How Do the SAG-AFTRA and WGA Strike Affect Advertisers?

Audience loss and uncertainty could mean media buyers put their ad dollars elsewhere.

If you've been following the news recently (or scrolling through TikTok), you know the dual SAG-AFTRA / WGA strike is still going strong two months in, effectively shutting down American movie and TV productions.

While it's unwelcome news for fans (will we ever get the next season of Stranger Things or Abbott Elementary?), the disputes over the lack of residuals from streaming services and the impact of AI on the industry raise questions that need answering.

And the lack of new content poses a serious challenge to advertisers and the networks/platforms that rely heavily on ad revenue.

Sure, streaming services may see a short-term boost in ad spend. Reruns and on-demand entertainment will become crucial to retaining audiences, but the longer the strike lasts, the sooner users will tire of rewatching their favorite shows.

Without new content, users may start to question the need for all those subscriptions.

(Our mention of Stranger Things was an attempt to bring levity to a serious challenge for the ad world.) But if a family, who is already struggling with inflation at the grocery store, doesn't see their favorite show dropping on Netflix, they might see the platform as an unnecessary expense.

And if enough users opt out of their subscription services, the ad-supported networks (and their advertisers) will bear the brunt of lost revenue and market share.

In an ideal scenario, both sides of the strike will reach an agreement soon. But with talks progressing slowly, it's looking like advertisers will need to develop creative ways to keep their campaigns on budget - and their audiences engaged. The good news is we see plenty of opportunities for brands to double down on influencer marketing and user-generated content to deliver value. Another bright spot in the market is certainly live sports, and we expect to see both viewership and costs rise in sports content.

It's not all doom and gloom for advertisers.

The dearth of content could mean savings for ad placements if the strikes last beyond Labor Day. With most companies looking to place buys for 2024 in October, platforms and networks may begin to shave prices to entice brands to spend.

Ultimately, it will come down to creative solutions - both from advertisers looking for a way to get their message out and those working tirelessly to reach an agreement between studios and workers. Stay tuned with us as we watch how it plays out!

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