May 2024 | Biannual

The Rise of the Premium Internet

THE RISE OF THE PREMIUM INTERNET

The open internet is at a tipping point. In 2022,
Facebook and Google accounted for less than halfof all digital advertising spending for the first timein a decade, a trend that accelerated in 2023. That
comes as consumers now spend the majority of
their time outside these Big Tech walled gardens —increasingly preferring the best of the open internet.
This includes the latest Hollywood movies andpopular TV shows, streaming audio, live sports,
and trusted journalism. Indeed, since 2019, daily
consumption of connected TV (CTV) and digitalaudio content has doubled in the United States. Not
only does this premium internet content command
the majority of consumer attention, it is also highly
engaging content, which is very attractive foradvertisers.
At the same time, as these consumer shifts are
occurring, advertisers are becoming increasingly
wary of the limitations and practices of Big Techwalled-garden platforms. Whether it’s the U.S.
Department of Justice lawsuit against Google,
questions about ad viewability, concerns aroundthe brand safety of user-generated content or thegrowing war on journalism by walled gardens —marketers are looking for an alternative.
With this in mind, advertising pioneers are alreadycharting the internet of tomorrow: One wherea new identity fabric and user authentication
enhance consumer privacy while preserving thevalue of relevant advertising; where new tools
help advertisers reach their target audience withconfidence across current and fast-emerging
channels; and where the consumer advertisingexperience is more pleasant and relevant.

THE RISE OF THE PREMIUM INTERNET

But perhaps most important, for the open internet
to thrive, it has to do something that walled gardens
have perfected over the years: Provide easy accessto content at scale (albeit often low-quality content
in the case of walled gardens).
This report examines why and how advertisers
are gravitating to the best of the open internet— the premium internet. It highlights the impact
of exciting new channels such as CTV and digitalaudio, and how a new open internet identity fabricis revaluing the internet right now.
Even though consumers spend the bulk of their timeon the open internet, walled gardens, collectively,
still account for the bulk of digital advertising
spending. But campaign dollars are starting tofollow consumer trends, and as more of thosedollars shift to the open internet, we hope that thisreport will serve as a valuable biannual checkpoint
on where the industry is heading.

Jeff Green, Founder and CEO, The Trade Desk

The Sellers and Publishers Report is a biannual
report examining the growth drivers of the open
internet. The report uses data from aggregate
digital advertising activity on the open internet,
as recorded by The Trade Desk, which sees as
many as 15 million digital advertising impression
opportunities (or queries) per second. As such, thisdata is a proxy for the open internet.

top news and editorial properties, leading audio andpodcast platforms, and some of the most popular
entertainment, lifestyle, and sports destinations.

This data includes advertising transactions across
500 leading digital sellers (platforms that often
aggregate many digital destinations) and publishers(specific destinations), as well as thousands ofadditional premium destinations valued by top
brands.

Many of these publishers are part of larger global
media companies (sellers). For example, Disneyboasts 8 of the leading 100 open internet advertising
destinations, including ABC, ESPN, Disney+, Hulu,
Hotstar, and National Geographic, among others.
Other leading sellers include NBCUniversal, Warner
Bros. Discovery, and Paramount Global.

The top 500 sellers and publishers ofdigital advertising impressions account for
approximately 50% of advertising spend on the
open internet. Among these leading 500 sellers
and publishers are popular streaming TV services,

THE RISE OF THE PREMIUM INTERNETAll publishers are assessed according to a range of
criteria including reach, decisioned programmatic
inventory, supply path efficiency and advertisingquality.

The Best of the Open Internet includes the most popular and engaging digital publishers across all digital channels(including web, connected TV, digital audio, etc). This ranking assesses each destination on the open internet according to arange of criteria, including advertising quality (such as viewability, ads to content ratio and refresh rate), reach, decisioned
programmatic inventory, supply path efficiency, and distribution quality — and then showcases the top 100, the very best of
the open internet. This assessment was conducted in partnership with Sincera, a leading digital advertising data company.
RANK

