A month in, the Hollywood writers’ strike spells ad spend rejiggering

There’s still no deal between Hollywood writers and the major studios. Advertisers aren’t that worried—for now.

As the writers’ strike stretches into its second month with no agreement between the Writers Guild of America and the Alliance of Motion Picture and Television Producers, most advertisers do not see the strike considerably affecting their spending decisions, according to survey data from 20 streaming and CTV advertisers by the firm Advertiser Perceptions:

• Most of the advertisers polled, both agencies and marketers, said they felt there was enough content between sports, unscripted, and existing video-on-demand programming to get by for now.
• Advertisers that had dedicated budgets to affected programming said they planned to move dollars elsewhere within the same media companies’ portfolios.
• 17 of the 20 advertisers polled said they were unlikely to hold back future spending on TV or streaming because of the strike.

“It was very much a wait-and-see for the majority of those [advertisers] that we spoke to,” Erin Firneno, Advertiser Perceptions’s VP of business intelligence, said. In other words, “We’re going to stick with our plan, stick with our publishers, keep our eye on this, and pivot if we need to.”

All tentative: Depending on how long the strike lasts, advertisers may begin to rethink their spending and contingency plans, especially if ratings and audiences fall, Firneno said. That could stand to affect streamers that have smaller libraries and tend to see more considerable audience drop-off as new programming dries up, Kelly Metz, managing director, advanced TV activation at Omnicom Media Group, said.

“If you’re totally dependent on new content being delivered—of which there are quite a few streamers that are—and that drives the bulk of your viewership, we would expect to see more subscriber churn, we expect to see flat—if not declines—in total viewership,” Metz told Marketing Brew.

On the line: In the first quarter of 2023, advertisers spent a combined $633 million on TV talk shows, TV soap operas, and streaming platforms, three categories most vulnerable to the writers’ strike, according to data from MediaRadar. Ad spend on streaming platforms in particular declined 28% year over year to $352 million in the first quarter of 2023, according to MediaRadar.

• While some streaming executives, like Netflix co-CEO Ted Sarandos, have said they remain somewhat insulated from the strike since they film far in advance and produce internationally, some of streaming’s most high-profile and in-demand series, including HBO’s The Last of Us, Apple TV+’s Severance, Disney+’s Andor, and Netflix’s Stranger Things, are on indefinite pause.

The reality of it: Some programmers are turning toward unscripted content, an echo of the reality-TV-heavy programming strategy that became commonplace during the last writers’ strike in 2007. While that may help fill out schedules for the fall, it may not help deliver the engaged audiences that programmers and advertisers are courting, according to data from Morning Consult: Only a quarter of US adults said they prefer to watch reality TV with undivided attention, compared to half who preferred  watching scripted dramas that way.

Strike two? Other Hollywood unions are considering the possibility of a strike, which would put further pressure on studios and streamers to reach agreements. While the Directors Guild of America reached an agreement on a new contract, members of SAG-AFTRA—the union that represents around 160,000 actors and performers—voted overwhelmingly to authorize a strike in the event that it is unable to reach new agreements before current contracts expire at the end of the month.