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Rating Change Distribution—Percent of TV Shows2007-2008 vs. 2014 -2015, Broadcast Upfronts 1

1 - 2 point drop

Less than 0.5 point drop

0.5 - 1 point drop

Less than 0.5 point increase

0.5 - 1 point increase

18% 18% 29% 24% 11%

10% 22% 52% 14% 2%

As TV seasons turn, a consistent portion of shows’ linear audience members trickle away. In 2015, 74% of weekly broadcast shows saw their average rating drop by up to 1 point from the prior season. In 2008, that number was 47%.

Today, few shows see growth in their linear ratings - but few weather major declines, as well. The range of movement is narrowing, making the linear TV landscape more predictable. Advertisers can anticipate a small but steady portion of their TV audience to leave each year, forcing them to locate those viewers elsewhere. This paper uses commissioned Nielsen data and TubeMogul analysis to answer two crucial questions for marketers:

How much of the audience I bought last year will tune in next season, and where can I find those taking a break from the cable box?

TV Today Figure 1

1 Broadcast upfronts are programs on ABC, CBS, CW, FOX, and NBC that air once per week.

2007-2008

2014 -2015

Lose Small, Win Smaller3 out of 4 weekly broadcast shows lost up to 1% of their audience between seasons last year. Slow and steady drops in viewership are the new norm for linear TV.

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Recent drama programming on top networks has captured massive reach among African Americans. Though the widespread shift away from TV exists within the audience, tentpole TV buys remain an effective approach to reach a base of Black viewers.

Your AudienceTomorrow African Americans (18+) Millennials (18–34)Heavy TV Viewers (Top Quintile, 18+) Light TV Viewers (Bottom Quintile, 18+)Bilingual Hispanics (English-Spanish, 18+)

African Americans

Hit Shows Drive Reach

Average TV Ratings by GenreFigure 2

Figure 3

-15%

-17%

-6%-5%

-8%

3.0

2.5

2.0

1.5

1.0

0.5

0

Drama Comedy RealitySports News/Talk

TV ValueA selection of hit dramas on major networks reach incredibly high concentrations of African American viewers, making these programs sound investments for advertisers despite overall rating declines.

20072015

2007 2015• NFL Post Game,

CBS

• NFL Post Game, Fox

• Sunday Night

Football

• CSI Miami

• House of Payne

• Empire

• The Have and

Have Nots

• Scandal

• How to Get Away

with Murder

• Rosewood

Top 5 Programs by Rating

20142015

Combined ratings for the top 5 programs were 90% higher in

2015 than in 2007.

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While the shift away from traditional TV is nearly uniform across Millennials, disparate digital habits within the generation complicate media planning. For example, 25-34 year olds spend 65% more time with computers than their younger counterparts - and that's just a device-level distinction. The combination of devices, platforms, and content at Millennials' disposal means marketers must navigate a multitude of paths to find the right ad opportunity.

Millennials are accustomed to choice and convenience in their media consumption, and there's no indication that will change as they get older. Using software to plan and deliver advertising across channels is the key to young viewers today, but may be the answer to all audiences tomorrow.

Millennials

Fragmentation and Choice

Average TV Ratings by Genre

Figure 6

Figure 4

Figure 5

16:1818-24

25-34 23:26

6:12 6:33 16:05

5:56 10:50 14:18

Traditional TV Connected TV Computer Smartphone

M i l lennials' Weekly Time Spent by Device and Age (Hrs:Mins)

Phone

25-34

97%

18-24

96%

Tablet

70%

86%

Facebook

79%

Snapchat

39%

Instagram

57%

53%

59%

58%

Millennials Reached by Select Digital Devices & Channels

Millennials are highly reachable

through digital advertising, but marketers must be prepared for a wide array of

device, channel, and content

combinations.

RealityDrama Comedy Sports News/ Talk

3.0

2.5

2.0

1.5

1.0

0.5

0

-24%-19%

-7%-16% -14%

-18%

-22%

-12%+3% -12%

Cross-Screen FutureThere is no shortage of paths to millennials, but marketers must contend with fragmentation and an ever-changing media landscape. Not consolidated on specifc devices or channels, younger generations demand a dynamic, cross-screen strategy.

WOMEN MEN

2014

2015

2014

2015

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Digital NecessityTV's lightest viewers are scattered across programs in low concentrations and tune in for just a few minutes at a time. As this audience continues to move away from TV, marketers should shift to digital channels to achieve higher, more efficient on-target reach.

Light TV Viewers

More of the Most

PTV Opportunity Heavy TV viewers are highly reachable across a variety of programs. Consolidated, programmatic buying can find and execute the most efficient TV spots to reach this audience while controlling frequency.

Average TV Ratings by GenreFigure 9

Less of the Least

Viewers in the bottom TV quintile are increasingly difficult to reach through linear TV, with ratings down 57% since 2007. While programmatic tools can help advertisers locate pockets of this audience on TV, the reality is that light TV viewers should closely resemble non-TV viewers in the eyes of advertisers.

Digital channels, particularly mobile and social, can offer marketers higher reach among light TV viewers than linear TV. As linear viewing continues to consolidate in the top 20% of viewers, we may see a shift to digital baseplans across audiences.

Ratings among the top TV quintile are even higher now than they were in the mid-2000s, indicating that this dedicated group of viewers watches a greater variety of shows than it used to. Since high concentrations of the audience exist across programs and dayparts, marketers should pursue competitive pricing. However, marketers must also guard against frequency, as heavy TV viewers run a high risk of over-exposure.

