have to wait for the audience to develop before the ad dollars can follow. You mentioned, Minda, that social players have a lot of the, especially Meta has a lot of the ad spend and less of the time. However, in your report, you do note that social players like Meta are trying to take a page from YouTube's playbook to capture more CTV time. Can they?

Minda Smiley (13:10):

Yeah, it's a really great question. I mean, I think it's a complicated answer. On the one hand, their track record in this space, when we look at TikTok, and Instagram, and Facebook's efforts to break into TV and better compete with YouTube in the past, they haven't been super successful. You might remember Facebook Watch, IGTV.

Marcus Johnson (13:30):

I do.

Minda Smiley (13:31):

These are some of these efforts that clearly didn't really take off in the way that Meta probably had hoped. And so it has been a space that historically has been difficult for these purely social networks to break into, even though we know now that they are trying or they reportedly are trying. That being said, I mean, I think now more than ever, this is the time for them to try. I mean, one thing that we're really noticing within the social space is that people more than ever are viewing social media as entertainment. It's not a place to go anymore to connect with family, or just connect with family and friends or just post. People are going there to watch video, and they're viewing it in a way that's very similar to TV.

Ethan Cramer-Flood (14:11):

Also, there's a double layer of irony of the social media, social network companies trying to emulate YouTube success on CTV. And that is that YouTube has actually been much worse than they are at monetizing their success. I mean, YouTube has become dominant, either they're in the headlines a lot. Nielsen just declared them the number one TV power in terms of more people spend more time watching YouTube on TV than they spend watching anything else on TV. YouTube is just far worse at turning that into ad revenue than the social network companies are. So they're like, "We've got to emulate YouTube," even though they're not really succeeding all that well.

Minda Smiley (14:49):

Yeah, "Even though we are the ones that are monetizing way better than YouTube," so it is odd in that way.

Ethan Cramer-Flood (14:55):

It's odd. But then the second irony is that it's like the social media companies are aware of what we are talking about here right now, and they're nervous about it, which is that people are spending more, and more, and more time in front of those CTVs, and they're not spending more and more time on their phones looking at social media. So they're doing what we're telling marketers to do, which is get in front of where people actually are, because where people are-

Minda Smiley (14:55):

Exactly.

Ethan Cramer-Flood (15:17):

... is on the couch looking at the big screen. So they are trying to respond to that. But I agree with you guys, that doesn't seem like a very pleasant experience to be scrolling your Instagram feed on your TV in the living room. Maybe they'll figure it out. I don't know.

Marcus Johnson (15:30):

Yeah, they haven't cracked the code quite yet. But to your point, Ethan, they've definitely noticed a shift, and our numbers point to that. And in these reports you can see nine point gap between CTV time, a share of CTV time versus social network time for people, and that growing from 2023 to 2027 from a nine point gap to a 15 point gap. And so more time on CTV, a bit less time on social networks, but that gap is certainly growing. Minda, you touched on something which I think is fascinating, and I'm wondering how people view it. People see it as social networking or social media, but it has evolved, right?

(16:09):

It was social networking, it became social media, then it was social audio for a few seconds, and then social entertainment. And it really is entertainment, and entertainment oftentimes is best consumed on the big screen. And YouTube's been able to figure that out just as many Americans are spending their time, or Americans spending an equal amount of time watching YouTube on a mobile device as they are on a TV. And so as you said, TikTok and Instagram working on some TV apps, but we'll see what comes of that.

Minda Smiley (16:43):

Yeah. And there's a lot of unanswered questions. Will they pursue a more original strategy, or will they more just try to... Will they focus on creators? Will they focus on just the algorithm and AI recommendations? I mean, there's so many different ways they could approach it and things they could roll out, so I think a lot remains to be seen.

Marcus Johnson (17:00):

Ethan, let's end with this. In your piece, you write that sub OTT's unusual path to advertising has created major misalignment, so another misalignment in this part of the media, an ad spend world. How come? Why is sub OTT on an unusual path when it comes to advertising?

Ethan Cramer-Flood (17:23):

Yeah. I mean, this is my attempt to let marketers off the hook because we all collectively spend just an absolutely enormous amount of time with Netflix, and HBO, and Disney Plus, and Hulu, and Paramount, and on, and on, and on. That's no surprise. What may be a surprise is that, so as of this year, less than 4% of all advertising dollars will be going to those services, 96% elsewhere even though clearly they are dominant parts of our culture and our society, and all our eyeballs are glued to those services all the time, that's not a secret. So you would think that more ad dollars will be flowing that way if you want to actually get in front of where American consumers are. But of course, we'll let them off the hook, the advertisers off the hook, because of course, a lot of these streaming services were not available for years, and years, and years.