RANK

RANK

1

Hulu

35

The Roku Channel

69

Newsweek2Disney+

36

7plus

70

Sky

3

Max

37

Bravo

71

Investor’s Business Daily

4

ESPN

38

Telemundo

72

CBC

5

Spotify39

CBS News

73

Fox Sports

6

Peacock TV

40

Bloomberg

74

News AU

7

CNN

41

AMC

75

Los Angeles Times

8

National Geographic

42

The History Channel

76

Sydney Morning Herald

9

NBC

43

FX

77

theScore

10

Fox

44

iHeartRadio

78

Network 10

11

TF1

45

The Guardian79

Fox News

12

ABC

46

6play

80

SBS

13

HGTV

47

Binge

81

Reuters

14

Paramount+

48

Pluto

82

Variety

15

Discovery+

49

CarGurus

83

TSN

16

Univision

50

Vevo

84

Vulture

17

BBC

51

The New York Times

85

The Boston Globe

18

TBS

52

Sling TV86

New York Magazine

19

CBS

53

The Athletic

87

Yahoo! Sports

20

NBC News

54

NPR

88

Bild

21

Channel 4

55

DAZN

89

NBC Sports

22

TVer

56

The Washington Post

90

Vogue

23

Tubi

57

USA Today

91

Vox

24

Abema TV

58

Foxtel92

The Atlantic

25

Canal+

59

The Economist

93

The Globe and Mail

26

RTL+

60

USA Network

94

The Times

27

The Australian

61

The Wall Street Journal

95

The Verge

28

Hotstar62

FuboTV96

Fox Business

29

Samsung TV Plus

63

LG Channels

97

The Independent

30

Sportsnet

64

SonyLIV

98

Chicago Tribune

31

France Télévisions

65

iQIYI

99

The Telegraph

32

ABC News

66

9Now

100

Le Figaro

33

BET

67

Mitele34

Pandora68

RaiPlay

THE RISE OF THE PREMIUM INTERNET*Flags indicate primary or home market. Many of thesepublishers and sellers operate in multiple countries.

CONSUMERS FLOCK
TO THE PREMIUM,
OPEN INTERNETPREMIUM
DESTINATIONSGRAB CONSUMERATTENTION

BIG TECH’S
SHARE OF DIGITALAD SPEND ISDECLINING

ADVERTISERSVALUE THE
BEST OF THE
OPEN INTERNETQUESTIONS LOOMFOR WALLEDGARDENSSTREAMING TV
DRIVES OPEN
INTERNET GROWTH

THE RISE OF THE PREMIUM INTERNET

According to research from GlobalWebIndex,
consumers in the U.S. spend 61% of their online
time on the open internet, versus 39% of time spent
within walled gardens.
This represents a significant swing in recent years.
As recently as 2014, consumers spent 62% of their
online time within walled gardens.
This shift has come as hours spent on the open
internet have increased significantly, from less than
2 hours per day, on average, in 2014, to more than 5hours per day in 2023.
The emergence of key digital channels, such as
streaming TV and digital audio, has played a majorrole in this consumer shift to the best of the open
internet.

TIME SPENT (% SHARE) WITH THE OPEN INTERNET
VS. WALLED GARDENS

62%

49%

51%

43%

39%

57%

61%

2020

2023

38%

2014

2017

Open internet

Walled gardens

Source: GlobalWebIndex (GWI Core): FY 2014, 2017, 2020 and 2023.
Market: USA; Adults 18+ Avg Daily Time Spent by Media.

THE RISE OF THE PREMIUM INTERNET

Consumers are flocking to the open internet because of the premium nature of professionally produced
content. According to eMarketer and GlobalWebIndex, for example, adults in the U.S. almost doubled their
daily consumption of streaming music and podcasts from 2019 to 2023, from 97 minutes to 181 minutes.
Similarly, average daily CTV viewership in the U.S. doubled from 58 to 115 minutes over the same period,
according to GlobalWebIndex and Nielsen.
Social media growth, by comparison, slowed considerably during this time frame, with average daily usage
growing less than 10%, from 124 minutes to 136 minutes per day across all social media channels in the U.S.,
according to GlobalWebIndex.

GROWTH IN SELECT PREMIUM INTERNET CHANNELS (MINUTES SPENT, PER DAY, ON AVERAGE, U.S., 2019–2023)
210
180
150
120
90
60
2019

30

2023

0
Streaming music and podcasts
Sources: GlobalWebIndex, Nielsen, eMarketer.

THE RISE OF THE PREMIUM INTERNET

Connected TV

Research from Insider Intelligence highlights comparatively declining demand for advertising opportunities
within walled gardens. Indeed, 2022 was the first year in a decade when Google and Facebook did not accountfor more than half of all digital advertising spend. This trend continued into 2023, with these two walled-garden
giants now accounting for 46.6% of digital advertising spend, down from over 53% in 2019.

META (FACEBOOK) + ALPHABET (GOOGLE) SHARE OF DIGITAL AD SPENDING

Source: Insider Intelligence.

THE RISE OF THE PREMIUM INTERNET

This shift comes as more advertisers
prioritize the very best of the premium
internet. Whether it’s the best in live sports
featuring the world’s top leagues andtournaments, the best scripted TV showsand movies, or trusted journalism, themost premium digital content is now on
the open internet.

ADVERTISING DEMAND FOR THE TOP 500 OPEN INTERNETDESTINATIONS IS 2.1X HIGHER WHEN COMPARED TO THE
REST OF OPEN INTERNET (2019–2023)

50%

49%

45%

Since 2019, demand for advertising
impressions on the top 500 digital
destinations has grown faster (49% averageannual growth rate) than the rest of theopen internet (25%).

