TV Ad Spend to fall under $65bn in 2019, says Global Report
For the first time since 2015, GroupM, the world’s leading media investment company, has said that television ad spend will total less than $65bn by year’s end.
According to the report, the fall to $64.3bn in TV spend for 2019, minus political ads, should not be blamed entirely on the rise in cord-cutting, but instead is an indicator of sweeping developments changing TV advertising.
“The core set of advertisers that have historically driven TV spending are likely to reduce the budgets they allocate to the medium,” the report said.
GroupM explained that growing digital brands were more likely to advertise in their local environments, while the slowing established brands facing disruption were more likely to evaluate their ad budgets.
“If an app developer who makes games is advertising, they’re more likely to spend in digital. At some point that app developer will spend money on TV, but their whole business model is oriented differently.”
The media investment company responsible for one in three ads, added that digital ad spend would top $112bn. That is expected to reach $126.5bn by 2020, accounting for half of the total advertising market.
GroupM also pointed out that the rise in ad-supported streaming services would partially offset the decline of spends in traditional TV for their enhanced targeting capabilities in the short-term.
According to the report, streaming services are expected to be large spenders as they jockey for consumer attention in a crowded field.
“We expect the new and existing streaming video services to account for multiple billions of dollars in domestic advertising spending by the time these services are all operating at scale,” the report noted.
GroupM extended its forecast to 2024, projecting total US spend of nearly $285bn, excluding political ads. TV spend is expected to total $60.3bn, or 21% of the total advertising market.
Overall, total US ad spend is expected to grow 6.2% to $244bn in 2019. GroupM is forecasting 4% growth in 2020.