(18:15):

They were ad free [inaudible 00:18:16], only a subscriber service. So even if you wanted to put all your budget on this stuff, you were not able to, they didn't have the inventory. That has changed. So I guess the new headline is like, "Hey, man, that excuse is gone now." All these guys are leaning heavily into their ad supported tiers. Other than Apple TV Plus, you can reach everybody else. There's tons of inventory. Prices are actually going down because there's so much now, but the share is not really going up. It's going up a tiny little bit. So in the next couple of years, we project about 4.1% instead of just under 4% of all money, of all ad dollars will end up in these streaming services. It's slightly more than 4%. So it's barely moving up, even though, of course, money is flowing there, the growth rates look good. It's just that it's not nearly enough to keep up with what people are actually doing so that the time spent growth with streaming-

Marcus Johnson (19:14):

OTT needs to go.

Ethan Cramer-Flood (19:15):

OTT streaming is gigantic, [inaudible 00:19:18]. There's going to be about, a quarter of our day is going to be spent with these things, and only 4% of that dollars are going there. So there's a legacy explanation you couldn't get in the door even if you wanted to. That explanation is gone. Now there's lots and lots of ways to advertise.

Marcus Johnson (19:31):

Yeah. As you can see from the chart on the screen here, this is showing the percentage of time people spend with sub OTT services, Netflix, Hulu, things like that, versus the amount of ad dollars going to those services. And to Ethan's point, right now, it's below 4% for the ad spends, and only going to just above 4% in a couple of years time. Meanwhile, the time spent is just astronomically higher and continuing to rise and keep that gap between the two. Ethan, why aren't we expecting this up and to the right growth in ad spending now that a lot of new inventory has come online?

Ethan Cramer-Flood (20:13):

Yeah. I mean, I think this goes back to our second point of the path dependency, the familiarity with social media. This is where it's always been. It's easier, right? It's easier to advertise on Facebook than it is to... Advertising on Netflix is similar to advertising on television. You're going to have to spend a lot more time and effort, and money just making your ad. Maybe AI will solve some of this, and maybe suddenly it'll be a lot easier for everyone to just put out their AI slop that they can slap all over HBO. I hope not. In fact, I feel bad even revealing this discrepancy because the last thing I personally want is there to be more ads when I'm watching [inaudible 00:20:53].

Marcus Johnson (20:53):

No. If that happens, it's Ethan's fault.

Ethan Cramer-Flood (20:55):

I'm obligated by my job to [inaudible 00:20:58] really. I'm just like, "Don't tell anyone. Don't tell anyone. It's fine the way it is." Yeah, no. So people are just used to doing what they're used to doing, and it's easier to stick with what you've been doing rather than to do something more challenging.

Marcus Johnson (21:11):

And as you point out, this is the biggest gap, right?

Ethan Cramer-Flood (21:11):

Yeah.

Marcus Johnson (21:14):

Between ad revenues and time spent across any digital device category that we track.

Ethan Cramer-Flood (21:20):

Easily.

Marcus Johnson (21:21):

Yeah. And not getting smaller, as Ethan mentioned. Well, for Ethan's full report on US time spent versus ad spending 2025, and Minda's social specific version of that, click the links in the show notes or Pro Plus subscribers, connect to emarketer.com. That's what we have time for. Thank you so much to my guests. Thank you to Ethan.

Ethan Cramer-Flood (21:40):

Happy end of summer.

Marcus Johnson (21:43):

Argh, Jesus.

Ethan Cramer-Flood (21:44):

Yeah. Sorry.

Marcus Johnson (21:45):

[inaudible 00:21:45] note to end on. Thanks to Minda too.

Minda Smiley (21:48):

Honestly. Bring on fall. I [inaudible 00:21:50].

Marcus Johnson (21:50):

Yes, we're back. Thanks to the whole editing group-

Minda Smiley (21:50):

Ending on a high note.

Marcus Johnson (21:54):

... and to everyone. Thank goodness to everyone for listening to Behind the Numbers, EMARKETER video podcast made possible by Awin. Make sure you subscribe and follow, and leave a rating and review. We'll be back on Tuesday. Happiest of long weekends.