40%
35%
30%

And advertisers are willing to pay more
for those top-tier impressions. During
the second half of 2023, for example,
marketers paid 78% more for CTV
ad impressions within the top 500
destinations than those outside. Similarly,
for display ad impressions, they werewilling to pay 11% more.
These trends indicate that advertisers are
placing greater emphasis on key impression
characteristics, such as premium content,
brand quality, stability, viewability
and supply path integrity. For example,
display ad impressions within the top 500
destinations were 18% more viewable thanthose outside the top 500.

THE RISE OF THE PREMIUM INTERNET

25%

25%
20%
15%
10%
5%
0%
TOP 500 OPEN
INTERNET PUBLISHERS
Source: The Trade Desk.

REST OF THE
OPEN INTERNET

Growing advertiser preference for the very
best of the open internet comes as marketers
become more aware of the opaque practices ofwalled gardens.
Most notably, in its landmark lawsuit against
Google, the U.S. Department of Justice (DOJ),
alleged that Google has been “driving out rivals,
diminishing competition, inflating advertisingcosts, reducing revenues for news publishers andcontent creators, snuffing out innovation, andharming the exchange of information and ideas
in the public sphere.”At the same time, Google has been put underthe microscope in terms of the viewabilityof its ad placements, as well as its impact on
publishing and journalism.
Indeed, both Google and Facebook haverecently announced moves that may
significantly curtail the ability of journalistic
outlets to monetize news content, even as
advertisers are looking for ways to support aflourishing Fourth Estate.

THE RISE OF THE PREMIUM INTERNET

The omnichannel growth of the open internet
in recent years has been underpinned by
the surge in CTV viewership and related
advertising opportunities. And it’s no surprisethen that CTV dominates the list of the leading
destinations on the open internet.

Furthermore, according to recent researchfrom The Trade Desk Intelligence, 75% of 25- to
44-year-olds have increased CTV consumption
over the last year. This demographic is highly
coveted by advertisers, in part, because of its
rapidly expanding purchasing power.
These shifts are occurring as more media
companies make the highest value TV content
available via streaming platforms, including live
sports. This year, viewers are able to watch NBA,
NFL, NHL, MLB, Premier League Soccer andalmost all other major sporting events via CTV.
And for the first time in 2024, the Olympic
Games will be available programmatically toadvertisers.
THE RISE OF THE PREMIUM INTERNET

45
40
35
30

In USD Billions

In 2022, for the first time, viewers in the U.S.
spent more time on streaming TV platforms
than traditional cable TV — a trend that has
only accelerated since then. And advertisers
are following the eyeballs. According to Insider
Intelligence, “Connected TV (CTV) is the fastestgrowing major ad format in the U.S., drawing
strength from the migration of programming,
viewers, and time spent todigital channels.”

U.S. CTV AD SPEND

25
20
15
10
5
0
2021

2022

2023

2024

2025

2026

Source: Insider Intelligence.

“CTV is changing everything in advertising. Not onlyis the shift from linear to CTV driving significant
growth in digital spend as advertisers shift dollars
from linear TV to connected TV, but more spend ishappening outside the walled gardens as advertisers
shift spend from user-generated content to premium
streaming content.”– Jeff Green, February 15, 2023

2027

DIGITAL AUDIOIS SET FOR
TAKEOFF

CTV WILL
CHALLENGE
YOUTUBE AD
DOMINANCETHE OPENINTERNET WILL
BE REPLUMBED

AD-SUPPORTEDSTREAMING WILLFLOURISHKEY GLOBAL CTVMARKETS WILLOUTPACE THE U.S.

CTV WILLHELP SAVEJOURNALISM

THE RISE OF THE PREMIUM INTERNET

According to Jeff Green, CEO of The Trade Desk, “Digital audio advertising is a relative value compared to otherchannels given its level of addressability and efficacy, and many of our advertisers are already leaning in.”
Digital audio has been one of the fastest-growing channels on the open internet in recent years. Streaming music
and podcasts now account for an average of almost 3 hours of consumer time per day in the United States,
according to Global World Index. Spotify, for example, now boasts 602 million users, 379 million of whom haveselected an ad-supported option. Furthermore, Spotify’s ad-supported subscriber base is growing faster (28%year-over-year in Q4 2023) than overall subscribers (23%).
Social media, by contrast, accounts for just over 2 hours of consumer time per day, on average.
From an advertising spend perspective, however, social media dwarfs digital audio, commanding $65 billion incampaign spend in 2023 in the United States, compared to $7 billion for digital audio.
This imbalance will start to reverse in the years ahead as more advertisers target highly engaged digital audio
consumers.