Programmatic TV uses software to swiftly weigh cost and reach at scale, allowing advertisers to secure the most efficient TV buys available.

Figure 10Figure 8

Heavy TV Viewers

Average TV Ratings by GenreFigure 7

2007

2015

1.2

1.5

Average Program RatingAverage Program Rating

2007

2015 0.08

1.5

0.2

Drama Comedy Reality Sports News/Talk Drama Comedy RealitySports News/Talk

-57%

+26%

-37%-34%

-25% -33% -9%

-5%

+2%0%

-1%

3.0

2.5

2.0

1.5

1.0

0.5

0

3.0

2.5

2.0

1.5

1.0

0.5

0

20142015

20142015

-12%

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Mobile Value TV ratings among bilingual Hispanics are modest compared to the average viewer. However, smartphone usage is strikingly high among U.S. Hispanics, including bilinguals, offering marketers the opportunity to reach high concentrations of this audience through mobile sites and apps.

Bilingual Hispanics

Average TV Program Rating by GenreFigure 11 Conclusion

Every year traditional TV plans are losing reach. Last year, the average show dropped roughly 15% of its millennial audience members between seasons.

Exactly how habits are changing and where viewers will show up tomorrow is different for every audience. It's up to marketers to track their target audience's behavior and plan ahead.

Software and programmatic tools can help advertisers see across devices, channels, and content to monitor changes, understand shifting habits, and locate audiences wherever they go.

Drama Comedy Reality SportsNews/Talk

Video on the Go

U.S. Hispanics spend 24% more time on phone apps and web per week than the average American, and 87% more time watching digital video on their phones.² Mobile video presents a particularly significant opportunity to reach bilingual and Spanish dominant Hispanics, who spend more time watching digitial video than their English dominant counterparts.

Figure 12

Weekly Hours Spent Watching Digital Video

2 Nielsen, "Total Audience Report: Q1 2016"

BILINGUAL

SPANISH DOMINANT

ENGLISH DOMINANT

U.S. Content International Content

11.6 3.4

10.0 5.1

11.2 2.0

Whoever you're trying to reach, their habits are changing.

3.0

2.5

2.0

1.5

1.0

0.5

0

-15%

-19%

-14% -12% +2%

20142015

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Programming and ratings data, provided by Nielsen, comes from the fourth quarter of 2007, 2008, 2014, and 2015 and reflects original airings of all broadcast and cable programs. This report includes recurring programs and excludes specials. When measuring season to season rating changes, the analysis only considers programs that appeared in at least two consecutive seasons (2007-2008 or 2014-2015). The playback period for ratings in this report is live +7 days, and audiences reflect Nielsen demographics and market breaks. Broadcast upfront programs are defined as programs on ABC, CBS, CW, FOX, and NBC that air once per week.

Additional data sources include reports published by Nielsen, eMarketer, and Yahoo/Ipsos.

MethodologyGraphs

Figure 1The distribution of programs’ rating point change between 2007 and 2008 and between 2014 and 2015. Percentages indicate the share of programs falling into each group. Source: Nielsen

Figure 2Average ratings among African Americans 18+ for programs in select genres that aired in both 2014 and 2015. Source: Nielsen

Figure 3Difference in aggregated ratings among African Americans 18+ for the top 5 programs by rating in 2007 and 2015. Source: Nielsen

Figure 4Average ratings among women and men 18-34 for programs in select genres that aired in both 2014 and 2015. Source: Nielsen

Figure 5Source: Nielsen, "Total Audience Report: Q1 2016"

Figure 6Mobile Phone penetration by age, 2016 (% of population), Facebook penetration by age, 2016 (% of internet users); Snapchat penetration by age, 2016 (% of smartphone users); Tablet penetration by age, 2016 (% of population); Instagram penetration by age, 2016 (% of population).Source: eMarketer

Figure 7Average ratings among adults 18+ in the top TV quintile for programs in select genres that aired in both 2014 and 2015. Source: Nielsen

Figure 8Average 2007 and 2015 ratings among adults 18+ in the top TV quintile for consecutive programs across all genres. Source: Nielsen

Figure 9Average ratings among adults 18+ in the top bottom quintile for programs in select genres that aired in both 2014 and 2015. Source: Nielsen

Figure 10Average 2007 and 2015 ratings among adults 18+ in the bottom TV quintile for consecutive programs across all genres. Source: Nielsen

Figure 11Average ratings among English and Spanish speaking bilingual Hispanics 18+ for programs in select genres that aired in both 2014 and 2015. Source: Nielsen

Figure 12Source: Yahoo, "US Hispanic Online Video Consumption Study" conducted by Ipsos, June 2016

© 2016 TUBEMOGUL

TUBEMOGUL (NASDAQ: TUBE) IS AN ENTERPRISE SOFTWARE COMPANY FOR BRAND ADVERTISING. By reducing complexity, improving transparency and leveraging real-time data, our platform enables marketers to gain greater control of their global advertising spend. TubeMogul’s platform streamlines the cross-screen buying process and enables brand marketers to plan, buy and measure reach, frequency and impact in a transparent and effective way across television, video, display, mobile, social and other brand advertising initiatives. Our independent, buy-side focus means we only serve brands and agencies and remain aligned with the incentives of our clients. TubeMogul was incorporated in 2007 and is based in Emeryville, California with offices in New York, London, Sydney, Singapore, Toronto, Tokyo and across the United States.