The Cost of Fear: The Hollywood Strikes and Their Impact on Advertising

Many people in Hollywood are anxious about their long-term relevancy, and that fear may have wide-reaching impacts.

The issues facing writers will cause pain for the digital advertising sector. How much pain will depend entirely on how long the strike lasts.

Let’s start with everyone involved in the programmatic market. CTV has been good to the world’s open programmatic markets. According to Pixalate, CTV ad spend reached $3.2 billion in the first quarter of 2023, with plenty of room to grow further given that nearly all (98%) internet connected houses can be reached programmatically. Ad tech companies that provide the infrastructure and markets for CTV open programmatic may see a dip in revenue if the strikes go on for months.

Then there is the delay in new TV episodes to consider. In the first half of 2023, overall spending on TV ads totaled $26 billion, of which 9% was for advertising in talk shows, soap operas and sitcoms. That revenue has already declined as shows, such as late night comedy, went dark due to the writer’s strike. It can further decline if new TV shows and episodes are delayed by months on end.

Over the past few years, we’ve seen a pivot towards AVOD as consumers reduced the number of paid subscriptions to streaming services once lockdown orders were lifted. Without new content, will consumers have an incentive to tune in, or will they move on to other activities, resulting in less inventory for content companies and fewer opportunities for brands to reach new audiences? 

“While video advertising and subscription revenues are expected to grow by double digits this year and next, the dual strikes could threaten that economy, especially if the standoffs run deep into the fall season,” Insider Intelligence principal analyst Paul Verna, told Marketing Dive. 

But others are only mildly concerned about the impact of the writer’s strike on programmatic CTV. As Anthony Gonsalves, SVP of Publisher Development at Connatix explained, “As the Hollywood strikes rage on, scripted TV will undoubtedly suffer a setback in production and non-ad-supported subscription services will suffer. However, there are a couple of reasons why ad-supported CTV will not be impacted in the same way. The first is reality TV and unscripted shows are managed under a different SAG-AFTRA agreement and don’t fall under the same union as those on strike.” 

Gonsalves points to other factors in AVOD’s favor. For instance, Max has benefited from the 90-day franchise and MTV is bringing back fan favorites like Jersey Shore Family vacation.