TOTAL U.S. AD SPEND ON DIGITAL AUDIO AND
SOCIAL MEDIA (2023)

375

In USD Billions

HOURS SPENT, PER DAY, BY U.S. CONSUMERS
ON DIGITAL AUDIO AND SOCIAL MEDIA (2023)

2

1

0

50

25

0
Digital Audio

Social Media

Source: GlobalWebIndex.

THE RISE OF THE PREMIUM INTERNET

Digital Audio

Social Media

According to Nielsen, in January 2024,
YouTube accounted for around one-quarter ofall digital/streaming video consumption in the
U.S. Premium CTV platforms such as Netflix,
Hulu, Disney+ and Peacock accounted for morethan three-quarters of consumer time spent.

DIGITAL TV/VIDEO VIEWING TIME SPENT (% SHARE,JANUARY 2024)
80
60

By contrast, YouTube accounts for the vastbulk of digital video advertising spend.
YouTube global ad revenue for 2023 totaled
more than $31b, for example, while all major
streaming platforms, collectively, accounted forapproximately $20b, according to estimates.

40
20
0

As advertisers increasingly question the brandsafety of YouTube advertising, they are likely
to shift spend to the professional, premium
content of open internet CTV.

YouTubePremium CTV

Source: Pixilate.

2023 GLOBAL ADVERTISING REVENUEIn USD Billions

40
30
20
10
0
YouTubeSource: Statista.

THE RISE OF THE PREMIUM INTERNET

Premium CTV

The emerging identity and authentication
fabric of the open internet will move spend
from user generated content to premium,professionally produced content. That’s because
new approaches to identity and authentication— rapidly being embraced by many of theinternet’s premium publishers — can give
advertisers more certainty that they are reaching
their target audience against the right content at
the right time.

INCREASE IN BIDDABLE ADVERTISING
IMPRESSION VALUE WHERE UID2 IS PRESENTJANUARY 1 – DECEMBER 31, 2023

17%
Video

Indeed, advertisers are willing to pay
meaningfully more when they have confidence
that their ads are reaching the right audience.
Open and biddable digital audio ad impressions
that include Unified ID 2.0 (UID2) are valued
28% higher by advertisers than those without
UID2. Similar trends play out across all digitaladvertising channels.

28%
Audio

And advertisers are embracing newopportunities to engage with authenticatedaudiences.
Unilever recently reported that a CTV campaign
running on Disney with UID2 was 12 times more
effective at reaching its target audience thanwith traditional targeting.

THE RISE OF THE PREMIUM INTERNET

22%
DisplayAs The Hollywood Reporter recently posted,“Executives at every streaming giant with bothan ad-supported and an ad-free tier (including
Disney, Netflix, Paramount, Warner Bros.
Discovery and NBCUniversal) say that total
revenue per user is higher on the ad-supported
plan than it is on the ad-free plan.”With more incentives for viewers to selectad-supported streaming options, eMarketer
expects “Ad-supported streaming to gain triple
the viewers of subscription video this year.”

SUBSCRIPTION STREAMING VS. AD-SUPPORTEDSTREAMING, ANNUAL VIEWER GAINS
Subscription Streaming

Ad-Supported Streaming

14
12
10
In USD Millions

As consumers have shifted en masse to CTV,and as more media giants have launchedstreaming services, there has been industrywide realization that the only way to fund thisnew golden age of TV is via advertising.

8
6
4
2
0
2022

Source: eMarketer.

THE RISE OF THE PREMIUM INTERNET

2023

It’s no surprise that major CTV platforms in markets such as the U.S., U.K., Canada and Australia feature
heavily among the top publishers on the open internet.
In these markets, consumers are making the shift to streaming TV and the conditions for programmatic
advertising support of streaming TV are more advanced. In Australia, for example, more consumers are now
watching streaming TV than traditional free-to-air broadcast TV. Streaming demand is expected to accelerateinternationally over the next few years. Indeed, 2024 is expected to be the first year where the U.S. does notaccount for more than 50% of global streaming revenue.

“CTV can savejournalism. Period. I
may go so far to say... it
may be the only hope.”– Jeff Green, Feb 27, 2024

According to a recent report by Northwestern University, since 2005, approximately one third of newspapers in
the U.S. have closed, and approximately two-thirds of newspaper reporter jobs have been lost.
At the same time, according to a recent MAGNA study, consumers reported that ads in news content were 8%
more relevant, 6% more valuable and 4% more trustworthy when compared to non-news programming. In orderto capture this opportunity, and fund a vital, thriving and trusted journalism industry, news media destinations
will increasingly borrow from the CTV playbook.
With cookies deprecating, news media destinations will build new approaches to authentication, following thesame strategy as today’s CTV pioneers. They will leverage simple, lightweight single-sign-on technologies so they
can offer advertisers more valuable insights on how to reach target audience on their sites.

THE RISE OF THE PREMIUM INTERNET