While traditional TV viewership has been on the decline for years, TV ad spending finally caught up last year, falling for the first time since 2009 – a trend that will carry over for the next two years, according to new data from eMarketer.
TV ad spending dropped 1.5 percent in 2017 to $70.22 billion, and eMarketer forecasts it will continue to slip 0.5 percent this year to $69.87 billion and another 1 percent in 2019.
The firm expects TV ads to make up 31.6 percent of all U.S. ad spending, compared to nearly 34 percent in 2017, attributed in part to acceleration in cord-cutting and OTT video options.
The U.S. presidential election and the Tokyo Summer Olympics in 2020 will drive a slight uptick in TV ad spending that year, eMarketer found, but will slump again in the following years, dropping to less than 20 percent of total ad spend by 2022.
“The shift of audiences to OTT viewing is changing the climate of the TV ad market,” said Monica Peart, eMarketer senior forecasting director, in a statement. “As ratings for TV programming continue to decline, advertiser spending will also continue to see declines, especially in years that do not boast major events such as presidential elections and Olympic games.”
While traditional TV ad spending will experience a decline, total digital ad spending in the country will jump 18.7 percent in 2018 to $107.3 billion. eMarketer said OTT platforms continue to play an important role, with a small but going share of the market. The firm pointed to Roku’s U.S. ad revenues, which it said will surpass $293 million in 2018, up 93 percent over 2017.
“Over-the-top platforms are growing in number and size, and many compete directly with pay TV by offering bundles of live channels at attractive price points,” said Paul Verna, eMarketer principal analyst. “Consumers who want to cut or shave the cord now have a wealth of options that didn’t exist a couple of years ago. And we expect the offerings to become even more robust as more players enter the market.”
